What Is the First Provisional Tax Payment?
Your first provisional tax payment (Period 1) is due at the end of August each year. It covers the first six months of the tax year and is based on your estimated taxable income for the full year.
SARS does not tell you what to pay — you estimate it yourself using IRP6.
What Income to Include
You must include all taxable income you expect to earn during the year:
- Freelance and consulting fees
- Contract income
- Rental income
- Interest income above the exemption threshold
- Any other income not subject to PAYE
Do not include income already taxed at source by an employer (PAYE), as your employer handles that portion separately.
How to Estimate Your Taxable Income
The safest approach is to use the previous year's taxable income as your base estimate. SARS accepts this without penalty for Period 1.
If your income has grown significantly, adjust upward. If it has dropped, you may estimate lower but keep documentation to support your estimate.
Calculating the Tax
Once you have your estimated taxable income, apply the current SARS tax tables to calculate the gross tax liability. Then subtract:
- Primary rebate (available to all individuals)
- Medical tax credits (if applicable)
- Any PAYE already deducted by an employer
The result is your estimated tax for the year. Divide by two for the Period 1 payment.
The s11F Deduction
Before calculating your tax, subtract any retirement annuity or pension contributions you plan to make. This is the s11F deduction — up to 27.5% of the greater of your remuneration or taxable income, capped at R350,000 per year.
This single deduction can significantly reduce your provisional tax liability.
Filing and Paying
Submit your IRP6 on SARS eFiling before the end of August. Pay the calculated amount at the same time. Late filing attracts a 20% penalty on the tax due.
Final Thoughts
Period 1 is your opportunity to set a realistic baseline for the year. A conservative, well-documented estimate protects you from penalties and gives you a clear picture of your cash flow obligations.