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Provisional tax isn’t a separate type of tax — it’s simply a way of spreading your income tax payments across the year instead of paying one large amount after the year-end.
It’s designed to help individuals and businesses who don’t earn a regular monthly salary with PAYE deductions, such as:
Small business owners
Sole proprietors
Freelancers and consultants
Independent contractors
Members of close corporations (CCs)
By making two (sometimes three) payments during the year, you ensure your tax liability is covered gradually, keeping your cash flow manageable.
According to SARS, the following taxpayers are required to register as provisional taxpayers:
Any individual who earns income other than a salary, such as rental income, business income, or investment income over R30,000 per year.
Companies and close corporations, which are automatically considered provisional taxpayers.
However, individuals who earn only employment income (and whose employer deducts PAYE) generally do not need to register as provisional taxpayers.
Provisional tax is paid in two compulsory periods, with an optional third (top-up) payment:
First Period:
Due 6 months into the tax year (usually 31 August for individuals).
You estimate your total taxable income for the year and pay 50% of your total tax liability.
Second Period:
Due at the end of the tax year (usually 28/29 February).
You submit a revised estimate and pay the remaining balance of your expected tax for the year.
Third (Voluntary) Payment:
Due within 6 months after year-end (for individuals, by 30 September).
This payment helps you avoid interest if your earlier estimates were too low.
Your provisional tax is based on your estimated taxable income for the financial year. SARS provides a formula and tax tables to assist, but in simple terms:
Tax Payable = (Estimated Taxable Income × Tax Rate) – Rebates – PAYE (if applicable)
If your estimate is too low, SARS may charge penalties and interest under the Income Tax Act for underpayment.
That’s why many businesses partner with registered tax practitioners — like PFM Accountants — to ensure their estimates are accurate and compliant.
Late submission or payment of provisional tax can result in:
10% penalty on the outstanding amount
Interest charged on late payments
Possible audit triggers from SARS
It’s always safer to submit early or consult your accountant if you’re unsure of the correct estimate.
Late submission or payment of provisional tax can result in:
10% penalty on the outstanding amount
Interest charged on late payments
Possible audit triggers from SARS
It’s always safer to submit early or consult your accountant if you’re unsure of the correct estimate.
At PFM Accountants (Pty) Ltd, we help individuals and businesses:
Register for provisional tax with SARS
Accurately estimate taxable income
Prepare and submit IRP6 returns on time
Manage cash flow and tax planning for the year
Avoid penalties and interest charges
We simplify the process, keep you compliant, and make sure your tax affairs are handled with precision and care.