How the tax-year planner works
Last updated 10 November 2026
Two things reduce your tax bill if you act before the tax year ends: contributions to a retirement annuity or fund, and the tax credit for medical scheme fees. A tax-free savings account does not cut tax now but shelters growth, and has strict limits.
How it works
- Retirement deduction limit = the lower of 27.5% of your taxable income before the deduction and the yearly cap.
- Room left = limit minus what you have already contributed.
- Tax saved = tax on your income now minus tax after the extra deduction, using the SARS tax tables and your age rebate.
- Tax-free savings room = the lower of the yearly limit and the lifetime limit, minus what you have put in.
Worked example
With the starting figures:
- The deduction limit is R 165 000, so R 105 000 of room is left after the contributions entered.
- An extra R 40 000 would save about R 12 890 in tax.
- You could still put R 26 000 into a tax-free savings account this tax year.
How to read your result
The headline is the tax you would save if you added the extra retirement annuity amount. The rows below show the room you have left under the deduction limit, how much of the extra amount counts, the tax saved for each rand added, your remaining tax-free savings room and the medical scheme fees tax credit.
If the extra amount is larger than the room left, only part of it counts, and the calculator shows that part as a separate row. The tax saved for each rand tells you how much of every rand added comes back as lower tax. It is an average across the amount used, so it can change if the amount changes.
A closer look at the retirement deduction
The deduction is limited to the lower of a share of your income and a yearly cap. Both figures come from the rates the calculators use, so they update when SARS changes them. Contributions to a pension fund, provident fund and retirement annuity can all count towards the same limit.
Your employer’s contributions may also count, if they are taxed as part of your income. If you are unsure what your payslip shows, ask your payroll or fund administrator. Money you put into a retirement annuity is generally locked in until retirement, so the tax saving comes with a trade-off.
Tax-free savings and the medical credit
- Tax-free savings: interest, dividends and growth inside the account are not taxed, but deposits are limited each year and over your lifetime. The room left is the lower of the two, after what you have already put in.
- Medical scheme credit: this is a fixed amount for each month, set for you and each dependant. It reduces your tax. It is not a deduction from your income, and it does not depend on how much you earn.
- Age: the planner uses your age band to pick the rebate, because the rebate changes the tax you start from.
What this does not cover
The planner looks at one tax year and uses the figures you enter. It does not know your other deductions, travel allowance, capital gains, interest income or any tax already paid. The tax saved is an estimate, and your actual assessment from SARS may differ. A tax practitioner can look at your whole situation.
Things to watch
- Putting money into a retirement annuity locks it away until retirement, with limited exceptions.
- More than the tax-free savings limit is taxed at 40% of the excess.
- This is not advice. A tax practitioner can look at your whole situation.
See also the retirement annuity tax calculator and tax-free savings calculator. Read the full disclaimer.
Like every tool on MoneyMzansi, this one runs in your browser and nothing you enter is stored or sent.