Every taxpayer gets a set of tax-free allowances each year, and Budget 2026 increased most of them. Here are eight worth using in the 2026/27 tax year (1 March 2026 to 28 February 2027), with the figures from SARS's Budget 2026 Tax Guide (opens in a new tab).
1. Income tax threshold: R99 000
If you are under 65 and earn R99 000 or less in taxable income this year, you pay no income tax. The threshold is R153 250 if you are 65 to 74, and R171 300 if you are 75 or older.
2. Interest exemption: R23 800
The first R23 800 of South African interest you earn each year is tax-free, or R34 500 if you are 65 or older. Only interest above that amount is taxed.
3. Tax-free savings account: R46 000 a year
You can invest up to R46 000 a year, and R500 000 over your lifetime, in a tax-free savings account. All interest, dividends and growth inside it are tax-free. Watch the limit: SARS charges a 40% penalty on contributions above it.
4. Retirement contributions: up to R430 000
Money you put into a pension, provident or retirement annuity fund is deductible up to 27.5% of your income, capped at R430 000 a year. Contributions above the cap carry forward to later years.
5. Capital gains exclusion: R50 000
The first R50 000 of capital gains you make each year is not taxed. It applies when you sell shares, a second property or other assets at a profit.
6. Selling your home: R3 million
When you sell the home you live in, the first R3 million of the gain is excluded from capital gains tax.
7. Donations: R150 000 a year
You can give away up to R150 000 a year without donations tax. Gifts between spouses are always exempt. Used every year, this is one of the simplest estate-planning tools available.
8. Small business corporation rates: 0% on the first R99 000
A qualifying small company pays 0% on its first R99 000 of taxable income, then 7%, 21% and 27%, instead of the flat 27% company rate. Its gross income must not exceed R20 million and all shareholders must be individuals, among other requirements. Very small businesses with turnover up to R2.3 million can choose turnover tax instead, at 0% on the first R600 000.
Make them count
Most of these allowances reset every tax year. An allowance you don't use by 28 February 2027 is lost for this year, so check where you stand before the year ends.
Sources
• SARS Budget 2026 Tax Guide (opens in a new tab) • SARS Budget 2026 Frequently Asked Questions (opens in a new tab)
This article is general information for the 2026/27 tax year, not tax or legal advice. Lawvero provides document preparation services and does not provide legal advice.