SARS Provisional Tax Guide 2025: Complete Guide for Self-Employed

Provisional tax is a pay-as-you-earn system for taxpayers who don't have PAYE deducted by an employer. If you're self-employed, a freelancer, contractor, or earn rental income, understanding provisional tax is essential to avoid penalties, interest charges, and cash flow problems.

This comprehensive guide explains everything you need to know about SARS provisional tax in 2025, including who must register, how to calculate payments, filing requirements, and strategies to minimize your tax burden legally.

What is Provisional Tax?

Definition and Purpose

Provisional Tax is an advance payment of income tax for taxpayers who earn income that isn't subject to PAYE (Pay-As-You-Earn) deductions.

Purpose:

• Spreads your annual tax over two payments during the year

• Prevents large tax bills at year-end

• Ensures SARS receives tax revenue throughout the year

• Reduces risk of cash flow problems for taxpayers

How It Works:

1. You estimate your annual taxable income

2. Calculate estimated tax liability

3. Make two provisional payments during the year

4. Submit annual return reconciling actual vs estimated

5. Pay additional tax or receive refund

Who Must Register as Provisional Taxpayer?

Mandatory Registration:

You must register for provisional tax if:

• You're self-employed (sole proprietor, freelancer, consultant)

• You're an independent contractor

• You earn rental income exceeding R30,000 annually

• You earn commission or variable income not subject to PAYE

• You're a company director earning director's fees

• You have foreign income

• You earn investment income exceeding R30,000 (interest, dividends)

• Your taxable income exceeds R1 million (regardless of source)

Common Professions:

• Freelance designers, developers, writers

• Consultants and contractors

• Uber/Bolt drivers

• Airbnb hosts (rental income)

• Small business owners

• Medical practitioners in private practice

• Lawyers in private practice

• Real estate agents

• Commission-only salespeople

Exceptions - You Don't Need Provisional Tax If:

• Your only income is salary with PAYE deducted

• You're under 65 and taxable income under R30,000

• You're 65+ and taxable income under R47,000

• Your income is from interest/dividends under R30,000

Benefits of Provisional Tax

For Taxpayers:

• ✅ Spreads tax over the year (better cash flow)

• ✅ No large year-end tax bill surprise

• ✅ Forces regular financial review

• ✅ Encourages tax planning

For SARS:

• ✅ Consistent revenue throughout year

• ✅ Reduces year-end collection burden

• ✅ Lower default risk

Provisional Tax Deadlines 2025/2026

Critical Dates

First Provisional Payment (IRP6):

• Due Date: August 31, 2025

• Period Covered: March 1, 2024 - February 28, 2025

• Based On: Estimated taxable income for full tax year

Second Provisional Payment (IRP6):

• Due Date: February 28, 2026

• Period Covered: March 1, 2024 - February 28, 2025

• Based On: Revised estimate of actual taxable income

Annual Income Tax Return (ITR12):

• Due Date: January 23, 2027 (provisional taxpayers)

• Reconciliation: Actual income vs provisional estimates

• Result: Additional tax or refund

Third Provisional Payment (Voluntary):

• Due Date: September 30, 2026 (6 months after tax year-end)

• Purpose: Avoid underestimation penalties

• **Optional but recommended if you significantly underestimated

Consequences of Missing Deadlines

Late Payment - First Provisional:

• Penalty: 10% of tax shortfall

• Interest: ~8% p.a. from due date

• Example: R50,000 due, paid 2 months late = R5,000 penalty + ~R660 interest

Late Payment - Second Provisional:

• Same penalties apply

• Underestimation penalty if estimate was too low (see below)

Late Annual Return:

• Administrative penalty: R250/month

• 10% understatement penalty

• Interest on unpaid tax

• Can lead to estimated assessments by SARS

Criminal Charges:

• Persistent non-compliance can lead to prosecution

• Fines and potential imprisonment

• Reserved for serious tax evasion cases

How to Register for Provisional Tax

Step 1: Register on SARS eFiling

If you're not already registered:

• See our complete guide: SARS eFiling Registration

• Process takes 10-15 minutes

• Requires: ID, tax number, banking details

Step 2: Register for Provisional Tax

Via SARS eFiling:

