How to Compute PAYE in South Africa (2026 Worked Example)

You run payroll in South Africa 🇿🇦 and every month the same question lands on your desk: how much PAYE do I actually withhold from this salary, and what does UIF and SDL add on top? Get it wrong and SARS penalties follow. Get it right and you still spend an evening with a calculator and a printed tax table. This guide walks the full calculation, step by step, with real numbers and the current SARS figures cited.

The three things that come off a South African payslip

South African payroll has three separate statutory pieces. Do not confuse them — they use different bases and different rates.

PAYE is the big one and the one people get wrong, so start there.

Step 1 — Find the annual tax brackets

PAYE is worked out on an annual basis and then divided across the pay periods. For the 2026 tax year (1 March 2025 to 28 February 2026) the SARS individual tax brackets were unchanged from the prior year:

The South African tax year runs 1 March to 28/29 February, not the calendar year. Brackets are reviewed each national Budget, so before you run a live payroll always confirm the figures for the current tax year on the SARS page linked above.

Step 2 — Subtract the rebates

Everyone who pays tax gets the primary rebate. It is a flat amount subtracted from the tax you owe, not from your income. For 2026 the SARS rebates are:

• Primary rebate: R17,235 (all ages)
• Secondary rebate: R9,444 (age 65 and older, on top of the primary)
• Tertiary rebate: R3,145 (age 75 and older, on top of both)

The rebate is why low earners pay nothing. The tax threshold — the income below which no PAYE is due — is simply the point where 18% of income equals the rebate. For 2026 that is R95,750 for people under 65 (because 18% × R95,750 = R17,235), rising to R148,217 at 65 and R165,689 at 75.

If an employee under 65 earns R95,750 a year or less, their PAYE is zero. The rebate wipes it out. Withholding anything is an error you will have to refund.

Step 3 — Add UIF and SDL

UIF (Unemployment Insurance Fund) is 1% deducted from the employee and 1% paid by the employer — 2% in total. But it is capped. The remuneration ceiling is R17,712 per month, so the most any party contributes is R177.12 per month each. Above that salary, UIF stops growing.

SDL (Skills Development Levy) is an employer-only cost of 1% of total payroll. Employers whose total annual payroll is R500,000 or less are exempt. SDL never comes off the employee's payslip.

Worked example — R30,000 a month, under 65

Take an employee earning R30,000 per month, which is R360,000 a year in taxable income, aged under 65, at an employer that is not SDL-exempt.

Annual tax before rebate. R360,000 sits in the second bracket (237,101 to 370,500):

R42,678 + 26% × (R360,000 − R237,100) = R42,678 + 26% × R122,900 = R42,678 + R31,954 = R74,632

Apply the primary rebate:

R74,632 − R17,235 = R57,397 annual PAYE

Divide by 12 for the monthly withholding:

R57,397 ÷ 12 = R4,783.08 PAYE per month

UIF. R30,000 is above the R17,712 ceiling, so the employee's UIF is capped: 1% × R17,712 = R177.12. The employer matches it with another R177.12.

SDL. Employer only: 1% × R30,000 = R300.00.

Now pull it together.

The employee nets R25,039.80. The employer's true cost is higher than the R30,000 salary: R30,000 + R177.12 UIF + R300 SDL = R30,477.12 paid out and remitted every month.

Note the effective tax rate. This employee's PAYE is R4,783 on R30,000 gross — about 16%, well below the 26% marginal bracket, because the first R237,100 is taxed at 18% and the rebate claws a chunk back. This is why quoting the top bracket rate to an employee is misleading. Always show the blended effective rate.

The honest limit

This worked example assumes a straightforward monthly salary with no retirement-fund deductions, no medical scheme tax credits, no travel allowance and no fringe benefits. Real payslips get more complex fast: retirement annuity contributions reduce taxable income (subject to caps), medical scheme members get a fixed monthly tax credit, and travel or company-car allowances are only partly taxed. Each of those changes the PAYE figure. Treat this guide as the backbone calculation, then layer the individual's specific deductions on top — and confirm the current-year brackets with SARS, since a Budget can move them.

Does AnooreHR handle this?

South Africa is on the AnooreHR roadmap as a country profile pack — the same architecture that runs Nigeria live today, where every tax band, rebate and statutory rate lives in data, not code, so a Budget change is a data update rather than a code release. When the South Africa pack goes live, the SARS brackets, the primary rebate, the UIF ceiling and SDL exemption in this guide become the engine that computes each payslip, posts the run straight into your general ledger, and pushes payslips to every employee's phone. You would enter the salary; the platform does the arithmetic above. Start with AnooreHR or book a quick demo to see the country-pack model — Nigeria live now, more coming.

Related reading: South Africa payroll guide 2026, How country profile packs put the tax engine in JSON, How to compute PAYE in Nigeria