South Africa · SARS 2027 tax year · See exactly what you keep after SARS deductions
SARS 2027 tax year · Marginal rate calculation
In South Africa, your bonus is added to your salary for the month it is paid and taxed at your marginal rate — the rate that applies to the top portion of your combined income. This means a large bonus can push you into a higher bracket for that month, though only the amount above each threshold gets taxed at the higher rate.
Many South Africans believe a 13th cheque is taxed differently to a performance bonus. It is not. Both are treated as income in the month they are received and taxed at your marginal rate. There is no special SARS exemption for 13th cheques — they are simply an extra month of salary for tax purposes.
The most effective way to reduce tax on a bonus is to ask your employer to contribute part or all of it directly to your retirement annuity (RA) or pension fund. Contributions are tax-deductible up to 27.5% of your taxable income (maximum R430,000 for the 2027 tax year). This can save thousands in PAYE.
If your bonus takes you close to a higher tax bracket, it may be worth asking your employer whether it can be paid in the next tax year (after 1 March). This resets your annual income calculation and could keep your combined bonus and salary in a lower bracket. Discuss this option with a tax professional.
No — but they are taxed the same way. A 13th cheque is a contractually agreed extra month of salary, usually paid in November or December. A performance bonus is discretionary. For SARS purposes, both are treated as income in the month they are received and taxed at your marginal rate.
It might — but only the portion above the bracket threshold gets taxed at the higher rate. If your annual salary is R350,000 and you receive a R50,000 bonus, only the R50,000 in the new bracket (R383,100 threshold) gets taxed at 31%. Your regular salary stays in its existing bracket.
You cannot avoid it entirely, but you can reduce it legally. Directing your bonus (or part of it) into a retirement annuity is the most effective strategy — contributions are tax-deductible up to 27.5% of income. This must be arranged with your employer before the bonus is paid.
Yes, UIF applies to all remuneration including bonuses. However, UIF contributions are capped at R17,712 per year (R1,476/month). If you have already reached the annual cap through your regular salary contributions, no additional UIF is deducted from your bonus.
Use our salary calculator for a full breakdown of your monthly PAYE and deductions.