Retirement Annuity Tax Deduction Calculator South Africa 2026
This retirement annuity tax deduction calculator shows how much of your retirement contributions you can deduct and the tax it saves you. SARS lets you deduct your contributions to retirement annuity, pension and provident funds — up to 27.5% of your income, capped at R430,000 for the 2026/27 tax year. Enter your income and your yearly contribution to see your deduction and your tax saving.
Last updated: July 2026 · 2026/27 tax year · Source: SARS (s11F · Budget 2026)
All your retirement annuity, pension and provident fund contributions for the year, added together.
Got your number? Two things worth checking next
→ Your take-home pay — what lands in your account each month after tax. → Tax on your retirement lump sum — what you’ll pay when you retire and take cash.How the Retirement Annuity Deduction Works
When you contribute to a retirement annuity, pension or provident fund, SARS lets you subtract those contributions from your income before working out your tax. That means the money you put away for retirement is not taxed now — you only pay tax on it much later, usually at a lower rate, when you draw a pension. The size of the deduction is the same whichever type of fund you use, and all your funds are added together.
Because the deduction lowers your taxable income, your saving is your contribution multiplied by your marginal tax rate — the rate on your top slice of income. This calculator works out that saving the way SARS does: it calculates your tax with the deduction and without it, and the difference is what you save. The higher your income, the more each rand of contribution saves you.
The 27.5% and R430,000 Limits
There is a ceiling on how much you can deduct in a year. It is the lesser of 27.5% of the greater of your remuneration or taxable income, and R430,000 for the 2026/27 tax year (up from R350,000 — the first increase since 2016). So if you earn R500,000, your limit is 27.5% of that, about R137,500; the R430,000 cap only bites for very high earners contributing large amounts.
If you contribute more than your limit in a year, you do not lose the excess — it carries forward to future years, where it can be deducted or set against retirement lump sums later. The income used for the 27.5% test is your taxable income before this deduction, and it excludes retirement lump sums and severance benefits.
Should You Top Up Before Tax-Year-End?
The retirement deduction is one of the few ways a salary earner can still reduce a tax bill after the year has happened. If you are below your 27.5% limit, an extra contribution to a retirement annuity before the tax year closes on 28 February increases your deduction and hands you back tax at your marginal rate. Someone in the 39% bracket, for example, gets R39 back for every R100 they add, up to their limit. Use the calculator above to see exactly what a top-up would save you before you commit the money.
Frequently Asked Questions
How much of my retirement contribution can I deduct?
Up to 27.5% of the greater of your remuneration or taxable income, capped at R430,000 for the 2026/27 tax year. Your deduction is the lesser of those two figures.
What happens if I contribute more than the limit?
You do not lose it. The excess carries forward to future years and can be deducted then, or set against a retirement lump sum when you retire.
Does the limit include my work pension fund?
Yes. Your contributions to pension, provident and retirement annuity funds are added together and share the same 27.5% / R430,000 limit.
When is the deadline to contribute?
The tax year ends on 28 February. A contribution made before then counts towards that year’s deduction.
Related pages
📋 Verified — Official sources: SARS (Budget 2026 — R430,000 cap) · SARS (s11F retirement deduction)
⚠️ This is general information, not financial, tax, or legal advice. KnowMyGovt is an independent service — not affiliated with or endorsed by SARS, the Department of Employment and Labour, the UIF, SASSA, or the South African government — and is not liable for decisions made in reliance on it.