1. Log in to eFiling

2. Navigate to: Home > Tax Types

3. Click "Register" next to "Provisional Tax"

4. Complete registration form:

   • Reason for registration (self-employed, rental income, etc.)
   • Expected annual income
   • Business details (if applicable)

5. Submit registration

Processing Time:

• Approval: 3-7 business days

• Notification via email and SMS

• Status visible on eFiling: Tax Types section

At SARS Branch:

• Visit with ID and proof of income

• Complete registration form

• Less convenient but available if eFiling issues

Step 3: Verify Registration

Check eFiling:

• Home > Tax Types

• "Provisional Tax" shows: Status: Active

• Provisional tax reference number displayed

You're Now Registered:

• Can file provisional returns

• Obligated to make provisional payments

• Subject to provisional tax rules and penalties

Calculating Your Provisional Tax

Basic Calculation Formula

Step-by-Step Calculation:

Step 1: Estimate Annual Taxable Income

• Gross income for full tax year

• Less: Allowable deductions (retirement, travel, home office)

• = Estimated taxable income

Step 2: Calculate Tax on Taxable Income

• Apply SA tax brackets (18% - 45%)

• See our Income Tax Calculator

Step 3: Subtract Tax Rebates

• Primary rebate: R17,235

• Secondary rebate (65+): R9,444

• Tertiary rebate (75+): R3,145

Step 4: Subtract Medical Aid Credits (if applicable)

• Main member: R364/month × 12 = R4,368

• Dependents: R364 + (R246 × additional) × 12

Step 5: Calculate Provisional Payment

• First provisional: 50% of estimated tax

• Second provisional: 100% of estimated tax less first payment

Practical Example 1: Freelance Consultant

Scenario:

• Annual income (freelancing): R600,000

• Allowable deductions:

  • Retirement annuity: R80,000
  • Home office: R15,000
  • Business expenses: R40,000

• Taxable income: R600,000 - R135,000 = R465,000

Tax Calculation:
Using 2025/2026 tax brackets:

• R0 - R237,100 @ 18% = R42,678

• R237,101 - R370,500 @ 26% = R34,684

• R370,501 - R465,000 @ 31% = R29,295

• Gross tax: R106,657

Less Rebates:

• Primary rebate: -R17,235

• Tax after rebates: R89,422

Provisional Payments:

• First provisional (Aug 31): R89,422 × 50% = R44,711

• Second provisional (Feb 28): R89,422 - R44,711 = R44,711

Practical Example 2: Rental Income

Scenario:

• Salary (PAYE paid): R400,000 (tax: R65,000 already paid)

• Rental income: R180,000

• Rental expenses: R60,000

• Net rental income: R120,000

Taxable Income:

• Salary: R400,000

• Rental: R120,000

• Total: R520,000

Tax on R520,000:

• Apply tax brackets (use calculator)

• Total tax: ~R128,000

Less:

• PAYE already paid: -R65,000

• Primary rebate: -R17,235 (already in PAYE calc)

Additional Tax Due (from rental):

• ~R63,000 (approximate)

Provisional Payments:

• First provisional: R31,500

• Second provisional: R31,500

Note: This is additional to your PAYE. You'll pay provisional on rental income portion.

Calculation Methods

Method 1: Basic Amount

• Use estimated taxable income

• Calculate tax manually or with calculator

• Most common for straightforward income

Method 2: Prior Year Method

• Use previous year's actual assessment

• Safe harbor: If estimate is within 90% of final, no penalty

• Good if income consistent year-to-year

Method 3: Current Year Actual

• Requires accurate mid-year financials

• Use for second provisional (more accurate)

• Best for variable income

Which Method to Use?

