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Provisional vs. non-provisional tax

Am I a provisional or a non-provisional tax payer? ​

A non-provisional taxpayer is a person who earns a salary and make their contributions to SARS via PAYE deducted off their paycheck by their employer. They only have to submit an income tax return (ITR12) for each tax year.

A provisional taxpayer is normally a person who earns income other than a salary on which no employees’ tax/PAYE has been deducted. Provisional taxpayers include a person or a trust that earns income which is not remuneration (e.g., rental income), an allowance or an advance. It can also include a person who earns remuneration from an employer that is not registered for employees’ tax.

The definition of “provisional taxpayer” does contains certain exemptions, which could lead to a person not being a provisional tax payer.

  • If a person's taxable income for the year of assessment doesn't exceed the tax threshold (for 2023, the tax threshold is R91 250 for persons under 65)
  • If a person's taxable income for the year of assessment is derived from interest, dividends, foreign dividends, rental from letting fixed property or any remuneration from an employer that is not registered for employees’ tax but does not exceed R30 000, they will also not be a provisional taxpayer.

If you are unsure as to whether you are a provisional taxpayer or not, you should obtain formal tax advice. SARS is also empowered to notify a person that he / she is a provisional taxpayer for any reason.

It is important to note that in the 2022 Budget Speech, it was indicated that provisional taxpayers with business interests and assets above R50 million will be required to disclose specified assets and liabilities at market value for purposes of submission of provisional tax returns for the 2023 year of assessment.

Disclaimer: The answers above are only applicable to individuals who are exclusively regarded as tax residents of South Africa. This is for information purposes only, and we urge clients to seek independent tax advise to ensure that your tax circumstances have been properly considered.