Turnover Tax Calculator
Calculate turnover tax for micro businesses up to R1 million.
Last reviewed: Tax year: 2026/2027Source: SARS — Turnover Tax (Sixth Schedule)
What turnover tax is — and who it’s for
Turnover tax is a simplified tax regime for very small businesses, set out in the Sixth Schedule of the Income Tax Act. Instead of paying income tax, provisional tax, VAT, and SDL separately, a qualifying micro-business pays a single flat tax on turnover — gross receipts before any expenses are deducted.
The trade-off is simple. You give up the ability to deduct expenses and the input-VAT claim that comes with it; in return you get a one-form-a-year compliance regime, much lower bookkeeping overhead, and a 0% bracket on your first R335,000 of turnover. For a high-margin solo operator turning over R600k–R900k a year, it can save thousands in tax and easily ten times that in accounting fees.
Who qualifies as a micro-business
The Sixth Schedule sets a strict eligibility test. All of the following must be true:
- Annual turnover under R1,000,000. If you breach the threshold during the year, you exit the regime at the end of that year and revert to standard tax for the next.
- Sole proprietor, partnership, close corporation, or company. No trusts.
- Owners are natural persons only — no other entities holding shares or a partnership interest.
- No personal services from professionals — accountants, lawyers, doctors, engineers, consultants whose income depends primarily on their personal qualifications. SARS specifically excludes these.
- Investment income under 10% of total receipts. Rental, interest, and dividends combined.
- Owner doesn’t hold shares in another company (some exceptions for listed-share investments under R5,000).
You opt in via the TT01 registration form before the start of a tax year. You can’t join mid-year, and once you’ve voluntarily exited you can’t re-register for three years.
Turnover tax brackets (2026/2027)
| Annual turnover | Tax payable |
|---|---|
| R0 – R335,000 | 0% (tax-free) |
| R335,001 – R500,000 | 1% of amount above R335,000 |
| R500,001 – R750,000 | R1,650 + 2% of amount above R500,000 |
| R750,001 – R1,000,000 | R6,650 + 3% of amount above R750,000 |
The structure is sharply progressive on a small base — the first R335,000 is tax-free, then 1% applies up to R500k, 2% up to R750k, and 3% on turnover up to the R1m ceiling. At the R1m breach point the maximum turnover tax bill is R6,650 plus 3% of R250,000 = R14,150.
Turnover tax vs standard income tax — the break-even
Tutoring business, R600,000 turnover, 70% margin
Profit = R420,000 (R180k expenses). Sole prop, no other income.
- Standard income tax (on R420k profit)
- R71,772 (after primary rebate)
- Turnover tax (on R600k turnover)
- R3,650
- Tax saving
- R68,122
Trading business, R900,000 turnover, 10% margin
Profit = R90,000 (R810k expenses, lots of stock). Sole prop, no other income.
- Standard income tax (on R90k profit)
- R0 (below tax threshold)
- Turnover tax (on R900k turnover)
- R11,150
- Tax penalty
- +R11,150
The pattern is clear: turnover tax wins for high-margin services and loses for low-margin trading. The rough rule of thumb is that if your net profit is more than ~70% of turnover, the turnover regime saves money. Below 50%, standard tax is almost always better.
Turnover tax vs SBC — both are for small businesses
Don’t confuse turnover tax (Sixth Schedule, R1m ceiling) with the Small Business Corporation regime (Section 12E, R20m ceiling). They’re both small-business tax breaks but they target very different businesses:
- Turnover tax — micro-business under R1m, no expense deductions, simplified compliance. Solo operators and very small partnerships.
- SBC — incorporated company with up to R20m turnover, full expense deductions, accounting records and tax return required. Real businesses with employees and assets.
You can’t use both in the same year — turnover tax operators are explicitly excluded from the SBC regime.
Compliance — what you actually have to do
- One return a year — TT03, due 31 January following the tax year.
- Two interim payments — first on 31 August (50% of estimated liability), second on 28 February (balance). This is the equivalent of provisional tax under standard rules.
- No VAT registration, even if your turnover crosses the R1m VAT threshold (the turnover tax regime overrides). You can voluntarily register for VAT if it suits your business model.
- Records to keep: all sales invoices, all expense slips (you don’t deduct them but SARS still wants the audit trail), bank statements, and asset registers.
How this calculator works
Enter your annual turnover and the calculator applies the Sixth Schedule brackets to show the turnover tax due plus your effective rate. It also flags when you’re near the R1m ceiling — once you breach it, you’re out of the regime for at least the next tax year.
The calculator doesn’t check the qualifying tests for you. Confirm you meet all the Sixth Schedule criteria (especially the personal-services exclusion) before relying on the result. SARS will reassess you under standard income tax with interest and penalty if it later finds you weren’t eligible.
Sources
Frequently Asked Questions
Turnover tax is a simplified tax regime for micro businesses with annual turnover under R1 million. It is charged on gross turnover (not profit) and is progressive.
You must be a natural person running a business as a sole trader. Turnover must be under R1 million per year. You cannot be a director of a close corporation or company.
0% on turnover up to R335,000. Then 1%, 2%, then 3% on progressively higher brackets, capped at 3% on turnover over R1,000,000.
Under turnover tax, you cannot deduct expenses. Tax is calculated on gross revenue. This simplifies compliance but may be disadvantageous if expenses are high.