How PAYE works in South Africa
PAYE is how SARS collects income tax from employees in South Africa — your employer deducts it monthly and pays it on your behalf. Here's everything you need to know about brackets, rebates and how it all adds up.
What is PAYE?
PAYE — short for Pay As You Earn — is the system the South African Revenue Service (SARS) uses to collect income tax from employees. Instead of paying tax in one giant lump at the end of the year, your employer estimates your annual tax bill, divides it by 12, and deducts it from each monthly salary before paying you.
Who pays PAYE?
Anyone earning above the annual tax threshold. For 2024/2025 the thresholds are:
- Under 65: R95 750 per year (≈ R7 980 / month)
- 65 – 74: R148 217 per year
- 75 and older: R165 689 per year
If you earn less than this, you pay no income tax — but UIF still applies.
The 2024/2025 SARS tax brackets
| Taxable income (annual) | Rates of tax |
|---|---|
| R0 – R237 100 | 18% of taxable income |
| R237 101 – R370 500 | R42 678 + 26% above R237 100 |
| R370 501 – R512 800 | R77 362 + 31% above R370 500 |
| R512 801 – R673 000 | R121 475 + 36% above R512 800 |
| R673 001 – R857 900 | R179 147 + 39% above R673 000 |
| R857 901 – R1 817 000 | R251 258 + 41% above R857 900 |
| R1 817 001+ | R644 489 + 45% above R1 817 000 |
Important
Rebates: the discount everyone gets
After your PAYE is calculated, SARS subtracts a rebate — a flat annual reduction in tax owed:
- Primary rebate (everyone): R17 235
- Secondary rebate (65+): additional R9 444
- Tertiary rebate (75+): additional R3 145
How a R30 000 salary is taxed step-by-step
- Annual gross: R30 000 × 12 = R360 000.
- Falls in the second bracket → R42 678 + 26% × (R360 000 − R237 100) = R74 632.
- Subtract primary rebate R17 235 → R57 397 annual PAYE.
- Divide by 12 → ~R4 783 / month PAYE.
- Add UIF of R177.12 → total monthly deductions ≈ R4 960.
What about UIF?
The Unemployment Insurance Fund is a separate deduction. 1% of your gross salary is deducted from you, capped at R177.12 / month (because the cap is applied at R17 712 of monthly income). Your employer matches your contribution.
Common scenarios at a glance
| Scenario | Gross / mo | PAYE | UIF | Take-home |
|---|---|---|---|---|
Entry-level | R 12 000 | R 724 | R 120 | R 11 156 |
Average earner | R 25 000 | R 3 483 | R 177 | R 21 340 |
Mid-career | R 45 000 | R 9 503 | R 177 | R 35 320 |
Senior / specialist | R 75 000 | R 20 940 | R 177 | R 53 883 |
Executive | R 150 000 | R 51 690 | R 177 | R 98 133 |
FAQs
Why is my PAYE different from this calculator?
Bonuses, commission, fringe benefits and salary structuring (e.g. travel allowances) all affect your PAYE. Our calculator uses a clean monthly salary assumption.
Can I get PAYE refunded?
Yes — when you submit your annual SARS return (filing season opens in July), if your deductible expenses (RA contributions, medical, donations) exceed what your employer accounted for, you'll get a refund.
Do freelancers pay PAYE?
Independent contractors usually pay provisional tax instead — twice a year, based on estimated annual income.
Run your own numbers
Add your retirement, medical aid and other deductions for a personalised result.
Related guides
Disclaimer: All figures are estimates based on SARS 2024/2025 tax tables. This is not financial advice — consult a registered tax practitioner for your specific situation.