Tax Thresholds Explained
The tax threshold is the income level below which you pay no income tax at all. Knowing yours tells you whether SARS takes anything from your pay, and it depends on your age. This guide explains what the threshold is, how the rebates create it, what the current thresholds are, and what they mean for paying and filing tax.
Last updated: May 2026 · Source: SARS · National Treasury Budget
What the Tax Threshold Is
The tax threshold is simply the point at which income tax starts. If your taxable income for the year is below the threshold for your age, you owe no income tax and no PAYE should come off your salary. Earn above it, and you start paying tax — but only on the income above the threshold, not on all of it. It is one of the most useful numbers to know, because it tells low earners and part-time or seasonal workers immediately whether tax applies to them at all.
How Rebates Create the Threshold
The threshold is not a separate rule — it comes directly from the rebate. Everyone gets a primary rebate of R17,820 a year, which is subtracted from the tax you owe. The lowest tax bracket is 18%, so the rebate cancels out the tax on the first chunk of income: R17,820 divided by 18% works out to R99,000. That is exactly why the tax-free threshold for someone under 65 is R99,000 a year. Older taxpayers get extra rebates, so more of their tax is cancelled out, which pushes their threshold higher.
The Current Thresholds by Age
There are three thresholds, set by age:
- Under 65: you pay no income tax on taxable income below R99,000 a year.
- 65 to 74: the threshold rises to R153,250 a year, thanks to the extra secondary rebate.
- 75 and older: it rises again to R171,300 a year, with the tertiary rebate added on top.
Your age for the year is what counts, and the higher thresholds apply automatically — you don’t need to apply for them. As a rough monthly guide, the under-65 threshold of R99,000 a year works out to about R8,250 a month, below which no PAYE should be deducted from a steady salary.
Paying Tax vs Filing a Return
Being below the threshold means you owe no income tax, but it is not always the same as not having to file. SARS sets a separate filing requirement, and you may still need to submit a return — or may be assessed automatically — depending on your circumstances, such as having more than one source of income. If your employer has been deducting PAYE even though you earn below the threshold, filing a return is how you would claim that money back. When in doubt, it is safest to check your filing obligation on the SARS website rather than assume.
Why the Threshold Changes
The thresholds usually rise a little each year. In the annual Budget in February, the Minister of Finance often increases the rebates to give relief against inflation, and because the threshold is built from the rebate, it goes up automatically when the rebate does. This is meant to stop “bracket creep” — where a salary that only rises with inflation would otherwise be pushed into paying more tax. It also means the exact threshold figure is refreshed each year, so it is worth checking the current number rather than relying on an old one.
Frequently Asked Questions
What is the tax threshold for under 65s?
R99,000 a year. Below this, someone under 65 pays no income tax.
Why is the threshold higher for older people?
Because they receive extra rebates — a secondary rebate from 65 and a tertiary rebate from 75 — which cancel out tax on more of their income.
If I’m below the threshold, do I still need to file?
Possibly. Owing no tax is not always the same as not having to file. Check your filing requirement with SARS, especially if you have more than one income source.
Where does the R99,000 figure come from?
From the primary rebate of R17,820 divided by the lowest tax rate of 18%, which equals R99,000.
Related pages
📋 Verified — Official sources: SARS · National Treasury Budget
⚠️ This page is for informational purposes only and does not constitute legal or financial advice. KnowMyGovt is not affiliated with SARS nor the South African government. Always confirm current rates and filing requirements on the official SARS website.
