Income Tax made simple: 2025/26 Brackets Explained

Tax season is around the corner. If you earn an income in South Africa, you need to understand how tax brackets work — especially the updates for the 2025/2026 tax year.

Here’s what you need to know.

What Is a Tax Bracket?

A tax bracket is a set range of income taxed at a specific rate. As your income increases, only the portion that falls into a higher bracket is taxed at the higher rate. Your entire income is not taxed at that rate.

This system is called progressive taxation.

How Progressive Tax Works

South Africa’s tax system ensures you pay more tax only on the income that crosses into a higher bracket. Everyone pays:

• 18% on the first R237,100 of taxable income

• And then higher percentages only on income above each threshold

This means if you earn more, you still keep more — you never get “penalised” for moving into a new bracket.

Tax-Free Thresholds for 2025/2026

You only start paying tax once your annual income exceeds a certain threshold:

• R95,750 if you're under 65

• R148,217 if you're 65–74

• R165,689 if you're 75 or older

These amounts already include your primary rebate.

Income Tax Brackets and Rates (2025/2026)

If your income is above the tax-free threshold, the following brackets apply:

• Up to R237,100 – taxed at 18%

• R237,101 to R370,500 – taxed at 26%

• R370,501 to R512,800 – taxed at 31%

• R512,801 to R673,000 – taxed at 36%

• R673,001 to R857,900 – taxed at 39%

• R857,901 to R1,817,000 – taxed at 41%

• Above R1,817,000 – taxed at 45%

  
  

These figures are set by SARS for the tax year from 1 March 2025 to 28 February 2026.

What Happens If You Move Into a Higher Bracket?

If your salary increases, only the income above the new bracket threshold is taxed at the higher rate. Your take-home pay still increases — even though your total tax bill rises slightly.

This protects your income and ensures fairness in how tax is applied.

In Short

Tax brackets help determine how much you owe, but they don’t punish you for earning more. Understanding these brackets gives you better control over your financial planning.

For more updates on tax, finance, and compliance, keep an eye on next month’s post.