As a freelancer or self-employed individual in South Africa, understanding provisional tax is crucial for staying compliant with SARS and avoiding penalties. This comprehensive guide explains everything you need to know about calculating, paying, and managing your freelance tax obligations in 2025.
What is Provisional Tax?
Provisional tax is a way of paying your income tax in advance, in two installments during the year, rather than in one lump sum when you file your annual return. Think of it as a "pay-as-you-earn" system for self-employed individuals.
Why Provisional Tax Exists:
- Spreads your tax payment throughout the year instead of one large payment
- Helps SARS collect tax revenue more consistently
- Reduces the risk of a large tax bill when filing your annual return
- Improves cash flow management for self-employed individuals
Who Must Pay Provisional Tax?
You must register and pay provisional tax if you meet these criteria:
✅ Must Register
- • Freelancers and independent contractors
- • Self-employed business owners
- • Anyone with rental income
- • Commission earners (if not PAYE)
- • Investors with taxable income
- • Directors with non-PAYE income
- If tax liability exceeds R1,000/year
❌ Exemptions
- • Employees with only PAYE income
- • Individuals under 65 earning less than R101,433/year
- • Companies, trusts, and other entities (different rules)
- • Those with tax liability under R1,000
Provisional Tax Payment Deadlines
For individuals with a February year-end (most common), the deadlines are:
| Payment | Deadline | Period Covered | Recommended Amount |
|---|---|---|---|
| First Payment (IRP6) | 31 August 2025 | 1 Mar 2025 - 31 Aug 2025 | 40-50% of annual estimate |
| Second Payment (IRP6) | 28 February 2026 | Full year (1 Mar 2025 - 28 Feb 2026) | 90-100% of annual estimate |
⚠️ Important Deadline Information:
- If the deadline falls on a weekend or public holiday, payment is due the next business day
- Late payments incur penalties and interest from the original due date
- You can pay early to avoid last-minute issues
- Set calendar reminders at least 2 weeks before each deadline
How to Calculate Provisional Tax
Calculating provisional tax involves estimating your annual taxable income and applying the appropriate tax rates:
- Estimate your annual income
Based on contracts, invoices, and expected earnings for the full tax year (March to February).
- Subtract allowable deductions
Deduct business expenses like home office, equipment, travel, and professional fees.
- Calculate tax using SARS brackets
Apply the progressive tax rates to your estimated taxable income.
- Subtract the primary rebate
Deduct R18,258 (2025/2026 primary rebate) from your calculated tax.
- Split into two payments
Pay approximately 40-50% in August and the remaining 50-60% in February.
Practical Examples
Example 1: Part-Time Freelancer (R180,000/year)
Example 2: Full-Time Freelancer (R480,000/year)
Example 3: High-Earning Consultant (R840,000/year)
Tax-Deductible Business Expenses
As a freelancer, you can deduct legitimate business expenses to reduce your taxable income:
✅ Commonly Deductible
- • Home Office: Rent, electricity, internet (proportional)
- • Equipment: Laptop, phone, software, furniture
- • Travel: Business-related mileage (R4.84/km)
- • Professional Fees: Accountant, lawyer, memberships
- • Marketing: Website, advertising, business cards
- • Insurance: Professional indemnity, business insurance
- • Bank Charges: Business account fees, transaction costs
- • Stationery: Office supplies, printing
❌ Not Deductible
- • Personal groceries and household expenses
- • Entertainment and social events
- • Personal clothing (unless branded/uniform)
- • Personal vehicle costs (non-business use)
- • Fines and penalties
- • Personal insurance and medical aid (separate tax credit)
- • Personal phone and data (non-business portion)
💡 Record-Keeping Best Practices:
- Keep all invoices, receipts, and bank statements for 5 years
- Use accounting software (Xero, QuickBooks, Wave) or spreadsheets
- Separate business and personal bank accounts
- Take photos of receipts and store digitally
- Track mileage with an app or logbook for travel deductions
- Calculate home office percentage based on floor area
How to Register for Provisional Tax
Follow these steps to register with SARS:
- Register for a Tax Number
If you don't have one, register at a SARS branch or online at www.sars.gov.za
- Register for eFiling
Create an eFiling profile on the SARS website to submit returns and make payments online.
- Notify SARS of Provisional Tax Liability
Complete and submit an IRP6 form or register through eFiling under "Provisional Tax."
- Submit Your First IRP6 Return
Calculate and submit your estimated tax liability by the first deadline (usually August).
Penalties for Late or Incorrect Payment
SARS takes provisional tax compliance seriously. Here's what happens if you don't comply:
| Issue | Consequence | How to Avoid |
|---|---|---|
| Late Payment | Penalty + interest from due date | Pay before deadline, set reminders |
| Underpayment (>20%) | 20% penalty on shortfall | Pay 90% of estimated tax |
| Non-Registration | Admin penalty + back taxes | Register when you start earning |
| No IRP6 Submission | Estimated assessment by SARS | Submit returns before deadlines |
Calculate Your Freelance Tax Now
Use our free freelance tax calculator to estimate your provisional tax liability and plan your payments for 2025/2026.
Try Freelance Tax Calculator →Tips for Managing Freelance Taxes
💰 Set Aside Tax Money
Save 25-35% of every payment in a separate account for tax. This ensures you have funds available when provisional tax is due.
📊 Track Everything
Use accounting software or spreadsheets to track income and expenses monthly. This makes tax calculations easier and ensures you don't miss deductions.
🔔 Set Reminders
Calendar reminders 2-4 weeks before August and February deadlines. This gives you time to calculate and make payments without rushing.
👨💼 Consider a Tax Practitioner
If your finances are complex, hiring a tax professional can save you money through optimized deductions and ensure compliance.
Key Takeaways
- Provisional tax is mandatory for freelancers with tax liability over R1,000 per year
- Two payments due annually: August (first estimate) and February (final estimate)
- Pay at least 80-90% of your expected annual tax to avoid penalties
- Track all business expenses meticulously - they directly reduce your tax liability
- Use eFiling to submit IRP6 returns and make payments online
- Set aside 25-35% of income for tax to avoid cash flow issues
- Penalties for late payment or underpayment can be up to 20% plus interest
- Keep records for 5 years in case of SARS audit
Disclaimer: This guide provides general information about provisional tax for freelancers in South Africa based on 2025/2026 tax rates. Tax situations vary based on individual circumstances, business structure, and specific deductions. This information should not be considered personalized tax advice. Always consult with a registered tax practitioner or accountant for advice specific to your situation. Tax laws and rates are subject to change. SARS is the authoritative source for all tax-related matters.