First Provisional (August):

• Prior year method (safest)

• Or conservative current year estimate

• Better to overestimate than underestimate

Second Provisional (February):

• Current year actual (most accurate)

• You have 11 months of actual data

• Refine estimate with real numbers

Filing Provisional Tax Returns (IRP6)

Step-by-Step: First Provisional Return

Deadline: August 31, 2025

Via SARS eFiling:

Step 1: Access IRP6 Form

1. Log into eFiling

2. Returns > File Return

3. Select: "Provisional Tax (IRP6)"

4. Choose tax year: 2025 (March 2024 - Feb 2025)

5. Click "Start" or "Continue" if saved

Step 2: Return Type

• Select: "First Provisional"

• Confirm taxpayer details

• Click "Next"

Step 3: Income Estimation

Gross Income:

• Enter estimated total income for full year

• Include: Business income, rental, investment income, foreign income

• Exclude: PAYE salary (if you have both, include both)

Example:

• Freelance income: R600,000

• Enter: R600,000

Step 4: Allowable Deductions

Retirement Contributions:

• Enter estimated RA/pension contributions

• Max: 27.5% of income or R350,000

Medical Expenses:

• Medical aid contributions

• Additional out-of-pocket expenses

Business Expenses:

• Home office

• Travel (business km)

• Business costs

Other Deductions:

• Donations (max 10% of income)

• Any other allowable deductions

System Calculates:

• Taxable income (gross minus deductions)

Step 5: Tax Calculation

System Auto-Calculates:

• Tax on taxable income

• Less: Tax rebates (based on age)

• Less: Medical aid credits

• = Estimated annual tax

First Provisional Amount:

• System shows: 50% of estimated annual tax

• This is your payment due

Step 6: Previous Payments

If applicable, enter:

• PAYE paid year-to-date (if you have salary too)

• Foreign tax credits

• Any other tax paid

System Adjusts:

• Payment due = Estimated tax - Credits

Step 7: Review and Submit

Review Summary:

• ✓ Estimated income

• ✓ Deductions

• ✓ Taxable income

• ✓ Tax calculated

• ✓ Payment due

Declaration:

• Check: "I declare this information is true and correct"

• Click: "Submit"

Confirmation:

• Submission reference number

• Payment amount due

• Payment due date (Aug 31)

• Download PDF copy

Step 8: Make Payment

Critical: Submission doesn't equal payment!

Payment Options:

Option 1: eFiling Payment (Fastest)

1. Home > Payments > Make Payment

2. Select: Provisional Tax

3. Enter amount (as per IRP6)

4. Reference: Your tax number

5. Pay via EFT or card

6. Save payment confirmation

Option 2: Bank EFT

• SARS Banking Details:

  • Bank: Standard Bank
  • Account: Various (check SARS website)
  • Branch: 051001
  • Reference: Your tax reference number

• Allow 2-3 days for processing

Option 3: Bank Branch

• SARS deposit slip

• Pay at any bank

• Get stamped receipt

Payment Deadline: August 31, 2025 (same as submission deadline)

Step-by-Step: Second Provisional Return

Deadline: February 28, 2026

Process Similar to First, But:

Key Differences:

1. More Accurate Estimate

• You have 11 months of actual data

• Use real income figures (not estimates)

• Adjust deductions based on actuals

2. Calculation Method

• Option A: Revised estimate of full year

• Option B: 80% of actual income/tax to date

3. Payment Amount

• Total annual tax (100%)

• Less: First provisional paid

• = Second provisional due

Example:

• Revised estimated tax: R100,000

• First provisional paid: R45,000

• Second provisional due: R55,000

4. Safe Harbor Rules

• If second provisional ≥ 90% of actual tax, no penalty

• Use conservative estimate to avoid underestimation

Filing Steps: Same as first provisional, but select "Second Provisional" as return type.

Voluntary Third Provisional Payment

Deadline: September 30, 2026 (6 months after tax year-end)

Purpose:

• Make up for underestimation

• Avoid or reduce underestimation penalty

When to Use:

• Income was significantly higher than estimated

• Large unexpected income received

• Want to avoid penalty and interest

How to File:

1. eFiling > Returns > File IRP6

2. Select: "Third Voluntary Provisional"

3. Calculate shortfall

4. Submit and pay

Benefit: If you top-up via third provisional, penalties may be waived or reduced.

