Taxes are money that people and businesses give to the government when they earn an income or buy things. The government collects these taxes to pay for important services that everyone uses, like schools, hospitals, roads and rubbish collection. These services make communities safer and help everyone have a better quality of life.
You probably can’t wait to earn a salary. But with a salary comes a nasty surprise: hello taxes!
Nobody likes paying taxes, but taxes are the main source of income for most countries, including South Africa. The government uses tax money to improve infrastructure, provide healthcare and fund education, among other things.
In return, taxpayers benefit from a functioning society. Whether you attend a government school or visit a state hospital, tax money helps keep these services running. Even private businesses rely on government-funded infrastructure, such as roads and electricity, to operate effectively.
And it’s the law, tax is a legal requirement set by the government.
When do you pay tax?
You are already paying taxes. Whenever you buy takeaways, clothes or a smartphone you pay value-added tax (VAT), which is already included in the price. This ensures that everyone contributes to government revenue.
Not everyone pays tax on their salary or income – you only pay income tax once you earn above a certain threshold set by the South African Revenue Service (SARS). As of 2024, if you earn more than R95 750 per year, you must pay personal income tax. If you earn less, you don’t have to pay tax.
How do you pay tax?
For most employees, tax is deducted directly from their salaries through a system called PAYE (Pay As You Earn). Your employer calculates how much tax you owe and sends it to SARS before you even receive your paycheck.
If you’re self-employed, run a small business, or earn extra income from side hustles, you must file your tax return yourself.
In both instances, you have to register as a taxpayer. SARS provides an online eFiling system, making it easier to submit your tax returns.
Unsure whether you must register for tax?
- Do you earn more than the tax threshold – in 2025 the threshold is R95 750 per year (around R7 979 per month).
- Do you earn more than R500 000 per year from one employer?
- Do you earn less than R500 000 but receive extra income from a rental property, side hustle, or make taxable capital gains (from other investments)?
- Do you have multiple sources of income (like a side business, freelance work, investments or a rental)?
- Do you want to claim deductions (e.g., medical aid, retirement contributions, travel allowance)?
If you answer YES to any of these questions you may have to register for tax. You can register here.
Tax can become very complicated. This article only serves as a general guide for school leavers and young professionals and does not constitute tax advice. Always confirm your tax obligations with SARS or a tax practitioner.
Further reading
Coming soon
Sources
Smartaboutmoney: Do I need to file a tax return?
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