How to Calculate PAYE on Salary in South Africa

Pay As You Earn (PAYE) is the income tax deducted by employers from employees’ salaries before they are paid. In South Africa, PAYE is administered by the South African Revenue Service (SARS) and is calculated using the country’s annual tax tables. The amount deducted depends on your taxable income, tax bracket, rebates, and any allowable deductions. Learning how to calculate PAYE on your salary in South Africa helps you understand your payslip and estimate your monthly take-home pay more accurately.

1. Determine Your Gross Salary

Start by identifying your gross salary before any deductions are made.

Your gross salary includes your basic salary, taxable allowances, bonuses, commissions, overtime, and other taxable benefits.

• Identify your gross monthly salary
• Include all taxable earnings
• Confirm the correct salary amount

2. Calculate Your Annual Taxable Income

Multiply your monthly salary by 12 to determine your annual taxable income.

SARS uses annual tax tables to calculate income tax, so converting your monthly salary into an annual amount is the first step.

For example, if your monthly salary is R30,000, then:

Annual Taxable Income = R30,000 × 12 = R360,000

• Multiply the monthly salary by 12
• Calculate the annual taxable income
• Confirm the annual amount

3. Apply the SARS Tax Tables

Use the latest SARS income tax tables to identify the tax bracket that matches your annual taxable income.

Calculate the annual tax according to the applicable tax rate and subtract the primary tax rebate if you qualify.

• Identify the correct tax bracket
• Apply the prescribed tax rate
• Deduct the applicable tax rebate

4. Calculate the Monthly PAYE

Once you have determined the annual tax payable, divide it by 12 to determine your estimated monthly PAYE deduction.

For example, if the annual tax payable after rebates is R42,000, then:

Monthly PAYE = R42,000 ÷ 12 = R3,500

This is the amount that will generally be deducted from your salary each month before other deductions.

• Divide the annual tax by 12
• Calculate the monthly PAYE
• Compare it with your payslip

5. Calculate Your Net Salary

Subtract the monthly PAYE together with other deductions such as UIF, pension contributions, medical aid, or retirement fund contributions from your gross salary.

The remaining amount is your net salary or take-home pay.

• Deduct PAYE from your salary
• Include other statutory deductions
• Calculate your take-home pay

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