Penalties and Interest

Underestimation Penalty

Triggered When:
Your estimated tax (second provisional) is less than 80% of actual tax

Calculation:

• 20% of difference between:
  • Tax actually payable (from annual assessment)
  • Tax estimated (second provisional)

Example:

• Actual tax (annual return): R120,000

• Second provisional estimate: R80,000

• 80% threshold: R120,000 × 80% = R96,000

• Your estimate (R80,000) < threshold (R96,000)

• Underestimation: R96,000 - R80,000 = R16,000

• Penalty: R16,000 × 20% = R3,200

How to Avoid:

• Estimate conservatively (rather overestimate)

• File third voluntary provisional if needed

• Use safe harbor: Estimate ≥ prior year actual tax

Late Payment Interest

Applied When:
Provisional payment made after deadline

Rate: Approximately 7-8% per annum (variable, set by SARS)

Calculation:

• Interest charged from due date to payment date

• Compounded monthly

Example:

• Payment due: R50,000

• Due date: August 31

• Paid: November 30 (3 months late)

• Interest: R50,000 × 8% × 3/12 = ~R1,000

Late Submission Penalty

Administrative Penalty:

• R250 per month for late IRP6 submission

• Even if no tax due

• Continues until submitted

Understatement Penalty:

• 10% of tax shortfall

• Applies if SARS estimates your tax (you didn't file)

Combined Impact:
Late submission + late payment = penalties + interest = expensive!

Best Practice: File and pay on time, even if estimate is approximate.

Strategies to Minimize Provisional Tax

1. Maximize Allowable Deductions

Retirement Contributions:

• Contribute to RA (27.5% of income deductible)

• R100,000 contribution = R36,000-R45,000 tax saving

• Reduces provisional tax immediately

Business Expenses:

• Claim all legitimate expenses

• Home office (actual cost method)

• Business travel (keep logbook)

• Equipment depreciation

See Full List: SA Tax Deductions Guide

2. Accurate Income Estimation

Don't Overestimate:

• Paying excess provisional = interest-free loan to SARS

• Refund takes 3-6 weeks after annual return

Don't Underestimate:

• Penalties and interest

• Cash flow problem at year-end

Sweet Spot:

• Estimate within 90-100% of actual

• Slightly overestimate if uncertain

3. Cash Flow Management

Set Aside Funds:

• Open separate tax savings account

• Deposit 30-35% of income monthly

• Have funds ready for provisional deadlines

Quarterly Review:

• Review income/expenses every 3 months

• Adjust estimate for second provisional

• Consider voluntary third if needed

4. Use Prior Year Safe Harbor

If income consistent:

• First provisional: Use prior year actual tax

• No penalty if income doesn't increase significantly

• Safe, conservative approach

When to Use:

• Similar income year-on-year

• Predictable business

• Don't want to track mid-year estimates

5. Strategic Timing of Income/Expenses

Defer Income (if possible):

• Invoice clients in March (next tax year) instead of February

• Reduces current year taxable income

• Legal and common practice

Accelerate Deductions:

• Pay RA contributions before Feb 28

• Incur deductible expenses before year-end

• Purchase business equipment before Feb 28

Important: Must be genuine transactions, not artificial arrangements.

Managing Cash Flow as Provisional Taxpayer

The Cash Flow Challenge

Unlike Employees:

• No employer withholds tax

• You receive full income

• Must set aside for tax yourself

• Easy to overspend and face tax shortfall

Consequences of Poor Cash Flow:

• Can't pay provisional tax on time

• Penalties and interest

• Stress and financial pressure

• Potential debt to SARS

Cash Flow Best Practices

1. Set Aside 30-35% Immediately

Simple Rule:

• Every time you receive payment

• Immediately transfer 30-35% to tax savings account

• Don't touch it until tax due

Why 30-35%?

• Covers tax (18-45% on taxable income)

• Covers deductions reducing taxable income

• Buffer for safety

2. Use Separate Tax Savings Account

Setup:

• Open dedicated savings account

• Name it "Tax Savings"

• No debit card (reduces temptation to spend)

Automate:

• Set up automatic transfer after client payments

• Treat it like PAYE (non-negotiable)

3. Track Income and Expenses Rigorously

Use Accounting Software:

• Xero, QuickBooks, Wave (free)

• Track every invoice and expense

• Generate reports easily

Monthly Review:

• Review profit/loss monthly

• Recalculate estimated tax

• Adjust savings rate if needed

4. Build an Emergency Buffer

Tax Buffer:

