Provisional tax helps taxpayers pay income tax in advance during the year of assessment. It is not a separate tax. It is a method of spreading income tax payments across the tax year instead of paying one large amount on assessment. [1]
What is Provisional Tax?
Provisional tax is based on estimated taxable income. SARS requires provisional taxpayers to make at least two payments during the year of assessment. These payments are credited against the final income tax liability. [1]
Who Must Pay Provisional Tax?
Provisional taxpayers include companies and individuals who earn income other than employment income. This may include business income, rental income, investment income, or other taxable income not fully covered by employees’ tax. [1]
Provisional Tax Deadlines
For taxpayers with a February year-end, the first provisional tax payment is due on 31 August and the second payment is due on the last day of February. A voluntary third payment may be made by 30 September to reduce interest. [2]
Provisional Tax Checklist
| Check | Requirement | Details |
|---|---|---|
| ☐ | Estimated taxable income | Based on expected income for the year |
| ☐ | Previous tax assessments | Used as a reference point |
| ☐ | Business income records | Sales, invoices, and income records |
| ☐ | Deductible expenses | Valid business expenses |
| ☐ | Supporting documents | Bank statements, invoices, and statements |
| ☐ | SARS eFiling access | Needed for IRP6 submission and payment |
How to Calculate Provisional Tax
The calculation is based on estimated taxable income for the full year of assessment. The second payment should be more accurate because it is closer to year-end. SARS may apply penalties when taxable income is underestimated. [3]
Penalties and Interest
Late payment of provisional tax can result in a 10% penalty. Underestimation penalties may also apply when the second provisional estimate is too low. SARS states that an underestimation penalty can be 20% where the second estimate is below the required level. [4]
Common Provisional Tax Mistakes
Small businesses often make errors by estimating income too low, missing payment deadlines, or working from incomplete bookkeeping records. These mistakes can lead to penalties, interest, and cash flow pressure.
Why Accurate Bookkeeping Matters
Accurate bookkeeping helps small businesses estimate taxable income correctly. Updated records make it easier to calculate provisional tax, claim valid deductions, and avoid underpayment.
Get Help with Provisional Tax
Provisional tax requires accurate estimates and timely submissions. Unify Accounting can assist with tax planning, bookkeeping, SARS submissions, and compliance support.
Contact Unify Accounting for help with provisional tax and small business tax compliance.
References
- South African Revenue Service (SARS). Provisional Tax.
https://www.sars.gov.za/types-of-tax/provisional-tax/ - South African Revenue Service (SARS). Guide to Provisional Tax.
https://www.sars.gov.za/guide-to-provisional-tax/ - South African Revenue Service (SARS). Guide for Provisional Tax.
https://www.sars.gov.za/wp-content/uploads/Ops/Guides/GEN-PT-01-G01-Guide-for-Provisional-Tax-External-Guide.pdf - South African Revenue Service (SARS). Budget 2026 Frequently Asked Questions.
https://www.sars.gov.za/about/sars-tax-and-customs-system/budget/budget-2026-frequently-asked-questions/