Important deadline approaching for South African taxpayers

As the 2026 provisional tax deadline approaches, South Africans earning income outside pay-as-you-earn (PAYE) must ensure accurate IRP6 submissions and payments to avoid SARS penalties, interest, and forced assessments.

Tax Consulting SA’s expatriate tax support specialist, Rendani Makatu, stressed that for taxpayers earning income outside traditional employment, provisional tax is a non-negotiable responsibility and getting it wrong can be costly.

“If you earn income other than a salary, whether through a business, rental income, freelance work, investments, or any trade, it is essential to understand your tax obligations as a provisional taxpayer,” Makatu said.

Importantly, these taxpayers must ensure that all IRP6 (provisional tax return) submissions and payments meet the South African Revenue Service’s (SARS) final deadline of 28 February 2026.

“Provisional tax applies to individuals who receive income that is not taxed through the traditional PAYE system,” he explained.

Since this income does not flow through an employer’s payroll, SARS requires affected taxpayers to submit two IRP6 returns.

They must also make payments throughout the year, rather than settling a large amount in one payment at the end of the tax year. SARS data shows more than 543,000 provisional taxpayers filed returns in 2024.

For the current tax year, the first IRP6 return and provisional payment were due on 30 August 2025, which would have amounted to half of the total estimated tax for the full year.

“The second submission and payment are due for settlement on 28 February 2026, which amounts to the total estimated tax for the full year, less the amount paid for the first provisional period,” Makatu said.

“This deadline should not be confused with the 19 January 2026 deadline, which applies to the submission of the final annual income tax return for reconciliation purposes.”

Exemptions

Makatu explained that not all individuals with additional income are automatically regarded as provisional taxpayers.

“Natural persons who do not carry on a business are exempt from provisional tax if all their taxable income, including traditional employment income, investment income, falls below the annual tax threshold,” he said.

The thresholds for the 2025 tax year are –

• Under 65 years – R95,750
• 65 years and older, but under 75 years – R148 ,217
• 75 years and older – R165 ,689

In its Comprehensive Guide to the Income Tax Return for Individuals, SARS clearly states that provisional tax is not a separate tax from income tax.

“It is a method of paying the income tax liability in advance, to ensure that the taxpayer does not have a large tax debt on assessment,” SARS explains.

In other words, Makatu said, provisional tax exists to help taxpayers manage their cash flow and avoid a sudden, unexpected tax bill at the end of the year. This system comes with responsibilities.

“If a provisional taxpayer fails to submit their final provisional tax return within four months after the end of the year of assessment, SARS will automatically treat this as an estimate of nil taxable income,” he said.

“Moreover, if the Commissioner believes the taxpayer’s estimate is unrealistic or understated, SARS has the authority to increase the estimate.”

If no estimate is made at all, including cases where the taxpayer fails to file their IRP6 returns, Makatu warned that the Commissioner may unilaterally determine the taxpayer’s taxable income based on available information.

“Continued non-compliance may escalate to collection actions, including final demands, third-party appointments, or legal proceedings,” he said.

The risks of non-compliance

Makatu emphasised that provisional taxpayers must be aware of the risks associated with miscalculations, omissions, or delays, which may result in penalties and interest.

“It is important to note that SARS does not tax each income source separately but calculates tax on your total combined taxable income in the year of assessment,” he said.

“All income is added together before applying the tax tables.” Below is an example of how the tax is calculated –

• Salary income: R1.7 million
• Freelance income: R120,000
• Rental profit: R80,000
• Total combined taxable income: R1.7 million + R120,000 + R80,000 = R1.9 million

Because the total exceeds R1.817 million, the taxpayer moves into the 45% tax bracket, Makatu explained. If the taxpayer earned only the salary of R1.7 million, they would remain in the 41% tax bracket for part of their income.

“Once the freelance and rental income are added, the combined income pushes them into a higher bracket,” he said.

This means the portion above R1.817 million is taxed at 45%, resulting in higher tax than if each income stream were taxed separately.

Makatu warned that missing provisional tax submission deadlines or failing to file the required IRP6 returns exposes taxpayers to substantial administrative penalties and interest.

Importantly, both the penalties and interest accrue from the due date until the outstanding amount is fully settled. “In many cases, the interest charged under section 89quat can exceed the original provisional tax liability,” he said.

Provisional tax is not merely a SARS requirement, Makatu warned, it is an essential element for anyone earning income outside traditional employment above the set SARS thresholds.

“There is a general increase in the number of provisional taxpayers and trusts filing returns,” SARS said early in 2025 when releasing preliminary figures on the 2024/25 Filing Season.

“This is encouraging. However, there is still a long way to go to ensure acceptable levels of compliance in these categories of taxpayers.”

The message is clear, Makatu said. By filing accurate estimates and submitting your returns on time, taxpayers stay compliant.

This will also allow them to avoid unnecessary charges, prevent unpleasant surprises, and maintain control over their cash flow.

Type of non-compliance	What SARS charges
Late payment of provisional tax	10% penalty on the unpaid amount
Interest on late payment	Interest at prescribed rate on outstanding amount
Under-estimation penalty (second period)	20% penalty on the shortfall
Late submission of IRP6 (administrative)	Administrative non-compliance penalties