• Save extra 5-10% beyond estimate

• Protects against income surges

• Covers underestimation if needed

Business Buffer:

• Separate from tax savings

• 3-6 months expenses

• Covers slow business periods

5. Plan for Provisional Deadlines

Calendar Reminders:

• First provisional: August 31

• Second provisional: February 28

• Set reminders 2 weeks before

Pre-Deadline Check:

• 2 weeks before: Verify savings account balance

• Ensure sufficient funds

• Arrange payment method

Special Scenarios

Scenario 1: Variable Income (High Months, Low Months)

Challenge:

• Some months high income, others low

• Difficult to estimate annual income mid-year

Strategy:

• First provisional: Estimate conservatively based on average

• Second provisional: Use 11 months actual data

• Consider using prior year safe harbor method

Example:

• Good months: R100,000/month (x6 months)

• Slow months: R20,000/month (x6 months)

• Annual: R720,000

• First provisional estimate: R600,000 (conservative)

• Second provisional: R720,000 (actual data)

Scenario 2: Side Hustle Alongside Salary

Challenge:

• Salary (PAYE paid)

• Side business income (no PAYE)

Provisional Tax:

• Only on side business income

• PAYE from salary credited against total tax

Calculation:

• Total income: Salary + Side business

• Calculate total tax

• Less: PAYE paid via employer

• = Additional tax on side business

• Provisional payments cover additional tax

Example:

• Salary: R400,000 (PAYE: R65,000)

• Side business: R150,000

• Total taxable: R550,000

• Total tax: R140,000

• Less PAYE: -R65,000

• Provisional tax due: R75,000

• First: R37,500, Second: R37,500

Scenario 3: First Year Self-Employed

Challenge:

• No prior year to base estimate on

• Uncertain income

Strategy:

• Register for provisional tax immediately

• Estimate conservatively (better to overestimate)

• Use worst-case scenario

• Second provisional: Refine with actual data

• Consider quarterly reviews

First Year Tips:

• Set aside 35-40% (higher buffer)

• Track every rand meticulously

• Consider tax practitioner assistance

• File third voluntary if needed

Scenario 4: Rental Income Only

If rental is your only income:

Register for Provisional Tax:

• Required if net rental > R30,000

Calculation:

• Gross rental income

• Less: Bond interest, rates, insurance, repairs, depreciation

• = Net rental income (taxable)

Deductions:

• All rental-related expenses

• Depreciation on property (2% p.a. on building, not land)

• Travel to/from property (for inspections, maintenance)

Example:

• Gross rental: R180,000

• Expenses: R60,000

• Net rental: R120,000

• Estimated tax: ~R20,000

• First provisional: R10,000

• Second: R10,000

Troubleshooting Common Issues

Issue: Missed First Provisional Deadline

Problem: It's September, you missed August 31

Solution:

1. File IRP6 immediately (even though late)

2. Pay provisional tax ASAP

3. Penalties will apply but minimize by acting quickly

4. Don't skip - file and pay late is better than not at all

Penalties You'll Face:

• 10% penalty on amount

• Interest from Aug 31 to payment date

Issue: Can't Afford Provisional Payment

Problem: Don't have funds to pay on deadline

Options:

1. Pay What You Can

• Better to pay partial than nothing

• Reduces penalty and interest

2. Request Payment Arrangement

• eFiling: Work Online > Request > Payment Arrangement

• Propose installment plan

• SARS may approve (interest still applies)

3. Third Provisional

• Pay balance via third voluntary (Sept 30)

• May reduce penalties

Prevention:

• Better cash flow management

• Set aside funds from day one

Issue: Income Significantly Different Than Estimated

Problem: Second provisional estimate was way off

Solution:

1. File third voluntary provisional (by Sept 30)

2. Pay shortfall via third provisional

3. Minimizes underestimation penalty

4. Better late than never

Example:

• Second provisional estimate: R80,000

• Actual tax (annual return): R120,000

• File third voluntary: R40,000 shortfall

• Reduces 20% underestimation penalty

Issue: eFiling Won't Accept IRP6 Submission

Common Causes:

