Provisional Tax in South Africa: A Jargon- Free Guide for Busy Professionals

If you earn income that is not fully taxed through PAYE – think side hustles, rental income, consulting, freelancing, or dividends – you may need to pay provisional tax. It is not a separate type of tax, but a way to prepay your income tax during the year, so you do not face a large bill at assessment time and end up without the necessary cash to pay it. Here is a clear, practical guide from Huysamen Westraad Inc. to help you plan, file and stay on SARS’s good side.

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Who should pay provisional tax?

You are likely a provisional taxpayer if you:

• Run a small business or freelance/consult on the side.
• Earn rental income or investment income that PAYE does not fully cover.
• Are a company, close corporation or trust (these are typically provisional by default).

If your only income is a salary with PAYE correctly deducted, you generally are not a provisional taxpayer.

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How provision tax works

Provisional tax spreads your expected tax payments over the year using the IRP6 return:

1. First period: Mid-year estimate and payment.
2. Second period: Year-end estimate and payment to top-up.
3. An optional third/top-up after year-end: If your second estimate fell short, this payment helps limit interest.

The goal is simple: estimate your taxable income for the year, pay tax in line with that estimate, and avoid surprises.

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Know how to file on eFiling (IRP6)

On SARS eFiling, select the IRP6 for the relevant period, enter your estimated taxable income, and let the system calculate the provisional amount. Pay electronically and keep the proof. If numbers change, you can revise your estimate in the second period (and use the top-up if needed).

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Provisional tax payment deadlines

Dates vary with year-ends, but most individual taxpayers (with the standard February year-end) work to:

1. First payment: Due halfway through the tax year.
2. Second payment: Due at the end of the tax year (often end-February).
3. Optional top-up: Shortly after year-end to reduce interest.

Set early reminders on your calendar, as missed or underestimated payments can result in penalties and interest.

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Smart estimating of provisional tax

Estimating your income may sound like a bit of an art – but it is a necessary one to avoid penalties. Ensure that you:

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Work from real numbers

Estimating is not simply thumb-sucking a figure. Use year-to-date management accounts or a simple income/expense tracker.

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Include all income

Account for salary top-ups, rental, freelance invoices, interest/dividends (where taxable). The eyes of SARS won’t miss anything – neither should yours.

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Be conservative, not careless

Under-estimating can trigger penalties so “low-balling” your income to avoid tax payment today is not a good strategy. Rather, use the best available info, add a margin, and file with confidence.

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Keep slips and statements

Source documents make the final assessment painless and defendable, so get your admin game on.

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Cash-flow tips for SMEs and side hustles

• Set aside a percentage of every invoice into a separate “tax” account the moment you get paid. If you keep it in your main account, you may get tempted to see it as usable money.
• If your busiest months are later in the year, match the second payment accordingly.
• Make tax work for you by claiming legitimate expenses (e.g. travel costs, home-office portions, phone/data, equipment) – small items add up and reduce the tax sting.
• A short quarterly check-in helps you spot changes early (new contracts, rent increases, big once-off costs) and review your payment.

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Need help?

Huysamen Westraad Inc. helps individuals and SMEs plan, estimate and file provisional tax accurately to minimise penalties while ensuring smooth cash flow year-round. We will:

• Build a realistic mid-year and year-end estimate from your data.
• Identify deductible expenses you may be missing.
• Map a simple cash-flow plan so payments do not pinch.
• Handle IRP6 submissions and reminders and assist with top-ups where needed.

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Get in touch for straightforward, professional help with provisional tax in Cape Town and beyond – so that you can focus on growing your business instead of paying the taxman.