Many South Africans are surprised to find out they owe provisional tax — especially freelancers, contractors, and small business owners. But don’t worry — it’s not an extra tax. It’s simply a way to pay your income tax in advance.
Here’s what you need to know to stay compliant and avoid nasty surprises from SARS.
What Is Provisional Tax?
Provisional tax is a system where taxpayers who don’t earn a regular salary (with PAYE deducted) pay their income tax in two or three instalments during the year, rather than one lump sum at year-end.
It helps SARS collect revenue throughout the year — and helps you manage your cash flow.
Who Needs to Pay Provisional Tax?
- You’re likely a provisional taxpayer if you:
- Earn income from self-employment, freelancing, or consulting.
- Run a small business or have rental income.
- Receive income that’s not already taxed via PAYE.
- If your only income is from a salary (and PAYE is deducted), you’re not a provisional taxpayer.
When Are Payments Due?
There are usually two compulsory payments and one optional top-up:
- First payment: by end of August (mid-tax year)
- Second payment: by end of February (end of tax year)
- Third/top-up payment: by end of September (only if needed to avoid interest)
How to Calculate Provisional Tax
You’ll estimate your taxable income for the year, subtract allowable deductions (like business expenses, retirement contributions), and calculate the tax due based on SARS tables.
Your accountant can help ensure your estimate is realistic — underestimating can lead to penalties.
How to Pay your Provisional Tax
- Register for SARS eFiling or use the SARS MobiApp.
- Complete your IRP6 return.
- Pay directly via eFiling, EFT, or at an authorised bank.
What Happens If You Don’t Pay?
- Late or underpaid provisional tax attracts:
- Penalties (10% of the unpaid amount).
- Interest on the outstanding balance.
- Missing multiple deadlines can flag your tax account for review.
Final Thoughts: What is Provisional Tax
Provisional tax doesn’t have to be confusing — it’s just a way to stay on top of your tax obligations throughout the year.
At Schoemans Chartered Accountants, we help individuals and business owners across Cape Town calculate, file, and manage their provisional tax — accurately and on time.
Need help with your IRP6 return? Speak to our tax team today. Schoemans Charted Accountants in Cape Town are part of the Schoemans Group that included Schoemans & Coetzee Audit – Registered Auditors in Cape Town and Acredo Quality Auditing, Accounting and Tax Compliance