Have you ever looked at your payslip and wondered why the amount paid into your bank account is lower than your salary? One of the main reasons may be Pay-As-You-Earn (PAYE), the income tax employers generally deduct from employees’ remuneration and pay to the South African Revenue Service (SARS).
Understanding PAYE can help you check your payslip, estimate your take-home pay and identify deductions you may need to question. The amount deducted depends on factors such as your taxable remuneration, the applicable tax rates, rebates and your personal circumstances.
For the 2026/2027 tax year, which runs from 1 March 2026 to 28 February 2027, SARS applies the current individual income tax tables and rebates. This guide explains how the system works, how to estimate your tax and why your final take-home pay may differ from your gross salary.
Quick Guide to PAYE in South Africa
| Question | Answer |
|---|---|
| What does PAYE mean? | Pay-As-You-Earn |
| Who generally deducts PAYE? | An employer paying taxable remuneration |
| Who receives the tax? | The South African Revenue Service (SARS) |
| Current tax year covered | 1 March 2026 to 28 February 2027 |
| What affects PAYE? | Taxable remuneration, tax brackets, rebates and relevant tax credits |
| Is PAYE the same as take-home pay? | No. PAYE is a tax deduction from remuneration |
| Where can you verify tax rates? | The official SARS website |
1. What Is PAYE?
PAYE stands for Pay-As-You-Earn. It is the system used to collect employees’ income tax through deductions made by employers from remuneration.
Instead of waiting until the end of the tax year to pay all the relevant tax, employees generally have tax deducted as they earn income. The employer pays the deducted amount to SARS and reports the required payroll information.
PAYE can apply to taxable employment income such as salary, wages, bonuses and certain allowances or benefits. The tax treatment of each payment depends on the applicable rules.
Not every amount shown on a payslip is necessarily taxed in the same way. Some items may be fully taxable, some may qualify for specific treatment, and some deductions may affect taxable income or tax credits.
For official information, visit SARS Personal Income Tax.
2. What Are the PAYE Tax Brackets for 2026/2027?
South Africa uses a progressive income tax system. This means different portions of taxable income are taxed at different rates.
The following individual tax brackets apply for the 2027 year of assessment, covering 1 March 2026 to 28 February 2027.
| Annual taxable income | Tax calculation |
|---|---|
| R1 – R245,100 | 18% of taxable income |
| R245,101 – R383,100 | R44,118 + 26% of taxable income above R245,100 |
| R383,101 – R530,200 | R79,998 + 31% of taxable income above R383,100 |
| R530,201 – R695,800 | R125,599 + 36% of taxable income above R530,200 |
| R695,801 – R887,000 | R185,215 + 39% of taxable income above R695,800 |
| R887,001 – R1,878,600 | R259,783 + 41% of taxable income above R887,000 |
| R1,878,601 and above | R666,339 + 45% of taxable income above R1,878,600 |
These are annual income tax brackets, not flat rates applied to an employee’s entire salary. The calculation also needs to account for applicable rebates and other relevant tax provisions.
You can confirm the latest figures on the official SARS individual income tax rates page.
3. What Is the Difference Between Gross Salary and Net Salary?
Your gross salary is your pay before deductions. Your net salary, often called take-home pay, is the amount remaining after the relevant deductions.
A payslip may contain several different items.
| Payslip item | Meaning |
|---|---|
| Basic salary | Your regular contractual salary before deductions |
| Gross remuneration | Your pay before deductions, including relevant additional remuneration |
| PAYE | Income tax deducted through payroll |
| UIF contribution | An employee contribution where applicable |
| Pension or provident fund | A retirement contribution, if applicable |
| Medical aid | A contribution towards medical cover, if applicable |
| Other deductions | Other authorised or applicable deductions |
| Net salary | The amount payable after deductions |
Your taxable remuneration may not always be identical to your basic salary. Taxable benefits, allowances, qualifying retirement contributions and other factors can affect the calculation.
For that reason, a reliable PAYE estimate should use the relevant taxable income and personal details rather than simply multiplying your basic salary by a tax percentage.
4. How Is PAYE Calculated? A Worked Example
Consider an employee who is under 65 and earns R25,000 per month in taxable remuneration throughout the tax year.
For this simplified example, assume:
- Annual taxable income is R300,000.
- The employee qualifies for the primary rebate only.
- No additional tax credits, special adjustments or other circumstances affect the calculation.
- The annual remuneration remains unchanged throughout the tax year.
Step 1: Calculate annual taxable income
Monthly taxable income is multiplied by 12.
R25,000 × 12 = R300,000.
Step 2: Apply the relevant tax bracket
R300,000 falls within the bracket from R245,101 to R383,100.
The tax calculation is:
R44,118 + 26% of the amount above R245,100.
