Here’s how much tax you will pay based on what you earn in South Africa

Finance Minister Enoch Godongwana has tabled his third budget for the year, keeping the screw tightened on income taxpayers, and warning of more tax measures coming in 2026.

The latest budget maintains the stealth taxes contained in the previous version, with National Treasury not adjusting the tax tables for income taxpayers.

This will result in inflationary bracket creep, where anyone earning a higher salary in real terms will pay more taxes.

However, while the previous budget expected to collect R18 billion in revenue from these measures, the new budget revision only sees Treasury gaining an additional R15.5 billion.

The same is seen with a similar stealth tax applied to medical aid tax credits.

By not adjusting these for inflation, Treasury saw an additional R1.5 billion being collected in March. This has now dropped to R1.3 billion.

A positive, though, is that medical aid tax credits haven’t been reduced, as was flagged as a possibility by some economists ahead of the budget.

Regardless, there is no relief for income taxpayers this year.

The first budget, which was ultimately not tabled in February, had intended to give taxpayers a partial reprieve by adjusting tax brackets for lower earners, while holding them at the top end.

This was to make up for the big increase in VAT, which would have gone up by two percentage points to 17%.

The second budget in March included a reduced VAT hike, which led to a big revenue shortfall. Treasury tried to narrow the gap by freezing tax brackets across the board.

This now remains the case.

The outcome should not be that surprising, given the loss of the VAT hike and the massive hole left in its wake.

According to Godongwana, the result of cutting out the VAT hike is that revenue projections had to be revised downward by R61.9 billion over three years.

This reflects the reversal of the VAT increase and the much weaker economic outlook.

Unfortunately, Godongwana made it clear that the minor tax measures being implemented to cover the shortfall are not enough and warned that the 2026 Budget will need to propose new tax measures, aimed at raising R20 billion.

In addition, the department will be supporting and equipping SARS to come after taxpayers harder to collect money that it is owed.

“We have allocated an additional R7.5 billion over the MTEF, to increase the effectiveness of the South African Revenue Service in collecting more revenue,” he said.

“Part of this allocation will be used to increase collections from debts owed to the fiscus. SARS has indicated that this could raise between R20 billion to R50 billion in additional revenue per year.”

2025 Tax Tables

The updated tax guide from SARS can be found here.