PAYE Calculator

How the PAYE Calculator Works

Pay-As-You-Earn (PAYE) is the system SARS uses to collect income tax from employees at source. Your employer deducts PAYE from your gross salary each month and pays it directly to SARS on your behalf. At the end of the tax year you file a return (IRP5) to reconcile - if too much was deducted you receive a refund; if too little, you pay the shortfall.

The calculator annualises your monthly salary (× 12), applies the SARS 2025/26 progressive tax brackets, then subtracts the applicable primary rebate (R17 235/year for taxpayers under 65). If you have medical aid dependants, the monthly tax credits (R364 for the principal member, R246 per dependant) are deducted directly from tax owed - not from taxable income. A retirement annuity deduction of up to 27.5% of taxable income (capped at R350 000/year) reduces the income on which tax is calculated before any rebates are applied.

UIF (Unemployment Insurance Fund) is calculated separately at 1% of your gross salary, capped at a monthly ceiling of R177.12 (based on the UIF income ceiling of R17 712/month). This is not a tax but a social insurance contribution and does not reduce your taxable income.

The result is your estimated monthly net pay. Because PAYE is calculated on annualised income, month-to-month variations (a 13th cheque, a bonus, or a mid-year salary increase) can change the effective rate. This calculator assumes a consistent salary throughout the year.

How to Use This Calculator

1. 1

   Enter your gross monthly salary

   Use your total cost-to-company (CTC) salary before any deductions. If you are paid a basic salary plus allowances (car, travel, housing), include all taxable components. Non-taxable allowances and fringe benefits are excluded.

2. 2

   Add your retirement annuity contribution

   If you contribute to a retirement annuity (RA) or pension fund outside of your employer's scheme, enter the monthly amount. SARS allows a deduction of up to 27.5% of taxable income, capped at R350 000/year. This directly reduces the income on which PAYE is calculated.

3. 3

   Enter your medical aid dependants

   Select the number of people on your medical aid, including yourself. SARS provides a monthly tax credit of R364 for the principal member and R246 for each additional dependant. These credits reduce your PAYE directly - they are not income deductions.

4. 4

   Select your age

   Taxpayers aged 65–74 qualify for an additional secondary rebate (R9 444/year) and those 75+ receive a tertiary rebate (R3 145/year) on top of the primary rebate. These increase the effective tax-free threshold.

5. 5

   Read your net pay breakdown

   The results show PAYE, UIF, total deductions, and net take-home pay. Use the effective tax rate (net tax ÷ gross salary) to compare against colleagues or when evaluating a salary offer.

Frequently Asked Questions

What is the tax-free threshold in South Africa for 2025/26?

The primary rebate for 2025/26 is R17 235, which translates to an effective tax-free threshold of R95 750/year (R7 979/month) for taxpayers under 65. Earners below this amount pay no income tax. For taxpayers aged 65–74, the threshold is R148 217/year, and for those 75 and older it is R165 689/year.

What is the difference between PAYE and income tax in South Africa?

PAYE (Pay-As-You-Earn) is the mechanism by which income tax is collected - your employer withholds it monthly on SARS's behalf. Income tax is the underlying liability. At year-end you file a return: if your PAYE payments matched your actual tax liability exactly, there is nothing more to do. If you earned other income (rental, freelance, interest) or have additional deductions, your return may produce a refund or an amount owing.

How does a retirement annuity reduce my PAYE?

Contributions to an approved retirement annuity fund are deductible from taxable income up to 27.5% of the greater of remuneration or taxable income, capped at R350 000/year. The deduction reduces the income on which PAYE is calculated, so every rand contributed saves you tax at your marginal rate. At a 31% marginal rate, a R2 000/month RA contribution saves approximately R620/month in PAYE.

Are medical aid contributions tax deductible in South Africa?

No - medical aid premiums are not deductible from taxable income. Instead, SARS provides fixed monthly tax credits: R364 for the main member, R246 for the first adult dependant, and R246 for each additional dependant (children included). These credits come directly off your tax bill, not your taxable income, making them equally valuable regardless of your tax bracket.

What happens to PAYE when I receive a bonus?

When your employer pays a bonus, they must calculate the PAYE on your total annual income including the bonus, then withhold the difference from the month in which the bonus is paid. This can result in a significantly higher deduction in that month. If you earn R30 000/month and receive a R60 000 bonus, your employer treats your annualised income as R420 000 (R360 000 + R60 000) and deducts the marginal tax on the bonus - pushing you into a higher bracket for that month.

Can I claim back PAYE overpaid during the year?

Yes. If your employer withheld more PAYE than your actual annual tax liability - for example, because you had deductible RA contributions not captured on your payslip, or because your employment started mid-year - you can claim a refund when you file your annual return on SARS eFiling. SARS processes refunds within 7 business days for verified taxpayers with valid banking details on record.