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Pension & Provident Fund Calculator South Africa 2026

Project your pension, provident or retirement annuity fund growth with the 27.5% tax deduction, then see how the two-pot system and retirement lump sum tax tables affect what you actually take home.

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Pension & provident fund projection

Live estimate · 27.5% tax deduction · 2026

R

Your gross monthly pay before deductions

Max 27.5% of salary is tax deductible (capped at R350,000/year)

R

Your existing pension, provident or RA fund balance

Historical SA equity: ~10–12% long-term

Safe withdrawal rate so you don't outlive your money

Projected monthly pension

R96 651

at age 65, after 35 years

Projected fund value
R23 196 215
Monthly contribution
R5 250
Annual tax saving
R19 530
Net monthly cost
R3 623
Current fundR100 000
Total contributionsR2 205 000
Investment growthR20 891 215
Final fund valueR23 196 215

Contributing 15% of a R35 000 salary to your pension or provident fund grows it to about R23 196 215 by age 65, giving roughly R96 651 per month in retirement. It costs you about R3 623 a month after the R19 530/year tax saving.

Retirement fund tax benefits (South Africa)

  • Contributions up to 27.5% of income are tax deductible
  • Annual deduction capped at R350,000 per tax year
  • Growth inside the fund is free of income, dividends and CGT
  • First R550,000 of your retirement lump sum is tax-free (once-off)

Retirement fund types in SA

Pension fund

Employer-sponsored. At retirement you may take up to one-third as a lump sum; the remaining two-thirds must buy an annuity.

Provident fund

Similar to a pension fund. Contributions before 1 March 2021 (plus growth) can still be taken fully in cash; newer contributions follow the one-third rule.

Retirement annuity (RA)

A personal fund for the self-employed or extra savings. Same tax benefits, but you cannot access it before age 55.

Projections assume a constant contribution and return. Your actual outcome depends on markets, fees and the two-pot system. This is an independent estimate, not financial advice.

Pension fund tax benefits in South Africa

South Africa lets you deduct retirement fund contributions of up to 27.5% of income, capped at R350,000 per year. Your pension, provident or RA fund then grows free of income, dividends and capital gains tax until you retire.

27.5% tax deduction

Contributions are deductible up to 27.5% of income, capped at R350,000 per tax year.

Tax-free growth

Interest, dividends and capital growth inside the fund are not taxed.

R550,000 tax-free

The first R550,000 of your retirement lump sum is tax-free (a once-off cumulative amount).

Protected savings

Approved retirement funds are protected from creditors and insolvency.

Retirement fund options

Pension fund

Employer-sponsored. At retirement you may take up to one-third as a lump sum; the remaining two-thirds must buy an annuity.

Provident fund

Similar to a pension fund. Contributions made before 1 March 2021 (plus growth) can still be taken fully in cash; newer contributions follow the one-third rule.

Retirement annuity (RA)

A personal fund for the self-employed or extra savings. Same tax benefits, but you cannot access it before age 55.

How your payout is taxed

Retirement lump sums are taxed on a separate SARS table from your normal income. Retiring is taxed far more gently than cashing out early, so preserving or transferring your fund usually saves a great deal of tax.

Retiring (lump sum)

First R550,000 tax-free, then 18% to R770k, 27% to R1.155m, and 36% above. The two-thirds annuity income is taxed as normal income.

Withdrawing early

If you resign or are retrenched and cash out, only the first R27,500 is tax-free and the rest is taxed from 18% up to 36%.

Tax-free transfers

Moving funds to a preservation fund or RA as a fund-to-fund transfer triggers no tax — you only pay tax when you take cash.

Start early

Compounding rewards time: R1,000/month from age 25 grows to roughly three times what it would from age 35 at the same return.

Frequently asked questions

Quick answers to the most common questions.

How is a pension or provident fund payout taxed in South Africa?
Lump sums taken at retirement are taxed using the SARS retirement lump sum tax table, separate from your normal income tax. The first R550,000 is tax-free, the next portion to R770,000 is taxed at 18%, R770,001–R1,155,000 at 27%, and anything above R1,155,000 at 36%. The tax-free portions are a once-in-a-lifetime cumulative total across all your retirement funds, not per fund.
What is the one-third lump sum versus annuity rule?
At retirement from a pension fund or retirement annuity you may take up to one-third of the fund value as a cash lump sum; the remaining two-thirds must be used to buy a pension (annuity) that pays a regular income taxed as normal income. If the total fund value is R165,000 or less you may take the whole amount as cash. Provident fund contributions made before 1 March 2021 (plus growth) can still be taken fully in cash.
How much can I contribute tax-free to a pension fund?
You can deduct retirement fund contributions up to 27.5% of the greater of your taxable income or remuneration, capped at R350,000 per tax year. Contributions above the cap are not lost — they roll over and can reduce tax on a future lump sum or pension. Growth inside the fund is also free of income, dividends and capital gains tax.
Can I transfer my pension to another fund without paying tax?
Yes. Transfers between approved retirement funds — for example from a pension or provident fund to a preservation fund or retirement annuity — are tax-neutral if done correctly as a fund-to-fund transfer. You only trigger tax when you actually withdraw cash, so preserving and transferring rather than cashing out protects your savings.
Why is withdrawing before retirement taxed more heavily than retiring?
If you resign or are retrenched and cash out, the withdrawal lump sum tax table applies, where only the first R27,500 is tax-free and the rest is taxed from 18% up to 36%. The retirement table is far more generous (R550,000 tax-free), so preserving your fund until retirement — or transferring it to a preservation fund — usually saves a large amount of tax.

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