1. Not Registered for Provisional Tax

• Check: Tax Types > Provisional Tax status

• Register if not active

2. Wrong Tax Year Selected

• Verify correct tax year

• First provisional: Upcoming year-end

• Second provisional: Current tax year

3. Validation Errors

• Read error messages carefully

• Common: Missing fields, incorrect amounts

4. Browser Issues

• Clear cache, try different browser

• Use Chrome or Firefox

• Disable pop-up blocker

Solution:

• Contact SARS: 0800 00 7277

• Visit SARS branch if persists

Issue: Penalty Notice Received

Problem: SARS issued penalty for underestimation

Options:

1. Pay if Legitimate

• If you did underestimate, penalty is valid

• Pay to avoid further interest

2. Request Remission (Penalty Reduction)

• If first offense or good reason

• eFiling: Request > Penalty Remission

• Explain circumstances

• SARS may reduce or waive (discretion)

3. Object if Incorrect

• If penalty is wrong, object

• 30 days to file objection

• Provide supporting documents

4. Pay Under Protest

• Pay penalty to stop interest

• File objection simultaneously

• Refunded if objection succeeds

Annual Reconciliation

What Happens at Year-End

After Tax Year Ends (Feb 28):

You Must:

1. File annual income tax return (ITR12)

2. Deadline: January following tax year

3. Declare actual income and expenses

4. Reconcile provisional payments

SARS Will:

1. Calculate actual tax owed

2. Compare to provisional tax paid

3. Issue assessment:

   • Refund if overpaid
   • Additional tax if underpaid

Example Reconciliation

Provisional Payments Made:

• First: R45,000 (Aug)

• Second: R45,000 (Feb)

• Total Provisional: R90,000

Annual Return Assessment:

• Actual taxable income: R485,000

• Actual tax calculated: R95,000

Reconciliation:

• Tax owed: R95,000

• Paid: R90,000

• Balance due: R5,000

• Must pay within 14 days of assessment

Alternative Scenario:

• Tax owed: R85,000

• Paid: R90,000

• Refund due: R5,000

• Refunded within 21 days

Penalties on Final Assessment

If Underestimation Penalty Applies:

• Second provisional < 80% of actual

• Penalty calculated and added to assessment

• Must pay with balance due

If No Penalties:

• Provisional ≥ 90% of actual

• Or third voluntary paid

• Clean assessment, just balance due or refund

Getting Help

SARS Contact Channels

1. SARS eFiling Help

• In eFiling: Help > Provisional Tax Guides

• Video tutorials available

2. SARS Contact Centre

• Phone: 0800 00 7277

• Hours: Mon-Fri, 8am-4pm

• Ask for Provisional Tax Department

3. SARS Branch

• Book appointment via eFiling

• Bring: ID, tax reference, IRP6 documents

4. Email

• Email: contact@sars.gov.za

• Response: 3-5 days

5. Tax Practitioner

• Consider hiring for:
  • Complex income sources
  • Multiple business entities
  • First year self-employed
  • If you've fallen behind

Practitioner Services:

• Calculate provisional tax

• File IRP6 returns

• Strategic tax planning

• Represent you with SARS

Costs:

• R500-R1,500 per provisional return

• Often worth it for peace of mind

Conclusion

Provisional tax is a critical responsibility for self-employed taxpayers in South Africa. While it may seem complex initially, understanding the system, meeting deadlines, and maintaining good cash flow practices makes it manageable.

Key Takeaways:

✅ Register immediately when starting self-employment

✅ Set aside 30-35% of all income for tax

✅ File on time: August 31 (first) and February 28 (second)

✅ Estimate conservatively to avoid penalties

✅ Pay on time to avoid interest charges

✅ Keep meticulous records of income and expenses

✅ Use our calculator: Income Tax Calculator

Next Steps:

• Register for provisional tax on eFiling

• Set up dedicated tax savings account

• Calendar provisional deadlines

• Learn about: How to Submit Tax Returns

• Understand: Tax Deductions for Self-Employed

With proper planning and discipline, provisional tax becomes a routine part of your self-employment journey. Stay compliant, avoid penalties, and enjoy the freedom of working for yourself!

Need Help? Call SARS: 0800 00 7277 or consult a registered tax practitioner.