Many South Africans mistakenly believe they don't need to file a tax return if they earn below the tax threshold. This article explores common misconceptions about tax compliance and offers practical advice to avoid penalties and ensure financial security.
Many South Africans believe that if they earn below the tax threshold, R95,750 annually for those under 65 in 2026, they don’t need to file a return. This assumption is dangerously wrong.
The Income Tax Act technically places the onus on anyone earning even R1 to file a return with SA Revenue Service (Sars): “Seemingly minor financial events can unexpectedly force you to file. A savings- or two-pot withdrawal creates a second income stream that’s taxed as normal remuneration. Having more than one IRP5 generally makes filing a tax return compulsory, as Sars requires all sources of employment income to be declared and assessed together.
Other events include accruing bank interest exceeding R28,300 annually for under-65s (R34,500 for over-65s); making a profit from selling assets such as shares, unit trusts, cryptocurrency, or your primary property for over R2.5 million; and earning income from foreign dividends and rental properties.
Here are other areas that are commonly misunderstood:
