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HomeProvisional tax

Provisional tax,
in plain English.

IRP6 datesWho must payPlain English
See Bookkeeping & Invoicing Accounting software

What is provisional tax and who must pay it?

Provisional tax is income tax paid in advance during the year, in two payments, instead of all at once after assessment. Companies are provisional taxpayers, and so are most individuals who earn income that is not a salary, such as business or rental income. For a February year end the first IRP6 is due by the end of August and the second by the end of February.

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The payments

When IRP6
is due.

For a February year endWhat it covers
First paymentEnd of AugustHalf the estimated tax for the year
Second paymentEnd of FebruaryThe rest, on a closer estimate
Third paymentOptional, after the year endTops up to cut interest; the date depends on your year end
Estimating

Getting the
estimate right.

Why the estimate matters

The second payment must be based on a reasonable estimate of the year's taxable income. Estimate too low and SARS can add an underestimation penalty and interest. Your books are the evidence for the estimate.

Other year ends

A company with another year end pays its first IRP6 six months into its year and the second at its year end. The deadline calendar works the dates out from your own year end.

How Bookkeeping & Invoicing helps

Your income and costs are in the books as you go, so the estimate comes from real figures, not a guess. The year-end pack lays out the IRP6 estimate with the return, and the deadline calendar emails you before each payment is due. You or your accountant submit on eFiling.

A note

This is a plain-English summary, not tax advice. Check your own case with SARS or your accountant.

Questions

Provisional tax
questions.

Usually not: PAYE covers a salary. Provisional tax is for income that has no tax taken off it, like business or rental income.

No. It is voluntary and paid after the year end to reduce interest on any shortfall.

SARS can charge an underestimation penalty and interest if the second payment was based on too low an estimate.

No. It works out the figures and reminds you; you or your accountant submit and pay on eFiling.

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