How are sole proprietors taxed in South Africa?

Updated 1 November 2026 · 3 min read

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In short

Your business profit is added to your other income, like a salary, and taxed on the same individual tax table [1], [2].
From 1 March 2026 to 28 February 2027 the rates run from 18% to 45% [3].
Under 65, you pay no income tax until taxable income passes R99,000, the tax threshold [3].

How sole proprietors are taxed

A sole proprietor is taxed on profits as an individual, not as a separate business [1].

Work out the business’s profit
Sales less business costs [4].
Add your salary and other income
All on one income tax return, the ITR12 [2].
Apply the tax table to the total
The brackets below [3].
Take off your rebate
R17,820, and more from age 65 [3], [5].
Take off tax already paid
PAYE (tax withheld from a salary) and provisional tax [6].

Income tax brackets 2026/2027

For 1 March 2026 to 28 February 2027 [3].

Taxable income	Tax for the year
R1 – R245,100	18% of taxable income
R245,101 – R383,100	R44,118 + 26% above R245,100
R383,101 – R530,200	R79,998 + 31% above R383,100
R530,201 – R695,800	R125,599 + 36% above R530,200
R695,801 – R887,000	R185,215 + 39% above R695,800
R887,001 – R1,878,600	R259,783 + 41% above R887,000
R1,878,601 and above	R666,339 + 45% above R1,878,600

Tax threshold and rebates

The rebate comes off your tax, so income up to the threshold is tax-free [3], [5].

Tax threshold, under 65: R99,000; 18% of R99,000 is R17,820, the primary rebate [3].
Primary rebate: R17,820; Comes off the year’s tax [3], [5].
Tax threshold, 65 and older: R153,250; A further R9,765 rebate [3].
Tax threshold, 75 and older: R171,300; A further R3,249 rebate [3].

Salary plus side hustle: a worked sum

A R300,000 salary and R60,000 side-hustle profit, under 65, with no other deductions or credits.

R300,000SalaryR60,000Side-hustle profitR360,000Taxable income

R40,572Tax on the salary aloneR15,600Added by the side hustleR56,172Income tax for the year

R44,118 + 26% of the R114,900 above R245,100 is R73,992; less the R17,820 rebate, R56,172. The profit is taxed at 26%, your top rate [3], [5]. If PAYE already covers the R40,572, R15,600 is left to pay: R7,800 at each provisional payment [5].

What you can deduct

Costs count when actually incurred in earning the business’s income, claimed in that year [4].

Counts

Day-to-day costs of trading, not the price of a lasting asset [4]
Equipment, through a wear-and-tear allowance [4]
The part of your home used for the business, under conditions [4]

Doesn’t count

Private and household costs [4]
The private share of a phone, internet or travel [2]

Provisional tax on side income

Business income makes you a provisional taxpayer, even beside a salary, paying during the year [7].

1st payment: By 31 August; Or the business day before, if it’s a weekend or public holiday [7].
2nd payment: February’s last business day; The end of the year of assessment [7].

Provisional tax: your two paymentsFreelancer, influencer or side hustle: the whole journey

References

General guidance, not tax or legal advice.

[1]South African Revenue Service, “Starting a business and tax,” SARS, Aug. 19, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/businesses-and-employers/small-businesses-taxpayers/starting-a-business-and-tax/ (opens in a new tab)
[2]South African Revenue Service, “Taxation of Income Received by Social Media Influencers and Content Creators, GEN-REG-01-G06,” SARS, Oct. 20, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/wp-content/uploads/Ops/Guides/GEN-REG-01-G06-Taxation-of-Income-Received-By-Social-Media-Influencers-And-Content-Creators-External-Guide.pdf (opens in a new tab)
[3]South African Revenue Service, “Rates of Tax for Individuals,” SARS, Oct. 28, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/ (opens in a new tab)
[4]South African Revenue Service, “Tax Guide for Small Businesses 2025/2026,” SARS, Sep. 30, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/wp-content/uploads/Ops/Guides/Legal-Pub-Guide-Gen09-Tax-Guide-for-Small-Businesses.pdf (opens in a new tab)
[5]South African Revenue Service, “How to work out amounts due for Provisional Tax – example,” SARS, Feb. 19, 2025. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/provisional-tax/how-to-work-out-amounts-due-for-provisional-tax-example/ (opens in a new tab)
[6]South African Revenue Service, “Guide for Provisional Tax, GEN-PT-01-G01,” SARS, Oct. 16, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/wp-content/uploads/Ops/Guides/GEN-PT-01-G01-Guide-for-Provisional-Tax-External-Guide.pdf (opens in a new tab)
[7]South African Revenue Service, “Provisional Tax,” SARS, Aug. 21, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/provisional-tax/ (opens in a new tab)