Belastingkoerse
A member of a retirement fund becomes entitled to a lump sum benefit when his or her membership of that retirement fund terminates. The taxable portion of the lump sum benefit is included in the taxpayer’s gross income and is subject to the rates of tax applicable to lump sum benefits.
A lump sum benefit is any amount payable by a retirement fund to a member or former member in consequence of his or her membership or past membership in that specific retirement fund. Types of lump sum benefits payable by a retirement fund are:
- withdrawal benefits;
A withdrawal benefit is an amount that becomes payable when a member elects to terminate his or her membership in that retirement fund before reaching retirement age, for any reason other than retirement, death or retrenchment.
- retirement benefits
A retirement benefit is an amount that becomes payable by a retirement fund to a member as a result of death, or when the member elects to retire from that retirement fund after he or she has reached retirement age or has been retrenched. The lump sum benefit payable depends on the type of retirement fund involved.
A “severance benefit”, is not a lump sum benefit as it is an amount payable by an employer to an employee and not an amount payable by a retirement fund to a member or former member of that retirement fund.
SARS use different tax rates when an employee has a Withdrawal of Retirement benefit. Please click on the applicable link to see the tax rate applicable to your scenario:
Click on the following link if you are looking for the normal tax rates.
Tax treatment of Withdrawal Benefit
| Taxable income (R) | Rate of tax (R) |
|---|---|
| 1 – 27 500 | 0% |
| 27 501 – 726 000 | 18% of taxable income above 27 500 |
| 726 001 – 1 089 000 | 125 730 + 27% of taxable income above 726 000 |
| 1 089 001 and above | 223 740 + 36% of taxable income above 1 089 000 |
Tax treatment of Retirement benefit
| Taxable income from lump sum benefits | Rates of tax |
| 1 – 550 000 | 0% of taxable income |
| 550 001 – 770 000 | 18% of taxable income above 550 000 |
| 770 001 – 1 155 000 | 39 600 + 27% of taxable income above 770 000 |
| 1 155 001 and above | 143 550 + 36% of taxable income above 1 155 000 |
Individual Tax Rates
2024 tax year (1 March 2023 – 28 February 2024)
| Taxable income (R) | Rates of tax (R) |
|---|---|
| 0 – 237 100 | 18% of each R1 |
| 237 101 – 370 500 | 42 678 + 26% of the amount above 237 100 |
| 370 501 – 512 800 | 77 362 + 31% of the amount above 370 500 |
| 512 801 – 673 000 | 121 475 + 36% of the amount above 512 800 |
| 673 001 – 857 900 | 179 147 + 39% of the amount above 673 000 |
| 857 901 – 1 817 000 | 251 258 + 41% of the amount above 857 900 |
| 1 817 001 and above | 644 489 + 45% of the amount above 1 817 000 |
Tax Rebates
| Tax Rebate | Tax Year | |
|---|---|---|
| 2022 / 2023 | 2023/ 2024 | |
| Primary | R16 425 | R17 235 |
| Secondary (65 and older) | R9 000 | R9 444 |
| Tertiary (75 and older) | R2 997 | R3 145 |
Tax Thresholds
| Age | Tax Year | |
|---|---|---|
| 2022 / 2023 | 2023 / 2024 | |
| Under 65 | R91 250 | R95 750 |
| 65 an older | R141 250 | R148 217 |
| 75 and older | R157 900 | R165 689 |