Who has to pay provisional tax in SA?

Anyone earning income that is not subject to PAYE — sole proprietors, freelancers, rental landlords, investors, and most directors of close corporations and small companies.

When are IRP6 payments due?

The first IRP6 (P1) is due by 31 August (mid-tax-year). The second (P2) is due by 28 February (year-end). An optional top-up (P3) can be made by 30 September after year-end.

How is the basic amount calculated?

SARS uses the prior year's assessed taxable income as the safe-harbour reference. Estimating below 90% of the basic amount on P2 triggers a 20% under-estimation penalty.

Can I be exempt from provisional tax?

Yes — if your only non-salary income is below the tax threshold, or you're over 65 with limited interest/rental income, you may not need to register.

Who has to pay provisional tax? · invoicebook.co.za

The core rule

SARS collects income tax throughout the year, not all at once at assessment. For employees, PAYE handles it — your employer deducts tax from each salary and pays it over monthly. For everyone else, provisional tax is how SARS gets paid: two estimated payments (31 August and the last day of February), plus an optional top-up by 30 September. The IRP6 calculator does the arithmetic.

Who's a provisional taxpayer

Paragraph 1 of the Fourth Schedule to the Income Tax Act defines it by exclusion — you're a provisional taxpayer unless you fit one of the narrow exemptions. In plain terms:

Freelancers, contractors, sole proprietors: yes. Any self-employment income means no PAYE at source, so provisional kicks in.
Rental-property owners: yes, if the rental income is meaningful (see the exemption thresholds below).
Companies: yes, every registered company. No exemptions.
Trusts: yes, every trust (other than a special trust with only PAYE-based beneficiary income).
Directors of companies who don't draw a salary through payroll: yes, if directors' fees or loan-account income accumulates.
Salaried employees with additional income: yes, if the "additional" income crosses the thresholds below.

When salaried employees become provisional taxpayers

If you earn a salary and have side income (freelance work, a rental unit, interest, dividends), you're a provisional taxpayer unless all your additional non-remuneration income stays under the exemption limits:

Under 65: exempt if taxable income from interest, foreign dividends, and rental combined stays below R30,000, AND you don't trade (no business income).
65 or older: more generous — exempt if your total taxable income doesn't exceed the tax threshold for your age band (roughly R153,250 for 65–74, R171,300 for 75+), and you earn no income from business activities.

Crossing either limit — one freelance invoice, one let-out room, one significant-enough dividend portfolio — and you're in the provisional net for that year. Registration is automatic once SARS sees the income on your ITR12; they'll expect IRP6 payments going forward.

What it actually means in practice

Being a provisional taxpayer means:

Two mandatory payments per year — 31 August (half of estimated annual tax) and end of February (the rest, based on a more complete year-end estimate).
An optional third "top-up" by 30 September to avoid interest on any shortfall revealed at assessment.
Longer filing window for your ITR12 (provisional taxpayers file later than non-provisional).
Exposure to a 20% underestimation penalty if your second-payment estimate is too low — the penalty rules differ above and below R1m in taxable income.

The underestimation penalty is the big one. Our IRP6 calculator shows the safe-harbour warnings based on your income and basic amount, so you see whether your estimate is below the line before you pay it.

If you only earn a salary

You're not a provisional taxpayer. Your employer's monthly PAYE is what SARS expects. Your annual ITR12 reconciles everything — usually resulting in a small refund or small top-up. No provisional payments, no IRP6.