What is provisional tax?
Provisional tax is a method SARS uses to collect income tax in advance — in instalments during the year — rather than in one large payment at assessment time.
It is not an extra tax. It is simply the normal income tax you owe, collected earlier to avoid large year-end liabilities (and to keep SARS's cash flow smooth).
Who is a provisional taxpayer?
You are a provisional taxpayer if you earn income other than a salary on which PAYE is deducted. This includes:
- Business owners (sole proprietors, company directors, CC members — see our guide to choosing a business structure if you're still deciding)
- Freelancers and consultants
- Rental income earners (even if you also have a salary)
- Individuals with significant investment income (interest, dividends above the exemption)
- Commission earners where commission exceeds 50% of total remuneration
You are not a provisional taxpayer if your only income is a salary with PAYE deducted and your total taxable income is below R30 000 from other sources.
The two provisional tax periods
First provisional: end of August
Your first provisional payment covers the first six months of the tax year (March to August). The estimated tax is based on your projected annual taxable income. You can use your prior year taxable income as a starting point.
Second provisional: end of February
This covers the full tax year. Your estimate must be accurate — SARS requires your estimate to be at least 80% of your actual final tax liability to avoid the 20% underestimation penalty.
Third (optional) top-up payment: 30 September
After filing your annual return, SARS assesses your actual income. If you underpaid during the provisional period, you may need to pay a top-up by 30 September to avoid interest (currently 10.25% per annum from 2 March 2026).
How to calculate your provisional estimate
The basic calculation:
- Estimate your total taxable income for the full year
- Apply the income tax table to calculate gross tax
- Subtract your tax rebates (primary, secondary, tertiary depending on age)
- Subtract employees' tax already paid (PAYE from salary, if applicable)
- The balance is your provisional tax liability — divide by 2 for each period
The 80% rule — don't get penalised
At the second provisional return, SARS allows you to use the basic amount (your prior year's taxable income) if it is within 8% of the current year. If your actual income increases significantly, this shortcut can trip you.
If your second period estimate is less than 80% of your actual taxable income, SARS imposes a 20% penalty on the shortfall.
Getting the estimate right is critical. This is not the time to guess low hoping for the best.
What happens if I miss a provisional payment?
- Late payment attracts interest from the due date at the SARS prescribed rate
- Non-payment can result in penalties and SARS enforcement action
- Underestimation by more than 20% of the actual tax results in the 20% penalty
Related reading
- SARS Tax Season 2026: Key Dates and Deadlines
- Sole Proprietor vs Pty Ltd: Which Is Right for Your Business?
How FinSup helps provisional taxpayers
We calculate your provisional tax estimates carefully, using your year-to-date income and projected figures. We submit your IRP6 returns on time and flag any risk of underestimation penalties before you commit to a number.
If you are unsure whether you are a provisional taxpayer — or if you have been one and not been filing — get in touch. It is far better to regularise your affairs proactively than to wait for SARS to contact you.