South Africa | Budget Tax Policy Proposals Affecting Payroll for 2026/2027
During the recent Budget Speech, the Draft Rates and
Monetary Amounts and Amendment of Revenue Laws Bill was published. This
draft Bill includes several additional proposed amendments relating to:
The proposed effective date for these amendments is 1
March 2026.
It is important to note that, unlike the tax tables, rebates
and medical tax credits, the legislation does not permit the Minister to
amend these amounts through the Budget Speech alone. These proposed changes
must be formally promulgated before they can take legal effect, unless prior
approval is obtained from National Treasury and/or SARS to implement them before
enactment.
Summary of Proposed Amendments
Bursaries and Scholarships
|
Category
|
Current
Threshold (R)
|
Proposed
Threshold (R)
|
|
Remuneration
proxy
|
600 000
|
900 000
|
Where the relative does not have a disability
|
Qualification
Level
|
Current
(R)
|
Proposed
(R)
|
|
NQF Level 1–4
(Grade R–12)
|
20 000
|
30 000
|
|
NQF Level
5–10
|
60 000
|
90 000
|
Where the family member has a disability
|
Qualification
Level
|
Current
(R)
|
Proposed
(R)
|
|
NQF Level 1–4
(Grade R–12)
|
30 000
|
45 000
|
|
NQF Level
5–10
|
90 000
|
130 000
|
Exemptions
|
Item
|
Current
Limit (R)
|
Proposed
Limit (R)
|
|
Occupational
death lump sum
|
300 000
|
800 000
|
|
Awards for
bravery and long service
|
5 000
|
16 000
|
Retirement Fund Tax Deduction
|
Item
|
Current
|
Proposed
|
|
Annual
deduction limit
|
Lesser of
R350 000 or 27.5% of remuneration
|
Lesser of
R430 000 or 27.5% of remuneration
|
Acquisition of Immovable Residential Property (Fringe
Benefit Exemption)
|
Item
|
Current
Limit (R)
|
Proposed
Limit (R)
|
|
Remuneration
proxy
|
250 000
|
360 000
|
|
Market value
of property
|
450 000
|
650 000
|
Further information and/or confirmation will be communicated
once it becomes available.
Related Articles
South Africa | Budget Speech 2026
On Wednesday, 25 February 2026, the Minister of Finance, Mr Enoch Godongwana, delivered the 2026 National Budget Speech to the National Assembly. Budget 2026 responds to continued fiscal pressure and a fragile economic recovery with a cautious ...
South Africa Payroll Tax Guide 2026-2027
The South Africa Payroll Tax Guide is an easy-to-understand summary of statutory contributions associated with payroll for the 2026-2027 tax year. Drop Files to Attach
South Africa Payroll Tax Guide 2025-2026
The South Africa Payroll Tax Guide is an easy-to-understand summary of statutory contributions associated with payroll for the 2025-2026 tax year.
South Africa Compact Payroll Guide 2023/2024
This guide is designed to provide a brief overview of the statutory rates and contributions that employers need to be aware of when calculating statutory payroll contributions in South Africa. This guide will provide you with the essential payroll ...
Why would tax calculate on an employee whose salary is below the tax bracket?
The tax (PAYE) would calculate on an employee's payslip whose earnings are below the tax bracket if their Periods Worked is incorrect. Navigate > Employee > Payroll Processing > Edit Payslip Check the value next to "Divide by Periods Worked" - if ...