In South Africa, SARS refers to the South African Revenue Service. It is the government agency responsible for the administration and collection of taxes in the country. SARS manages various taxes, including income tax, value-added tax (VAT), corporate tax, and others.
When people refer to “SARS tax,” they are generally talking about the income tax administered by the South African Revenue Service. Income tax is a direct tax on individual’s and entities’ income, and it is a significant source of revenue for the South African government.
South Africa has a progressive tax system, meaning that individuals with higher incomes are subject to higher tax rates. The income tax system in South Africa includes various tax brackets, deductions, and credits to calculate the amount of tax owed by individuals and businesses.
The South African Revenue Service (SARS) administers various taxes in South Africa. Here are some key points about the SARS tax system:
Income Tax: This is a tax on individuals and businesses based on their income or profits. The tax rates for individuals for the 2025 tax year are as follows:
- Taxable income ® 1 – 237 100: 18% of taxable income
- Taxable income ® 237 101 – 370 500: 42 678 + 26% of taxable income above 237 100
- Taxable income ® 370 501 – 512 800: 77 362 + 31% of taxable income above 370 500
- Taxable income ® 512 801 – 673 000: 121 475 + 36% of taxable income above 512 800
- Taxable income ® 673 001 – 857 900: 179 147 + 39% of taxable income above 673 000
- Taxable income ® 857 901 – 1 817 000: 251 258 + 41% of taxable income above 857 900
- Taxable income ® 1 817 001 and above 644 489 + 45% of taxable income above 1 817 000
Tax Rebates: These are amounts that are deducted from the total tax payable by a taxpayer. For the 2025 tax year, the primary rebate is R17 235, the secondary rebate (for taxpayers aged 65 and older) is R9 444, and the tertiary rebate (for taxpayers aged 75 and older) is R3 145.
Tax Thresholds: These are the levels of income at which a taxpayer starts to pay tax. For the 2025 tax year, the tax threshold for taxpayers under 65 is R95 750, for taxpayers 65 and older it’s R148 217, and for taxpayers 75 and older it’s R165 689.