Your income for the year before the withdrawal
Minimum R2,000 — one withdrawal per tax year
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Tax on Withdrawal
R 9 300,00
Net Cash in Hand
R 20 700,00
Effective Rate on Withdrawal
Withdraw Now
R 20 700,00
after R 9 300,00 tax at marginal rates
Take at Retirement
R 30 000,00
after R 0,00 tax (first R 550 000,00 of retirement lump sums is tax-free)
Waiting until retirement would save you R 9 300,00 in tax on this amount — and the money keeps growing in your fund.
Since 1 September 2024, one third of your retirement contributions goes into a savings pot you can access. The other two thirds stay locked until retirement. Your savings pot started with seed money of 10% of your fund balance on 31 August 2024, capped at R30,000.
You can take one withdrawal per tax year, of at least R2,000. The amount is added to your taxable income and taxed at your marginal rate — there is no tax-free portion. Your fund deducts the tax through a SARS tax directive before paying you.
If you leave the money until retirement, lump sums are taxed under a much kinder table: the first R550,000 is taxed at 0% (all your retirement lump sums since October 2007 count towards this limit).
What is the two-pot retirement system?
From 1 September 2024, your retirement contributions split into two pots. One third goes into a savings pot you can access before retirement. Two thirds go into a retirement pot that stays locked until you retire. Your fund also moved seed money into your savings pot when the system started: 10% of your balance on 31 August 2024, up to R30,000.
How is a savings pot withdrawal taxed?
The withdrawal is added to your income for the year and taxed at your marginal rate, which is between 18% and 45%. There is no tax-free portion. Your fund asks SARS for a tax directive and takes the tax off before paying you, so you receive the net amount.
How much can I withdraw and how often?
You can make one withdrawal per tax year (1 March to the end of February). The minimum is R2,000 and the maximum is whatever is in your savings pot. If SARS shows you owe outstanding tax, that debt can also be taken off your payout.
Is it better to wait until retirement?
Usually, yes. If you take the money at retirement instead, the first R550,000 of your retirement lump sums is taxed at 0%. Withdrawing now costs you tax at your marginal rate, and you also lose the growth that money would have earned.
Will I owe more tax later?
Possibly. SARS works out the directive using the income it has on record for you. If your real income this year is higher, the fund may take off too little tax, and you would pay the shortfall when your tax return is assessed.
Disclaimer: This calculator provides estimates based on current SARS (South African Revenue Service) rates and thresholds for the 2026/27 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax practitioner before making financial decisions. Read our terms
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