Provisional tax allows taxpayers to pay their tax liability in advance, spreading payments across the year rather than paying a lump sum at year-end. Companies, trusts, and individuals with income other than employment salary must register and pay provisional tax.
Who Must Pay Provisional Tax
You must register as a provisional taxpayer if you:
- Are a company or close corporation (mandatory)
- Are a trust earning income
- Earn income from sources other than salary (rental, business, investments)
- Receive income not subject to PAYE withholding
Exemptions
You are NOT required to pay provisional tax if:
- You earn salary/wages only (covered by PAYE)
- Your taxable income is below the tax threshold
- You are a public benefit organisation (PBO)
- You are a small business corporation with turnover under R1 million (may use turnover tax instead)
Payment Dates
February Year-End (Most Companies)
| Payment | Due Date | Based On |
|---|---|---|
| 1st Provisional (IRP6) | 31 August | Estimate for full year |
| 2nd Provisional (IRP6) | 28/29 February | Refined estimate |
| 3rd Payment (Top-up) | 30 September | Final actual taxable income |
Other Year-Ends
If your financial year-end is not February:
- 1st Payment: Within 6 months after year-end
- 2nd Payment: At year-end
- 3rd Payment: 7 months after year-end
Calculating Your Payment
Basic Calculation Method
- Estimate your taxable income for the year
- Apply the applicable tax rate
- Subtract any credits (e.g., foreign tax credits)
- For the 1st payment: Pay 50% of estimated tax
- For the 2nd payment: Pay remaining balance
Estimation Rules
Your estimate should consider:
- Current year's performance to date
- Expected contracts or sales
- Anticipated expenses and deductions
- Previous year's actual taxable income (as baseline)
Filing the IRP6
Step-by-Step Guide
- Log into SARS eFiling
Go to www.sarsefiling.co.za
- Navigate to Returns
Go to Returns → Provisional Tax → IRP6
- Select Tax Period
Choose the correct year of assessment
- Enter Estimated Income
Fill in estimated taxable income, deductions, and capital gains
- Review Calculation
System calculates tax due. Verify the amount.
- Submit Return
Submit and download acknowledgment
- Make Payment
Pay via eFiling, EFT, or at a bank
Penalties
Underestimation Penalties
If your estimate is less than 80% of actual taxable income:
- Interest charged on underpaid amount
- Penalty of 20% of the underestimated tax (in some cases)
- Additional interest at the prescribed rate
Late Payment Penalties
- Interest: Charged from due date at prescribed rate (currently ~10.75% p.a.)
- Penalty: 10% of unpaid tax if more than R50 overdue
- Additional: 1% per month for continued non-payment
Tips for Compliance
- Set Calendar Reminders: Mark payment dates 2 weeks in advance
- Use Conservative Estimates: Better to overestimate slightly than face penalties
- Keep Management Accounts Updated: Monthly financials help estimate accurately
- Consider a Provisional Tax Account: Set aside funds monthly for tax payments
Frequently Asked Questions
What if my company has a loss?
You must still file the IRP6, but your taxable income will be zero or negative. No payment is due, but filing is mandatory.
Can I get a refund if I overpaid?
Yes. When you file your annual tax return (IT14), SARS will calculate if you're due a refund. Refunds are processed after assessment.
What's the difference between IRP6 and IT14?
IRP6 is the provisional tax return (estimates, paid during the year). IT14 is the annual income tax return (actual figures, filed after year-end).
Next Steps
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