Provisional tax lets SARS collect income tax during the year, instead of in one large amount after year-end. It applies to companies and to individuals who earn income not taxed through PAYE, such as business profits, rental income or freelance fees.
The three payments
For a taxpayer with a 28 February year-end, which covers most individuals:
| Payment | Due | Notes |
|---|---|---|
| First | 31 August | Based on half of your estimated taxable income for the year |
| Second | Last day of February | Based on your full-year estimate, less the first payment |
| Third (voluntary) | 30 September | A top-up payment to reduce interest if you underpaid |
Companies follow the same pattern based on their own financial year-end. The first payment is due six months into the year and the second at year-end.
The underestimation penalty
SARS can charge a 20% penalty if your second estimate is too low, in other words below 80% of your final taxable income (with specific rules depending on your income level). Late payments also attract penalties and interest.
How to estimate well
- Keep your books up to date monthly, so your estimate is based on real figures, not guesses.
- Review your estimate before the second payment, using management accounts.
- Use the voluntary third payment if the year ended better than expected.
- Keep your workings. SARS can ask how you arrived at your estimate.
This article is general information based on the law and SARS guidance as at 18 August 2026. It is not tax or legal advice for your specific situation. Please contact us before acting on it.