The amount above the threshold is:
R300,000 − R245,100 = R54,900.
Tax on that portion:
R54,900 × 26% = R14,274.
Add the base tax for the bracket:
R44,118 + R14,274 = R58,392.
This is the annual tax before the primary rebate in this example.
Step 3: Subtract the primary rebate
For the 2026/2027 tax year, the primary rebate for individuals is R17,820.
R58,392 − R17,820 = R40,572.
Step 4: Estimate monthly PAYE
Divide the annual amount by 12.
R40,572 ÷ 12 = R3,381.
<box border radius=”lg” padding={3} gap={1}> <text color=”secondary” size=”sm”>Illustrative monthly calculation</text> <row align=”center” justify=”between”> Monthly taxable income <title size=”md” color=”default”>R25,000</title> </row> <row align=”center” justify=”between”> Estimated monthly income tax <title size=”md” color=”default”>R3,381</title> </row> <divider color=”subtle” /> <row align=”center” justify=”between”> Estimated amount after PAYE only <title size=”lg” color=”default”>R21,619</title> </row> <text color=”secondary” size=”xs”>This is an educational annualised estimate, not a payroll quotation. It excludes UIF, retirement contributions, medical aid and other deductions. Actual payroll PAYE may differ.</text> </box>
This example demonstrates why it is incorrect to assume that every employee pays the same percentage of their salary in tax. The applicable bracket, rebate and individual circumstances matter.
5. What Are the Tax Thresholds for 2026/2027?
The tax threshold is the annual income level below which an individual generally does not pay normal income tax after the applicable rebate, subject to the relevant rules.
For the 2026/2027 tax year, SARS lists these thresholds:
| Age | Annual tax threshold |
|---|---|
| Under 65 | R99,000 |
| 65 to under 75 | R153,250 |
| 75 and older | R171,300 |
For an individual under 65, the R99,000 threshold is equivalent to R8,250 per month if income is earned evenly across 12 months.
However, do not use this monthly conversion as a guarantee that no tax will ever be deducted from every payslip at that income level. Other remuneration, irregular payments, multiple jobs and the applicable payroll calculation can affect the outcome.
The thresholds are based on the applicable rebates and tax rates. They are not a promise that every person below a particular monthly salary will have identical tax treatment.
6. What Are Tax Rebates?
A tax rebate reduces the amount of normal income tax payable. It is different from a deduction that reduces taxable income.
For the 2026/2027 tax year, the individual rebates are:
| Rebate | Annual amount |
|---|---|
| Primary rebate | R17,820 |
| Secondary rebate for people aged 65 and older | R9,765 |
| Tertiary rebate for people aged 75 and older | R3,249 |
Eligible individuals may qualify for more than one rebate based on their age.
For example, an eligible taxpayer aged 65 or older receives the primary rebate and the secondary rebate. A taxpayer aged 75 or older may qualify for the primary, secondary and tertiary rebates.
Your employer’s payroll system takes applicable tax information into account when calculating PAYE. If your circumstances change, check that the information supplied to payroll is correct.
7. Does Medical Aid Reduce PAYE?
Qualifying medical scheme contributions may affect your tax through a medical scheme fees tax credit. This is not the same as simply deducting the full amount of your medical aid contribution from taxable income.
For the 2026/2027 tax year, the monthly medical scheme fees tax credit is:
| Covered person | Monthly tax credit |
|---|---|
| Main member | R376 |
| First dependant | R376 |
| Each additional dependant | R254 |
Eligibility and the amount that can be claimed depend on the applicable rules and the taxpayer’s circumstances.
For example, a qualifying taxpayer with a main member and one dependant may be entitled to a combined monthly credit of R752. This is a reduction in tax liability, not a cash refund of the entire medical aid contribution.
Additional rules may apply to qualifying medical expenses and certain taxpayers. Check the official SARS guidance or consult a registered tax practitioner if you are unsure.
Official information is available in the SARS Budget Tax Guide 2026.
8. Why Might Your PAYE Be Different From a Colleague’s?
Two employees earning the same basic salary may have different PAYE deductions.
Possible reasons include:
- Different ages and applicable rebates.
- Different taxable benefits or allowances.
- Bonuses or irregular remuneration.
- Qualifying retirement fund contributions.
- Medical scheme fees tax credits.
- Multiple sources of income.
- Different payroll periods or annualisation methods.
- A change in remuneration during the tax year.
- Tax directives or other specific tax circumstances.
An employee who receives a bonus may see a different tax deduction in that month because payroll must account for the additional remuneration under the applicable rules.
If your PAYE changes unexpectedly, ask your payroll department for a breakdown of the calculation. Compare the current payslip with previous payslips and check whether your salary, benefits or deductions have changed.
