Budget 2026 brought several changes that individuals and small businesses should check before filing, calculating payroll, or registering for VAT. Using old tables from a prior year is a common filing error - the numbers below are a summary only; always verify the current figures directly with SARS.
Personal income tax changes
For the 2026/27 year of assessment, SARS adjusted individual tax brackets by 3.4% to partially account for inflation. Rebates and tax-free thresholds were also updated. The table below summarises the key figures - verify current figures at the SARS rates of tax for individuals page before using them for calculations.
| Item | 2026/27 SARS figure |
|---|---|
| Primary rebate | R17 820 |
| Secondary rebate (age 65 to 74) | R9 765 |
| Tertiary rebate (age 75 and older) | R3 249 |
| Tax-free threshold (under 65) | R99 000 |
| Tax-free threshold (age 65 to 74) | R153 250 |
| Tax-free threshold (age 75 and older) | R171 300 |
These figures come from SARS’s Budget 2026 guidance, published in conjunction with the National Treasury 2026 Budget. Check the SARS rates of tax for individuals page for the complete bracket tables before calculating PAYE, provisional tax, or estimates.
VAT threshold changes
From 1 April 2026, the VAT registration thresholds changed (source: SARS Register for VAT):
- Compulsory registration: taxable supplies exceeding R2.3 million in any 12-month period (up from R1 million).
- Voluntary registration: taxable supplies exceeding R120 000 in any 12-month period.
These are headline figures subject to the detailed rules and exceptions in the VAT Act. If your business is near a threshold, review the full rules or get professional advice before registering or deregistering. The threshold change was one of the more significant Budget 2026 announcements for small businesses, substantially reducing the number of businesses required to register for VAT.
Turnover tax changes
Budget 2026 also updated the turnover tax regime for qualifying micro businesses, including an increased turnover limit and revised tax bands. Businesses should compare the turnover tax cost against normal income tax and VAT obligations before choosing or continuing in the regime. See the SARS turnover tax page for current thresholds and how to register or deregister.
What to update before filing
If you use any of the following, check them against current SARS figures:
- Payroll and PAYE calculation spreadsheets or software.
- Provisional tax estimate templates and IRP6 working papers.
- VAT registration decision notes and annual taxable supply projections.
- Small business turnover tax comparison models.
- Any income tax planning examples or calculators using 2024/25 or earlier figures.
Key points
- Tax brackets were adjusted by 3.4% for 2026/27 - all prior-year calculations need updating.
- The VAT compulsory registration threshold increased significantly to R2.3 million from 1 April 2026.
- Turnover tax bands also changed - compare against normal tax before applying.
- Always use the SARS source page for the exact current year figures before filing or calculating.
Frequently Asked Questions
What is the tax-free threshold for individuals under 65 for the 2026/27 tax year?
The tax-free threshold for individuals under 65 is R99 000 for the 2026/27 year of assessment. Taxpayers aged 65 to 74 have a higher threshold of R153 250, and those aged 75 and older have a threshold of R171 300. Always verify these figures directly on the SARS tax rates page before calculating.
Why did the VAT registration threshold increase in 2026?
Budget 2026 raised the compulsory VAT registration threshold from R1 million to R2.3 million in taxable supplies over any 12-month period, effective from 1 April 2026. The government indicated this was intended to reduce compliance burdens on smaller businesses and allow them to grow before facing VAT obligations.
Do I need to update my payroll software after Budget 2026?
Yes. Tax brackets were adjusted by 3.4% for the 2026/27 year, and rebate amounts changed. Any payroll or PAYE calculation tool based on prior-year tables will produce incorrect results until updated to the new figures. Check payroll software, spreadsheets, and provisional tax estimate templates against the current SARS tables.
What changed for turnover tax in 2026?
Budget 2026 updated the turnover tax regime for qualifying micro businesses, including an increased turnover limit and revised tax bands. Businesses currently in the regime or considering it should compare the updated turnover tax cost against normal income tax and VAT obligations before continuing or registering.
Sources
- SARS: Rates of Tax for Individuals - current rebates, thresholds, and personal income tax tables.
- SARS: Register for VAT - VAT registration thresholds and current requirements.
- SARS: Turnover Tax - current turnover tax eligibility and rates.
- SARS: Budget - SARS Budget 2026 source hub.
- National Treasury: Budget Documents - official national budget documents.
Related guides
- VAT Registration Threshold 2026: South Africa’s New R2.3 Million Limit
- Small Business Corporation Tax in South Africa: The SBC Rate Explained
- Turnover Tax in South Africa: A Guide for Small Businesses
- Personal Tax Planning in South Africa: Legal Ways to Reduce Your Tax
Budget changes may still be subject to legislative and administrative confirmation. Verify the current SARS position at sars.gov.za/about/sars-tax-and-customs-system/budget/ before acting on any of the figures above.