JHB 
Provisional tax
in South Africa
What is provisional tax?
MMS Group manages a range of tax administration on behalf of our clients, including the calculation and payment of provisional tax. With our professional assistance, taxpayers do not have to worry about the accuracy of their calculations. We also ensure all processes are completed on time and according to SARS guidelines to ensure absolute compliance during annual submissions.
Who is a provisional taxpayer?
You are a provisional taxpayer if
- You earn income that is not remuneration, such as rental income, freelance or consulting fees, investment income, or profit from a business you run.
- You receive remuneration from an employer that is not registered for employees’ tax.
- You are a company. Every company is automatically a provisional taxpayer.
You are a not provisional taxpayer if
- Receive interest of less than R23 800 and are under 65.
- Receive interest of less than R34 500 and are 65 or older.
- Receive an exempt amount from a tax-free savings account.
- Earn no income from a business and your taxable income for the year will not exceed the annual tax threshold — R99 000 if you are under 65, R153 250 if you are 65 to 74, and R171 300 if you are 75 or older.
- Earn no income from a business and your income from interest, dividends, foreign dividends, rental of fixed property and remuneration from an unregistered employer will total R30 000 or less for the year.
- Are an approved public benefit organisation or recreational club, a body corporate or share block company, a deceased estate, or a small business funding entity.
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Provisional tax dates and deadlines
| Payment | Due | Current cycle | What it covers |
| First period | Within the first six months of the year of assessment – 31 August | Was due Monday 31 August 2026 for the 2027 year of assessment | Compulsory. An estimate of at least half your expected taxable income for the full year. |
| Second period | Last business day of the year of assessment – on or before 28 February | Friday 26 February 2027 for the 2027 year of assessment, as 28 February falls on a Sunday | Compulsory. A full-year estimate, less what you paid in the first period. This is the estimate the underestimation penalty is measured against. |
| Third period | Seven months after a February year-end – 30 September. Six months after year-end in all other cases | Thursday 30 September 2027 for the 2027 year of assessment | Voluntary top-up. Paying any shortfall here stops interest accruing before SARS issues your assessment. |
If a due date falls on a Saturday, Sunday or public holiday, the payment should be made on the last business day before that date.
Companies with a year-end other than February follow the same pattern relative to their own financial year: six months in for the first payment, the last business day of the year for the second, and six months after year-end for the voluntary third.
How provisional tax is calculated
The basic amount
First period, second period and the voluntary third payment
Submitting your IRP6 return to SARS on eFiling
Penalties for non-compliance
Late payment: 10% plus interest
Meeting the deadlines outlined for these payments is crucial in avoiding hefty penalties. A late first or second provisional payment attracts a penalty of 10% of the amount not paid, under paragraph 27 of the Fourth Schedule, and interest accrues on the outstanding amount at the SARS prescribed rate. The penalty applies even if the payment is one day late.
Underestimation: The 20% penalty
If your actual taxable income is more than R1 million, your second-period estimate must be at least 80% of it. Below that, the 20% penalty applies to the difference between the tax on 80% of your actual taxable income and the tax you actually paid.
If your actual taxable income is R1 million or less, your estimate must be at least 90% of it, or at least the basic amount. Meeting either one is enough — this is why the basic amount is worth knowing.
Where a late payment penalty has already been charged on the same underestimation, the 20% penalty is reduced by it.
How MMS Group handles your provisional tax
We establish whether you are a provisional taxpayer at all – some clients arrive registered when they need not be.
We calculate each period’s estimate against your actual figures and your basic amount, so the estimate is both accurate and defensible.
We prepare and submit your IRP6 returns on eFiling and confirm the payment reference and due date with you.
We reconcile your provisional payments against your final income tax assessment, so nothing is paid twice or left short.
Where penalties or interest have already been raised, we review whether there are grounds to request remission.
Talk to our tax team about your position – tell us your year-end and your income sources and we will tell you what is due and when.
SARS regularly outlines the importance of meeting payment deadlines and maintaining absolute accuracy when submitting provisional tax returns. Due to the hefty fines associated with non-compliance, it may be in your best interests to seek professional assistance to meet your tax return obligations.
Frequently asked questions about provisional tax
How is provisional tax calculated?
You estimate your taxable income for the full year of assessment, calculate the normal income tax on that estimate, and subtract any employees’ tax already withheld plus any allowable rebates and credits. For the first period you pay half of that figure; for the second period you pay the full-year amount less what you already paid. Your starting point for the estimate is usually the basic amount – the taxable income on your most recent assessment, increased by 8% a year if that assessment is more than 18 months old.
Who is a provisional taxpayer in South Africa?
You are a provisional taxpayer if you earn income that is not remuneration, such as rental income, freelance or consulting income, investment income or business profits, or if you receive a salary from an employer not registered for employees’ tax. All companies are provisional taxpayers. You are not one if you earn no business income and your taxable income stays below the annual tax threshold, or if your interest, dividends, rental and unregistered-employer income together come to R30 000 or less for the year.
When is provisional tax due?
For a February year-end, the first payment is due by 31 August, the second by the last business day of February, and the voluntary third payment by 30 September after year-end. Companies with other year-ends follow the same pattern relative to their own financial year.
What is an IRP6?
The IRP6 is the provisional tax return. You complete one for each provisional period, entering your estimated taxable income and the tax calculated on it, and submit it through SARS eFiling. An IRP6 is required for the first and second periods whether or not a payment is due. Failing to submit is treated as an estimate of nil, which triggers the underestimation penalty on your full liability.
How do I register for provisional tax on eFiling?
Log in to SARS eFiling, go to SARS Registered Details and select Maintain SARS Registered Details, then add provisional tax to your registered tax types. If you are not yet an eFiling user you register for the platform first. Once provisional tax is on your profile you can request an IRP6 return for the relevant period from your returns menu.
What happens if I pay provisional tax late?
A late first or second provisional payment attracts a penalty of 10% of the amount not paid, and interest accrues on the outstanding balance at the SARS prescribed rate. The penalty applies from the first day the payment is late, so being a day over the deadline costs the same as being a month over. If an underestimation penalty is also raised on the same period, it is reduced by the late payment penalty already charged.
What is the penalty for underestimating provisional tax?
It is 20% of the shortfall. If your actual taxable income exceeds R1 million, your second-period estimate must be at least 80% of it. If your actual taxable income is R1 million or less, your estimate must be at least 90% of it or at least the basic amount. Meeting either test is enough. The penalty is calculated on the difference between the tax on the required percentage and the tax you actually paid, and it does not vary with your tax bracket.
What is the difference between provisional tax and PAYE?
They are two ways of paying the same income tax. PAYE is deducted from your salary by your employer and paid over to SARS on your behalf during the year. Provisional tax is for income that has no employer withholding it, such as rental, freelance, investment or business income, so you estimate the tax yourself and pay it in advance in two or three instalments. Both are credited against your final income tax assessment, and many people pay both.
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