Turnover tax in South Africa: who qualifies and what you pay

Updated 1 November 2026 · 3 min read

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In short

Turnover tax is an optional, simpler tax on your sales, not your profit, for micro businesses with turnover of R2.3 million or less a year [1].
For 2026/27 the first R600,000 is tax-free, then 1% to 3% [2]: at most R39,500 a year [3].
It takes the place of income tax and provisional tax on the business, capital gains tax and, up to a limit, dividends tax [3], [4].
Register before your tax year starts, or within two months of starting a new business [5].

Turnover tax rates for 2026/27

For years ending between 1 March 2026 and 28 February 2027 [2].

Turnover for the year	Turnover tax
R0 to R600,000	0%Nothing
R600,001 to R950,000	1%1% of the amount above R600,000
R950,001 to R1.4 million	2%R3,500 + 2% of the amount above R950,000
R1,400,001 and above	3%R12,500 + 3% of the amount above R1.4 million

Each rate applies only to the part of your turnover inside its band [2]. SARS already uses these Budget 2026 amounts [2]; the bill that puts them into law went to Parliament on 21 October 2026 [6], [7].

R0First R600,000R3,5001% up to R950,000R5,0002% of the R250,000 aboveR8,500Turnover tax for the year

R8,500 on R1.2 million of turnover: under 1% of sales [2].

Who qualifies

Turnover of R2.3 million or less a year, and none of the exclusions [1].

Can register

Sole proprietors and partnerships [2]
Close corporations, companies and co-operatives [2]
Owners who are all people, not other companies or trusts [1]

Can’t register

Over 20% of receipts from professional services, like consulting [1]
A company, CC or co-operative with over 20% from professional services and investment income, like rent or dividends, together [8]
A company, CC or co-operative whose tax year doesn’t end in February [8], until the proposed change becomes law [9]
Personal service providers, and labour brokers without a SARS exemption certificate [8]
You or the business holding shares in an unlisted company [8]
Over R1.5 million from selling business assets in three years [8]
Registered before and left [1]

What it replaces

One tax and one return for the business [3].

Replaced

Income tax on the business [3]
Provisional tax [3]
Capital gains tax (CGT) on business assets: half of what you sell them for counts as turnover [4]
Dividends tax, up to a limit [4]

Still yours

Employees’ tax (PAYE), UIF and the skills development levy for staff [4]
VAT, if you register: you can be on both [1]

Is turnover tax worth it?

Weigh your costs, the income tax you’d otherwise pay and the paperwork you’d save [4].

In its favour

Lower rates, set to allow for typical costs [2]
Fewer records: money received, dividends, and assets or debts over R10,000 [2]
One return instead of several [3]

Weigh first

Costs aren’t deducted: a high-cost year still pays on its sales [4]
Leave once and you can’t register again [5]

How to register

Do SARS’s quick test
It checks whether you qualify [5].
Apply on the SARS Online Query System (SOQS)
Or send the TT01 form by eBooking appointment or email [5].

Already trading: Before your tax year starts; Before 1 March for a March-to-February year [5].
New business: Within two months; Of the day it started [5].
Leaving by choice: Before a new tax year; You’re out from the start of that year [5].
Over R2.3 million, or likely to be: Tell SARS within 21 days; SARS deregisters you from the next month [4], [5].

When it’s due

Two payments in the year on the TT02 payment advice, then the annual return [2].

First payment: Last business day of August; Six months into your tax year [1], [2].
Second payment: Last business day of February; At the end of the tax year: 26 February 2027 for 2026/27 [2].
Annual return (TT03): By SARS’s yearly deadline; Set in its annual filing notice; individuals file with their income tax returns [10], in filing season [11]. SARS then works out the final amount [1], [2].
Weekend or public holiday: Pay the business day before; When a due date falls on one [2].

References

General guidance, not tax or legal advice.

[1]South African Revenue Service, “Budget 2026 Frequently Asked Questions,” SARS, Aug. 12, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/about/sars-tax-and-customs-system/budget/budget-2026-frequently-asked-questions/ (opens in a new tab)
[2]South African Revenue Service, “Turnover Tax,” SARS, Sep. 22, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/turnover-tax/ (opens in a new tab)
[3]South African Revenue Service, “SMME Connect Issue 14 (April 2026),” SARS, Apr. 24, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/businesses-and-employers/small-businesses-taxpayers/smme-connect-issue-14-april-2026/ (opens in a new tab)
[4]South African Revenue Service, “Tax Guide for Micro Businesses (Issue 3),” SARS, Jan. 16, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/legal-pub-guide-tt01-tax-guide-for-micro-businesses/ (opens in a new tab)
[5]South African Revenue Service, “How to Register,” SARS, Oct. 23, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/turnover-tax/how-to-register/ (opens in a new tab)
[6]National Treasury, “2026 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill,” SARS. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/wp-content/uploads/Legal/Drafts/Legal-LPrep-Draft-2026-03-2026-Draft-Rates-Bill-25-February-2026.pdf (opens in a new tab)
[7]South African Revenue Service, “Legal Counsel – Preparation of Legislation – Bills,” SARS. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/latest-news/legal-counsel-preparation-of-legislation-bills-9/ (opens in a new tab)
[8]South African Revenue Service, “Quick test for individuals and companies,” SARS, Apr. 10, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/turnover-tax/quick-test-for-individuals-and-companies/ (opens in a new tab)
[9]National Treasury, “Draft Explanatory Memorandum on the Draft Taxation Laws Amendment Bill, 2026,” SARS. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/legal-lprep-draft-2026-31a-draft-explanatory-memorandum-on-the-draft-2026-taxation-laws-amendment-bill-2026-30-july-2026/ (opens in a new tab)
[10]South African Revenue Service, “Annual Return,” SARS, Apr. 10, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/turnover-tax/annual-return/ (opens in a new tab)
[11]South African Revenue Service, “Filing Season,” SARS, Sep. 21, 2026. Accessed: Nov. 1, 2026. [Online]. Available: https://www.sars.gov.za/types-of-tax/personal-income-tax/filing-season/ (opens in a new tab)