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5 Simple Ways to Pay Less Tax in South Africa

You can legally pay less tax in South Africa. You do not need to be rich or have an accountant. Here are 5 simple things anyone can do to reduce their tax bill.

Key Takeaways

  • A retirement annuity (RA) is the easiest way to save tax
  • Medical aid gives you tax credits every month
  • Donations to registered charities reduce your tax
  • Tax-free savings accounts grow without any tax
  • You do not need to be rich to use these strategies

1. Contribute to a Retirement Annuity (RA)

When you put money into an RA, SARS lets you deduct that amount from your taxable income. This means you pay tax on a smaller amount. You can deduct up to 27.5% of your salary, with a maximum of R350,000 per year.

  • Example: If you earn R30,000 and put R3,000 into an RA, you only pay tax on R27,000
  • This could save you R500 to R1,000+ per month depending on your salary
  • The money grows tax-free until you retire

2. Get medical aid tax credits

If you belong to a medical aid, you get a tax credit (a reduction in your tax). You do not need to do anything — your employer applies this automatically.

  • R364 per month for you (the main member)
  • R364 per month for your first dependant
  • R246 per month for each extra dependant
  • This is taken off your tax directly, not your income

3. Use a Tax-Free Savings Account (TFSA)

A TFSA lets you save up to R36,000 per year (R500,000 in your lifetime). All the interest and growth inside this account is completely tax-free. You never pay tax on it.

  • No tax on interest earned
  • No tax on dividends
  • No tax when you sell investments inside the TFSA
  • Available at most banks and investment platforms

4. Donate to registered charities

If you donate money to a charity that has a Section 18A certificate, you can deduct that donation from your taxable income. The limit is 10% of your taxable income.

  • The charity must be registered with SARS (Section 18A)
  • Keep your receipt as proof
  • You claim this when you do your tax return

5. Claim work-from-home expenses

If you work from home in a dedicated room used only for work, you may be able to claim a portion of your rent, electricity, and internet. But be careful — SARS is strict about this.

  • The room must be used ONLY for work
  • You must earn more than 50% of your income from commission (for salaried employees)
  • Keep records of all expenses
  • This is risky if you are a normal salaried employee — check with SARS first

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