TFSA Calculator
Project your Tax-Free Savings Account growth and contribution room.
Last reviewed: Tax year: 2026/2027Source: SARS — Tax-free savings accounts
What a TFSA actually is
A Tax-Free Savings Account is the most tax-efficient savings vehicle available to most South Africans. Inside a TFSA, you pay no tax on interest, no tax on dividends, and no capital gains tax when you sell. You can withdraw any time, for any reason, with no penalty. The only cost is a contribution cap.
For 2026/2027, you can contribute up to R46,000/year with a lifetime cap of R500,000. Both limits were raised in Budget 2026 (from R36,000 annual and R500,000 lifetime in previous years). When you hit the lifetime cap, you stop contributing — but your money keeps growing tax-free.
Why TFSA beats RA for some goals (and loses for others)
Both TFSA and retirement annuity (RA) offer tax advantages, but they solve different problems:
| Feature | TFSA | Retirement Annuity |
|---|---|---|
| Annual limit | R46,000 | 27.5% of income, capped at R430,000 |
| Contribution tax deduction | None | Full deduction (lowers current tax bill) |
| Growth taxed? | Never | Never (inside fund) |
| Withdrawal taxed? | Never | Yes (marginal rate or lump-sum table) |
| Access before 55? | Any time | No (except emigration / permanent disability / small balance) |
| Can be bequeathed? | Passes via estate | Passes via nominated beneficiary |
| Estate duty? | Included in estate | Excluded from estate |
TFSA wins when: you have a short-to-medium horizon (5–20 years), you’re in a low tax bracket (primary rebate covers most of your tax anyway), or you need optional access to the money.
RA wins when: you’re in a high tax bracket (the upfront deduction gives you immediate 31–45% off the contribution), you’re saving specifically for retirement, and you have 15+ years until access.
Most financial planners recommend using both — max the RA for the tax deduction (if your bracket is high), then pile into the TFSA for tax-free growth and flexibility.
The over-contribution penalty
Contributing more than the annual or lifetime limit in a tax year triggers a 40% penalty on the excess — levied by SARS, payable via your normal tax return. That wipes out the tax benefit many times over. If you have multiple TFSAs across different providers, the limit applies to the aggregate across all of them, not per account.
SARS tracks contributions via provider IT3(s) submissions, so an over-contribution is almost certain to be caught. The penalty is applied to the amount above the limit, not the whole contribution.
Rollover rule: unused annual allowance doesn’t carry forward. If you only contribute R20,000 in a tax year, the unused R26,000 is gone — you can’t top up next year. Use it or lose it, within the lifetime cap.
Withdrawals don’t free up contribution room. If you put in R100,000 over three years and then withdraw R30,000, your lifetime contributed amount is still R100,000. You can keep contributing up to R500,000 total — the withdrawal doesn’t reset the counter.
Worked examples
Max TFSA for 11 years from age 30
Contribute R46,000/year from 30 to 40 at 10% annual return. Hits lifetime cap of R500,000 in year 11 (R46,000 × 11 = R506,000).
- Monthly contribution
- ≈ R3,833
- Contribution duration
- 11 years
- Total contributed
- R500,000 (exactly lifetime cap, rounded)
- Fund value at year 11 (10% return)
- ≈ R925,000
- Fund value at retirement (year 35, left to compound)
- ≈ R9,160,000
Same amount in a taxed unit trust
Same contributions, same returns — but in a taxable investment. 15% dividends withholding + 18% effective CGT on gains = ~30% drag on returns.
- Nominal return
- 10%
- After-tax return
- ≈ 7%
- Fund value at year 35
- ≈ R4,780,000
- Tax paid over 35 years
- ≈ R4,380,000 less accumulated
Smaller contribution, longer horizon
R1,000/month into a TFSA from 25 to 65 at 10%. Never hits the annual or lifetime cap.
- Total contributed
- R480,000
- Final fund value at 10% over 40 years
- ≈ R6,308,000
- Interest earned (tax-free)
- ≈ R5,828,000
What you can hold inside a TFSA
Providers offer different options inside the TFSA wrapper — the account is a container, not a product in itself. Your actual return depends on what you hold:
- Cash TFSA — bank deposit returning ~7–9%. Safe, liquid, low growth. Good for short-term parking; a waste of the tax wrapper for long horizons.
- Unit trust TFSA — balanced or equity funds inside a TFSA wrapper. Typical 9–12% nominal long-run. Most common for 20+ year horizons.
- ETF TFSA (via Easy Equities, Satrix, etc.) — ETFs inside TFSA wrapper. Lowest fees, broad market exposure. Popular with DIY investors.
- Share TFSA — individual JSE shares. High potential return, concentration risk. Less common.
You can have TFSAs at multiple providers but the total contribution across all of them must stay under the annual and lifetime caps. Provider switches (transfer-in) don’t count as new contributions if done correctly.
When NOT to use a TFSA
- Below the tax threshold. If you earn under R99,000/year (2026/2027 tax-free threshold for under-65), you pay no income tax anyway. TFSA provides no additional benefit on interest below the interest exemption — use a regular savings account for flexibility.
- Emergency fund parking. Putting your emergency fund in a TFSA permanently burns lifetime contribution room every time you use and replace it. Regular money-market fund is better.
- When you haven’t maxed the RA tax deduction yet. If you’re in the 36%+ bracket, the upfront RA deduction is worth more than a TFSA on a rand-matched basis. Do RA first, TFSA second.
How this calculator works
Enter a monthly contribution, expected annual return, and duration. The calculator tracks your annual and lifetime contributions against the 2026/2027 caps (R46,000 and R500,000), flags if you’re going over, and projects your future fund value assuming tax-free growth throughout.
Sources
Frequently Asked Questions
A Tax-Free Savings Account is a registered investment account where growth and withdrawals are completely tax-free. You can contribute up to R46,000 per year (2026/2027) and have a lifetime limit of R500,000.
The annual contribution limit is R46,000. If you have unused contribution room from previous years, you can carry it forward. Your lifetime limit is R500,000.
Yes. All investment returns, whether interest, dividends, or capital gains, are completely tax-free. You never pay tax on TFSA withdrawals, even if you withdraw more than you contributed.
Yes. Unlike retirement accounts, you can withdraw from your TFSA without penalty or tax. The amount you withdraw is added back to your contribution room the following calendar year.