Sole proprietor vs company tax calculator

See the estimated tax on the same profit run two ways. Facts and sums only: it does not tell you which route to take.

Estimated tax as a sole proprietor

R 132 907

Estimated tax through a company, all taxes: R 249 600
You keep as a sole proprietor: R 467 093
You keep through a company: R 350 400
Left in the company: R 0

This compares tax only. It does not say which route suits you. Registration, accounting costs, UIF, SDL, provisional tax and your own situation are not included.

Estimates only. Not financial advice.

The two routes side by side

Estimated yearly tax: sole proprietor and company
Item	Sole proprietor	Company
Company tax	–	R 162 000
Tax on your salary	–	R 0
Dividends tax	–	R 87 600
Personal income tax on the profit	R 132 907	–
Total tax	R 132 907	R 249 600
Tax as a share of profit	22.2%	41.6%
You keep	R 467 093	R 350 400
Left in the company	–	R 0

How the sole proprietor vs company tax calculator works

Last updated 10 November 2026

The same profit can be taxed in two different ways, depending on whether you trade in your own name or through a company. This calculator works out the estimated tax each way, using the rates in force for the current tax year.

How it works

As a sole proprietor, the profit counts as your income and is taxed with the personal tax table, less the rebate.
Through a company, the company pays tax first (27% at the standard rate, or the small business table if you tick that box).
Any salary the company pays you is a cost to the company and is taxed as your income. A dividend is taxed at 20%.
Profit you leave in the company is not paid out yet, so no dividends tax is due on it now.

Worked example

With the starting figures:

A profit of R 600 000 taxed in your own name gives estimated tax of R 132 907.
Through a company the company tax is R 162 000 and the dividends tax is R 87 600, so the total is R 249 600.

Why the two routes give different results

A sole proprietor pays tax once, but the rate climbs as profit grows. A company pays a flat rate on its profit and then the owner may pay again when money comes out. Where the profit sits, how much comes out and when all change the answer. That is why the tool lets you set a salary and a share paid out.

The small business corporation table

SARS publishes a lower set of company tax rates for qualifying small business corporations. Not every company qualifies. Read the conditions on the SARS page before you tick the box, as the tool cannot check them for you.

What the numbers leave out

Real life has more in it. Registration and annual costs, bookkeeping, UIF and SDL on a salary, provisional tax, retirement contributions and medical credits all affect the final figure. So do special rules that apply to some service businesses. Treat the output as a rough guide to the size of the tax, not a plan.

What to do with the result

Use it to ask better questions of an accountant. The related take-home pay calculator shows how personal tax works on a salary, and the VAT calculator covers the other tax most small businesses meet.

Things to watch

Rates are for the current tax year. They change in most Budgets.
The tool assumes an owner under 65 with no other income.

Read the full disclaimer. This page gives facts and estimates, not tax advice.

Questions people ask

What is the difference in how the two are taxed?

A sole proprietor’s profit is the owner’s income and is taxed at personal rates. A company pays its own tax first (27% at the standard rate), and a dividend paid to the owner is taxed again at 20%, unless an exemption or a reduced rate applies.

What is a small business corporation?

A company that meets conditions set by SARS can use a lower table of company tax rates. We did not find the full conditions on the page we read, so the tool asks you to check them with SARS before you use that table.

Does this tell me which one to choose?

No. It only shows an estimate of tax on one set of numbers. Costs, risk, liability, admin and your plans all matter, and so does professional advice.

What is left out?

Registration and accounting costs, UIF, SDL, provisional tax payments, retirement contributions, medical credits, interest and dividend exemptions, and anything specific to your situation. The tool assumes an owner under 65.

Is anything stored?

No. Your numbers stay in the page.

Figures last checked on 10 November 2026 for the 2026/27 tax year. Sources: SARS: Companies, trusts and small business corporations, SARS: Dividends tax, SARS: Rates of tax for individuals.

Estimates only, based on 2026/27 figures. Not financial advice. Read the full disclaimer.