PAYE Calculator Guide: How to Calculate Your Salary Tax

Understanding PAYE deductions is essential for financial planning. This guide explains PAYE calculations, how it works, and how to calculate take-home salary.

Use our calculator: SA Tax Calculator

What Is PAYE?

PAYE (Pay As You Earn) is tax deducted monthly from your salary by your employer and paid to SARS.

Key Points:

Monthly prepayment of annual tax
Employer deducts and submits
Based on annual tax tables
Reconciled with annual return
Appears on monthly payslip

2025 Tax Brackets: R237,100 (18%), R370,500 (26%), R512,800 (31%), R673,000 (36%), R857,900 (39%), R1,817,000 (41%), Above (45%)

Monthly Rebate: R1,436 (under 65), R2,223 (65-75), R2,485 (75+)

How to Calculate PAYE Manually

Step 1: Annualize salary (monthly × 12)
Step 2: Subtract deductions (retirement, medical aid)
Step 3: Apply tax tables
Step 4: Subtract rebate
Step 5: Divide by 12

Example: R40,000/month salary

Annual: R480,000
Deductions: R93,600
Taxable: R386,400
Tax before rebate: R80,978
Less rebate: R17,235
Annual tax: R63,743
Monthly PAYE: R5,312
Take-home: R34,688

Using PAYE Calculators

Best Calculator: Genius Insights SA Tax Calculator

Inputs:

Monthly/annual salary
Retirement contributions
Medical aid
Age bracket

Outputs:

Monthly PAYE
Annual tax
Take-home pay
Effective rate
Tax breakdown

Common PAYE Scenarios

Entry Level (R15,000/month): PAYE R994, Take-home R14,006
Mid-Career (R40,000/month): PAYE R5,312, Take-home R34,688
Senior (R80,000/month): PAYE R21,274, Take-home R58,726
Executive (R150,000/month): PAYE R38,659, Take-home R111,341

Maximizing Take-Home Pay

1. Retirement Contributions: 27.5% of gross (max R350k) - reduces taxable income
2. Medical Aid Credits: R347/month per member
3. Claim Deductions: RA, travel, home office
4. Structure Benefits: Pre-tax better than cash

Example Impact:

Salary R50,000/month
Increase retirement 10% → 15%
Additional contribution: R2,500/month
Tax saved (31% bracket): R775/month
Net cost: R1,725 for R2,500 retirement saving

Understanding Your Payslip

Income: Basic + Allowances + Overtime + Bonuses = Gross
Deductions: PAYE + UIF (1%, max R177) + Pension + Medical = Total Deductions
Net Pay: Gross - Deductions = Take-home

Common Allowances: Housing, travel, cellphone, car
Taxable vs Non-Taxable: Most allowances taxable; some have partial exemptions

Understanding PAYE empowers you to optimize take-home pay legally. Use calculators to model scenarios and maximize retirement contributions for tax benefits.

Key Takeaways:

PAYE is monthly tax prepayment
Primary rebate R1,436/month
Retirement contributions reduce tax effectively
Bonuses taxed at marginal rate
File annual return for refunds

Calculate now: SA Tax Calculator

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