How income tax brackets actually work in South Africa
No, moving into a higher bracket doesn't mean all your money is taxed more. How marginal rates, rebates and the tax threshold really work.
6 min read
The most expensive tax myth in South Africa: "If I get a raise into the next bracket, I'll take home less." It's wrong, and understanding why will make every payslip and bonus make sense.
Brackets are steps, not switches
South Africa uses marginal tax rates. Each chunk of your income is taxed at that chunk's rate — only the rand above a bracket line pays the higher rate.
For the 2026/27 tax year:
| Taxable income (per year) | Rate on that slice |
|---|---|
| Up to R237,100 | 18% |
| R237,101 – R370,500 | 26% |
| R370,501 – R512,800 | 31% |
| R512,801 – R673,000 | 36% |
| R673,001 – R857,900 | 39% |
| R857,901 – R1,817,000 | 41% |
| Above R1,817,000 | 45% |
Earn R250,000? Only the R12,900 above R237,100 is taxed at 26%. Everything below is still taxed at 18%. A raise can never reduce your take-home pay.
The rebate: your tax-free head start
Everyone under 65 gets the primary rebate of R17,235 knocked straight off their tax bill. That's why you only start paying income tax above the tax threshold of R95,750 a year (about R7,979/month).
Your marginal rate vs your effective rate
- Marginal rate: the rate on your next rand. This is what matters for decisions — like how much an RA contribution saves you.
- Effective rate: your total tax ÷ total income. Always lower than your marginal rate.
Someone on R400,000 has a 31% marginal rate but an effective rate around 19%. When people say "I pay 31% tax", they usually don't.
Bracket creep: the silent increase
The bracket lines above haven't moved since 2023/24. When brackets don't rise with inflation, your inflationary raise pushes more of your income into higher slices — a tax increase nobody announced. It's why your raise can feel smaller than the percentage suggested.
See it on your own payslip
Our payslip decoder applies these exact tables to your salary and shows the tax on each slice, plus UIF and medical credits, line by line.