Turnover Tax Calculator South Africa (2026/2027)

Turnover tax is a simplified tax for micro businesses, set out in the Sixth Schedule of the Income Tax Act. SARS says it replaces income tax, provisional tax, capital gains tax and dividends tax: instead of working out profit, a qualifying micro business pays one tax on its turnover — the money it receives before any expenses are taken off. (VAT is a separate system, covered under “Compliance” below.)

The trade-off is simple. You give up deducting your expenses; in return you keep far fewer records and get a 0% band on your first R600,000 of turnover (raised from R335,000, effective 1 April 2026 per SARS). SARS sets the rates lower than normal income tax rates because expenses are not deducted. For a business with few expenses, turning over between R950k and R1.4m a year, that can mean much less tax — see the worked examples below.

Subject to legislation. The higher turnover tax limit and tax table were announced in Budget 2026 and are subject to Parliament’s legislative process. SARS’s turnover tax page already shows the new limit as effective 1 April 2026, but we have not confirmed that the law has been enacted. Check SARS for the latest.

Registering for turnover tax is optional. SARS lists sole proprietors, partnerships, close corporations, companies and co-operatives as the types of business that may qualify. To qualify you must meet every test, and none of the exclusions may apply:

• Qualifying turnover of R2.3 million or less a year. Qualifying turnover is the money your business receives, leaving out one-off capital receipts such as selling equipment. The limit was R1 million before 1 April 2026 (SARS). If you pass it, or are likely to, you must tell SARS within 21 days and SARS takes you off turnover tax. Splitting a business among relatives to stay under the limit does not work: connected persons’ turnover can be added together.
• Natural-person owners only. In a partnership every partner must be a natural person, and in a company every shareholder must be. A partner can’t be in another partnership, and you generally can’t hold shares in another company (listed shares and collective investment schemes are among the exceptions).
• Not mainly a professional-services business. SARS excludes you if more than 20% of your total receipts come from professional services. The list covers accounting, actuarial work, architecture, auctioneering, auditing, broadcasting, consulting, draftsmanship, education, engineering, financial service broking, health, information technology, journalism, law, management, real estate broking, research, sport, surveying, translation, valuation and veterinary science.
• Limited investment income (companies). For a company, investment income (such as interest, dividends, rent from property, royalties and annuities) and professional-services income together must not be more than 20% of total receipts. For a sole proprietor or partner, only the professional-services income counts toward the 20%; your investment income is left out of turnover tax and taxed under the normal rules.
• Not a personal service provider or labour broker. A labour broker without a SARS exemption certificate does not qualify, and neither does a personal service provider (see the Fourth Schedule definitions).
• Limited sales of business assets. Receipts from selling business assets of more than R1.5 million over the current and two preceding years disqualify you.
• Not previously taken off the system. SARS says businesses that opted out or were deregistered can’t register again.

To register, use the TT01 application on SARS’s online query system (SOQS). An existing business registers before the start of a tax year. A brand-new business that starts trading mid-year has two months from its start date to apply. You can’t be registered for only part of a year if you have already traded for more than two months. To leave by choice, tell SARS by the end of your tax year; it takes effect from the start of the next.

Budget 2026 significantly raised the thresholds, the first update since 2009. The first R600,000 is now tax-free (was R335,000). Above that, the tax is 1% on R600,001–R950,000, 2% (plus R3,500) on R950,001–R1,400,000, and 3% (plus R12,500) on R1,400,001 and above. At the new R2.3m qualification ceiling the maximum turnover tax bill is R12,500 plus 3% of R900,000 = R39,500.

Turnover tax costs less than standard income tax when your profit margin is above the break-even margin, and more when it is below. For these turnover levels that break-even is a margin of about 12% to 13%, so turnover tax only loses for thin-margin trading such as the second example. The break-even moves if you have other income, medical aid credits or retirement deductions, so run the income tax calculator on your own expected profit and compare it with the result here before you register. These examples are illustrations, not advice, and they assume your business is not excluded as a professional-services business.

Don’t confuse turnover tax (Sixth Schedule, R2.3m ceiling from 1 April 2026, was R1m before that) with the Small Business Corporation regime (Section 12E, R20 million gross income ceiling). They’re both small-business tax breaks but they work very differently:

• Turnover tax — micro-business up to R2.3m, no expense deductions, simplified compliance. It stands in for normal income tax.
• SBC — a private company, close corporation or co-operative with gross income up to R20 million, taxed at special rates on profit after all expense deductions. It uses accounting records and a normal tax return.

Turnover tax replaces normal income tax, and the SBC rates are a way of working out normal income tax, so a business is taxed under one or the other for a given year.

• Two interim payments using the TT02 payment advice. The first is due within six months of the start of your tax year (31 August for a year that starts on 1 March; if a due date falls on a weekend or public holiday, pay on the last business day before it). It is 50% of the turnover tax on your estimated turnover for the year, and the estimate can’t be lower than last year’s turnover unless SARS agrees. The second is due by the end of the tax year (the end of February) and covers the rest of the tax on your estimate. This is the turnover tax equivalent of provisional tax.
• One return a year — the TT03, filed after year-end in line with the annual income tax returns (SARS gives 1 July to 31 January for the individual filing window). SARS uses it to work out any final payment or refund.
• Staff taxes still apply. Turnover tax does not replace employees’ tax (PAYE), the skills development levy (where payable) or UIF contributions if you have employees. SARS lets a micro business pay these twice a year instead of monthly.
• VAT is separate. SARS says turnover tax and VAT are separate systems, and turnover tax does not itself require you to register for VAT. You can register for VAT voluntarily once your taxable supplies pass R120,000 a year, which can help if your customers are VAT vendors. Compulsory VAT registration starts at R2.3m of taxable supplies, and the turnover tax limit is R2.3m. A business that goes over the turnover tax limit stops qualifying for turnover tax and must also check whether compulsory VAT registration applies. If you are VAT-registered, the VAT you charge counts as part of your turnover, and VAT returns are normally every six months. Check with SARS before deciding whether to register for VAT.
• Records to keep: SARS requires a record of all amounts you receive, any dividends you declare, and a list of each asset and each liability worth more than R10,000 at year-end. Keep them for five years. Keep your expense slips anyway: they help you check the business is profitable even though you don’t deduct them.

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 your turnover is over the R2.3m limit. If you pass the limit during the year you must tell SARS within 21 days and you leave the regime, so keep an eye on it.

The calculator doesn’t check the qualifying tests for you. Confirm you meet all the Sixth Schedule criteria (especially the professional-services, investment-income and shareholding tests above) before relying on the result, and check with SARS if you are unsure. If you stop qualifying and don’t tell SARS in time, penalties can apply.

Subject to legislation. The higher turnover tax limit and tax table were announced in Budget 2026 and are subject to Parliament’s legislative process. SARS’s turnover tax page already shows the new limit as effective 1 April 2026, but we have not confirmed that the law has been enacted. Check SARS for the latest.

• SARS — Turnover Tax (rates, who qualifies, how to pay)
• SARS — Tax Guide for Micro Businesses
• SARS — FAQs on Turnover Tax
• SARS — Budget 2026 Frequently Asked Questions
• National Treasury — 2026 Budget Review (Tables 4.6 and 4.7)