9. What Is the Difference Between PAYE, UIF and Pension Deductions?
These items may appear together on a payslip, but they serve different purposes.
PAYE: Employees’ income tax collected by SARS through the employer.
UIF: The Unemployment Insurance Fund contribution, where applicable. Employee UIF contributions are generally calculated at 1% of remuneration subject to the applicable rules and earnings ceiling. The employer also contributes separately.
Pension or provident fund: A retirement contribution based on the rules of the relevant fund and employment arrangement. Qualifying contributions may receive tax treatment under applicable limits.
These deductions should not be added together and described as income tax. They have different purposes and rules.
If you want to understand why your take-home pay is lower than your gross salary, examine each payslip item separately.
10. How to Check Whether Your PAYE Is Correct
You can take practical steps to check your payroll deductions without trying to reproduce every part of the employer’s payroll system.
- Check your gross remuneration. Confirm that your salary, overtime, bonus and other payments are correct.
- Review taxable benefits and allowances. Check how relevant items are shown on your payslip.
- Confirm your personal details. Make sure your age and other relevant tax information have been supplied correctly.
- Compare your PAYE with previous payslips. Look for changes in salary, benefits or deductions.
- Ask payroll for an explanation. Request a breakdown if the deduction is unexpected.
- Review your tax certificates. Check the information reported by your employer when you receive your IRP5 or IT3(a), as applicable.
- Use SARS resources. Check the current tax tables and employee tax guidance.
If you believe that tax has been deducted incorrectly, raise the issue with your employer’s payroll department. If the matter remains unresolved, consult SARS or a registered tax practitioner.
11. Can You Get a PAYE Refund?
You may receive a refund if SARS determines, after assessing your tax affairs, that you paid more tax than you owed.
However, a refund is not automatic simply because PAYE was deducted from your salary.
The outcome depends on your total taxable income, applicable deductions and credits, tax already paid and other relevant information for the tax year.
A tax assessment may result in a refund, no additional amount due or an amount payable to SARS.
Keep your IRP5 or IT3(a), supporting documents and records of qualifying expenses or contributions. Only claim amounts that you are entitled to claim and can support with appropriate records.
Be cautious of anyone promising a guaranteed SARS refund in exchange for an upfront payment or asking for your eFiling password or banking PIN.
12. Where to Check Official PAYE Rates and Information
Use SARS as your primary source for current tax rates, thresholds, rebates and employee tax guidance.
- SARS individual income tax rates
- SARS tax deduction tables for employers
- SARS Personal Income Tax
- SARS Budget Tax Guide 2026
These official resources are useful when tax rates change or when you need more detailed information about a particular payroll situation.
Frequently Asked Questions
How much PAYE do I pay on a R10,000 salary?
There is no single answer for every employee. The calculation depends on taxable remuneration, the tax year, applicable rebates and individual circumstances. For a person under 65 with no other taxable income or special circumstances, the annual income and primary rebate are relevant to whether normal income tax is payable. Your actual payroll calculation may differ if you receive other remuneration.
What is the PAYE rate in South Africa?
There is no single PAYE rate. South Africa uses progressive individual income tax brackets, with rates ranging from 18% to 45% for the 2026/2027 tax year. The applicable rate depends on taxable income, and the final tax calculation accounts for relevant rebates and other provisions.
Is PAYE deducted every month?
PAYE is generally deducted through payroll when taxable remuneration is paid. The amount may vary when your remuneration changes or when bonuses and other payments are included.
What happens if my employer deducts too much PAYE?
Ask the payroll department to review the calculation. Your final tax position may also be determined through your SARS assessment, which could result in a refund if you have overpaid.
Is PAYE the same as income tax?
PAYE is a method of collecting employees’ income tax during the year. It is not a separate tax in addition to normal personal income tax.
Does everyone pay PAYE in South Africa?
No. Whether income tax is payable depends on the person’s taxable income, applicable tax threshold, age and circumstances. Other rules can apply to people with multiple income sources or particular types of remuneration.
Can I calculate my exact take-home salary using the tax brackets?
The brackets can help you estimate annual income tax, but exact take-home pay may require information about taxable benefits, retirement contributions, medical tax credits, UIF, other deductions and the employer’s payroll method.
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- Explore salary advice and take-home pay
Final Advice
Understanding PAYE helps you read your payslip and plan your monthly budget more accurately. Use the correct tax year, check the applicable brackets and rebates, and remember that PAYE is only one part of the deductions that affect your take-home pay.
For the 2026/2027 tax year, use the latest SARS tax tables rather than an old online calculator. If your deductions look wrong or your circumstances are complicated, ask payroll for a breakdown or seek advice from a qualified tax practitioner.
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