Every year, South African taxpayers wait for the Budget Speech to learn how the personal income tax brackets will be adjusted. For the 2026/2027 tax year (1 March 2026 to 28 February 2027), National Treasury has made meaningful adjustments that affect every working South African. Understanding these brackets is not just about knowing what percentage you pay — it is about understanding how bracket creep, rebates, and thresholds interact to determine your actual take-home pay.
This guide breaks down the new tax tables, explains what has changed, and shows you how to calculate your liability using our free tools.
The 2026/2027 Personal Income Tax Brackets
South Africa uses a progressive tax system where different portions of your income are taxed at different rates. The 2026/2027 brackets, adjusted upward by approximately 4.4% to provide partial relief from bracket creep (fiscal drag), are:
- R0 – R243 000: 18%
- R243 001 – R472 000: 26%
- R472 001 – R654 000: 31%
- R654 001 – R884 000: 36%
- R884 001 – R1 178 000: 39%
- R1 178 001 – R1 661 000: 41%
- Above R1 661 001: 45%
These are marginal rates. If you earn R500 000 per year, you do not pay 31% on the full amount. Instead, you pay 18% on the first R243 000, 26% on the next R229 000, and 31% on the remaining R28 000. The total tax before rebates would be approximately R109 960.
Rebates and Tax-Free Thresholds
SARS provides rebates that directly reduce your tax liability:
- Primary rebate (all taxpayers): R17 640
- Secondary rebate (65 and older): R9 444
- Tertiary rebate (75 and older): R3 145
The primary rebate means that no tax is payable if your taxable income is below approximately R98 000 per year (the tax-free threshold for individuals under 65). For those aged 65 and older, the threshold is approximately R152 000, and for those 75 and older, approximately R170 000.
Use our South Africa salary calculator to see exactly how these brackets and rebates apply to your specific income. The calculator already reflects the 2026/2027 rates.
What Changed from the Previous Year
The key changes for 2026/2027 include:
- Bracket creep relief: All bracket thresholds have been adjusted upward by approximately 4.4%, broadly in line with expected inflation. This means a worker whose salary increased by inflation alone will not be pushed into a higher bracket.
- Rebate increases: The primary, secondary, and tertiary rebates have all been increased, raising the tax-free thresholds.
- Medical tax credits: The monthly medical scheme fees tax credit has been adjusted to R364 per month for the first two members and R246 for each additional dependant.
If you earn R25 000 per month (R300 000 per year), the bracket adjustment saves you roughly R1 200 over the full tax year compared to the previous year's tables. That is R100 per month — modest, but it prevents the slow erosion of purchasing power that bracket creep causes.
Understanding Bracket Creep (Fiscal Drag)
Bracket creep occurs when inflation pushes your nominal salary higher, moving more of your income into higher tax brackets, even though your real purchasing power has not increased. If inflation is 5% and your salary increases by 5%, you are no better off in real terms — but without bracket adjustment, you would pay more tax.
South Africa has not consistently adjusted brackets for inflation. In some years, brackets were frozen entirely, resulting in significant fiscal drag. The 4.4% adjustment for 2026/2027 is welcome but does not fully compensate for years of under-adjustment. Use our salary comparison calculator to see how your real take-home pay has changed over time.
Tax Planning Tips for 2026/2027
- Maximise retirement contributions: Contributions to retirement funds are deductible up to 27.5% of the greater of remuneration or taxable income, capped at R350 000 per year. This directly reduces your taxable income and can drop you into a lower bracket. See our retirement fund calculator.
- Claim medical tax credits: Ensure your employer is correctly applying the monthly medical scheme fees credit. Check with our medical tax credits calculator.
- Review your tax directive: If you have multiple income sources, ensure SARS is withholding the correct amount by reviewing your PAYE directive.
- Donate to approved PBOs: Donations to Public Benefit Organisations (section 18A) are deductible up to 10% of taxable income.
Key Takeaways
- The 2026/2027 brackets have been adjusted upward by approximately 4.4%, providing partial bracket creep relief.
- The tax-free threshold is approximately R98 000 for individuals under 65.
- Medical tax credits have been increased to R364 per month for the first two members.
- Retirement fund contributions remain the most powerful tool for reducing taxable income.
- Use our salary calculator to see the exact impact on your take-home pay.