Salary Sacrifice Calculator South Africa 2026
See how salary sacrifice reduces your SARS PAYE tax in South Africa. Calculate tax savings from pension contributions, medical aid, and travel allowance restructuring. Uses 2025/2026 SARS tax brackets.
Quick Calculator Get a fast estimate
R
Your total gross remuneration before any deductions
R
Amount to redirect pre-tax (e.g. pension contribution)
Annual Tax Saved
R 14 880
Before: Annual Net Pay
R 385 928
After: Annual Net Pay
R 352 808
Net Benefit (after sacrifice)
R 14 880
Monthly Tax Saving
R 1 240/month
Marginal Tax Rate
31%
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How Salary Sacrifice Works in South Africa
Salary sacrifice means structuring your remuneration so that part of your gross salary goes to tax-deductible benefits before PAYE is calculated. The most common types in SA are:
- Pension / Retirement Annuity: Up to 27.5% of remuneration (max R350,000/year) is tax-deductible
- Medical Aid: Not a direct deduction, but generates tax credits of R364/month per member and first dependant
- Travel Allowance: 20% excluded from tax; remaining 80% is taxable (logbook required to claim more)
Tax Saving = Marginal Tax Rate × Deductible Sacrifice Amount
Net Cost = Sacrifice Amount − Tax Saving
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Extended Calculator More options, charts, and scenario comparison
R
R
Max deductible: R 132 000/year (27.5% or R350k)
%
80% taxable, 20% excluded. Only beneficial with logbook records.
Annual Tax Saved
R 19 248/year
Before: Net Pay
R 381 128/yr (R 31 761/mo)
Before: PAYE
R 94 072/yr
After: Net Pay (incl. pension)
R 352 376/yr (R 29 365/mo)
After: PAYE
R 74 824/yr
Net Pay Change
R -28 752/yr
Marginal Tax Rate
31%
Pension Room Remaining
R 84 000/yr
Pay breakdown before vs after salary sacrifice (annual, Rand)
Marginal rate impact: At 31% marginal rate, each R1,000 extra pension sacrifice saves R310 in tax, costing only R690 in take-home pay.
SA Salary Sacrifice Rules (2025/2026)
| Benefit Type | Tax Treatment | Limit | Best For |
|---|---|---|---|
| Pension / Provident Fund | Deductible from taxable income | 27.5% of income, max R350k/year | Anyone paying 31%+ marginal rate |
| Retirement Annuity (RA) | Deductible from taxable income | Same as pension | Self-employed, no employer fund |
| Medical Aid | Tax credits (not deduction) | No limit on contributions | All — credits reduce tax directly |
| Travel Allowance | 20% tax-free; 80% taxable | Max SARS deemed rate for distance | Employees with business travel + logbook |
Worked Example: R480,000 Salary, 27.5% Pension
Employee: Age 40, R480,000 gross salary, pension R48,000/year, medical member only
Before sacrifice:
Taxable income: R480,000
Gross PAYE: R121,475 + 36% × (R480,000 − R512,800) = approximately R109,475
Less primary rebate: R17,235 → PAYE: approximately R92,240
Monthly net: (R480,000 − R92,240) ÷ 12 = R32,313/month
After pension sacrifice R48,000:
Taxable income: R480,000 − R48,000 = R432,000
PAYE on R432,000: approximately R75,482 − R17,235 = R58,247
Tax saving: R92,240 − R58,247 = R33,993/year (R2,833/month)
Net pay: (R480,000 − R48,000 − R58,247) ÷ 12 = R31,146/month
Cost of R4,000/month pension: only R1,167/month in take-home pay
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Professional Calculator Complete parameters, sensitivity analysis, and detailed breakdown
Full Remuneration Package
R
R
Max deductible: R 165 000/yr
R
Part of CTC, not taxed separately
R
R
%
80% is taxable. Track with a logbook.
CTC Breakdown
Gross SalaryR 600 000
Employer Pension (CTC)R 30 000
BonusR 30 000
Total CTCR 660 000
Employee Pension / RA−R 60 000
PAYE−R 98 816
UIF−R 6 000
Medical Aid (own)−R 30 000
Annual Net PayR 315 184
Monthly Net PayR 26 265
Effective Tax Rate16.5%
Marginal Rate36.0%
Med Aid Tax Credits−R 8 736/yr
Pension Optimiser
5-Year Salary & Tax Projection (8% increase/yr)
| Year | Gross Salary | Annual PAYE | Net Pay/yr | Net/month |
|---|---|---|---|---|
| Year 0 (now) | R 600 000 | R 98 816 | R 315 184 | R 26 265 |
| Year 1 | R 648 000 | R 113 850 | R 335 670 | R 27 973 |
| Year 2 | R 699 840 | R 130 086 | R 357 796 | R 29 816 |
| Year 3 | R 755 827 | R 147 621 | R 381 691 | R 31 808 |
| Year 4 | R 816 293 | R 167 674 | R 406 383 | R 33 865 |
| Year 5 | R 881 597 | R 189 832 | R 432 550 | R 36 046 |
Frequently Asked Questions — Salary Sacrifice SA
Salary sacrifice in South Africa means redirecting part of your gross salary to pre-tax benefits (pension, travel allowance) that reduce your taxable income. Because PAYE is calculated on the lower taxable income, you pay less tax. At a 36% marginal rate, a R4,000/month pension sacrifice costs only R2,560/month in take-home pay while R4,000 goes into your retirement fund.
SARS allows pension/provident/RA deductions up to 27.5% of the greater of remuneration or taxable income, capped at R350,000/year. For a R480,000 salary: 27.5% = R132,000 (well below R350k cap), so the limit is R132,000 (R11,000/month maximum deductible pension).
80% of your travel allowance is included in taxable remuneration for PAYE. Only 20% is excluded. However, if you maintain a SARS-compliant logbook, you can claim actual business kilometres at the deemed rate (R4.77/km in 2026) at annual assessment, potentially recovering significant amounts. Without a logbook, the 80% inclusion is final.
Medical Aid Tax Credits for 2026: R364/month main member, R364/month first dependant, R246/month each additional dependant. A family of four saves R1,228/month (R14,736/year) in PAYE — these are deducted directly from tax payable, making them highly valuable regardless of marginal tax rate.
Yes — remuneration restructuring within SARS rules is legal tax planning. You can maximise deductible pension contributions (up to 27.5%), include medical aid in your CTC, and utilise travel allowances with logbook support. Anti-avoidance provisions apply to artificial arrangements, but legitimate remuneration structuring with a qualified tax practitioner is perfectly legal and commonly practised in South Africa.