How bonus tax works in South Africa
In South Africa a bonus is ordinary income. A 13th cheque, a performance bonus and a once-off discretionary payment are all taxed with the same brackets as your salary. What makes a bonus feel heavily taxed is where it lands: on top of your salary, in your highest bracket, with the whole year's tax on it collected in one month. The calculator above follows the method payroll uses, and the tables below apply it to a range of bonus sizes and salaries.
Worked example: a R 30 000,00 13th cheque
Take an employee aged 30 earning R 30 000,00 a month who receives a 13th cheque equal to one month's salary. Using the 2026/2027 tax tables:
- Annual salary is R 360 000,00. Income tax on that, after the primary rebate, is R 56 172,00 a year, or R 4 681,00 a month. That is an average rate of 15.6%.
- Adding the bonus takes annual income to R 390 000,00, and the tax for the year rises to R 64 317,00.
- The difference, R 8 145,00, is the PAYE on the bonus. Of the bonus, R 23 100,00 falls in the 26% bracket and R 6 900,00 falls in the 31% bracket.
- The employee keeps R 21 855,00 of the bonus, an effective tax rate of 27.1%. In the month it is paid, PAYE on the payslip is R 12 826,00 instead of the usual R 4 681,00.
That rate is higher than the 15.6% average on the salary, because none of the bonus benefits from the lower brackets or the rebate.
Bonus after tax on your salary (2026/27)
For your inputs above, a monthly salary of R 25 000,00 at age 30:
| Bonus | Tax on bonus | Bonus after tax | Effective rate | Top marginal rate |
|---|---|---|---|---|
| R 12 500,00 (0.5x salary) | R 3 250,00 | R 9 250,00 | 26.0% | 26% |
| R 25 000,00 (1x salary) | R 6 500,00 | R 18 500,00 | 26.0% | 26% |
| R 50 000,00 (2x salary) | R 13 000,00 | R 37 000,00 | 26.0% | 26% |
| R 75 000,00 (3x salary) | R 19 500,00 | R 55 500,00 | 26.0% | 26% |
| R 150 000,00 (6x salary) | R 42 345,00 | R 107 655,00 | 28.2% | 31% |
Tax on a 13th cheque at different salaries
A one-month 13th cheque is taxed more heavily as salaries rise, because it sits in a higher bracket. Each row uses age 30:
| Monthly salary | Tax on 13th cheque | 13th cheque after tax | Effective rate |
|---|---|---|---|
| R 10 000,00 | R 1 800,00 | R 8 200,00 | 18.0% |
| R 20 000,00 | R 4 792,00 | R 15 208,00 | 24.0% |
| R 30 000,00 | R 8 145,00 | R 21 855,00 | 27.1% |
| R 50 000,00 | R 18 000,00 | R 32 000,00 | 36.0% |
| R 80 000,00 | R 32 800,00 | R 47 200,00 | 41.0% |
| R 150 000,00 | R 64 356,00 | R 85 644,00 | 42.9% |
Why the PAYE on your bonus looks so high
Most people compare their bonus deduction with the PAYE on a normal month. But normal monthly PAYE benefits from the lower brackets and the R17,820 primary rebate, and the bonus benefits from neither. It is taxed at the rate of the bracket it lands in, and the whole year's tax on it comes off one payslip instead of twelve. That does not mean you have been overtaxed: PAYE is a prepayment, and your final tax is settled when SARS assesses your return.
The annualisation method, step by step
SARS requires employers to treat a bonus as an annual payment rather than regular pay. In practice, payroll works through these steps in the month the bonus is paid:
- Work out the annual equivalent of your regular pay: monthly taxable remuneration multiplied by 12, after deductions such as retirement fund contributions.
- Calculate the tax for the year on that annual equivalent, less your rebates.
- Add the bonus to the annual equivalent. The bonus is not multiplied by 12.
- Calculate the tax for the year on the new total, less your rebates.
- Deduct the difference between the two amounts as PAYE on the bonus, in addition to the normal PAYE for the month.
13th cheque vs performance bonus
A 13th cheque is usually a guaranteed extra month's pay, often paid in November or December and written into the employment contract. A performance bonus depends on targets, company results or management discretion. For tax they are identical: both are remuneration and both use the method above. The difference is contractual, since a guaranteed 13th cheque can be claimed under your contract. Some annual cost to company figures already include a 13th cheque, so check before comparing offers in the CTC Calculator.
Tax on a bonus is not a separate tax rate
A bonus uses the same 2026/2027 brackets as your salary, which run from 18% to 45%. Crossing into a higher bracket only affects income above the threshold, so a bonus can never leave you with less money than you had without it. See every bracket on our SARS tax tables page.
Lump sums are different. Retirement fund withdrawals and severance benefits have their own lump sum tables, and the Severance Pay Calculator applies them to a severance package. UIF is also deducted from a bonus, but only up to the monthly earnings ceiling of R17,712, so an employee who already earns more than that pays no extra UIF on a bonus (see the UIF Calculator).
How this calculator works
- Your monthly salary is treated as your regular pay for the full 2026/2027 tax year, with no retirement fund or other deductions.
- Your age sets the rebates and tax threshold: the primary rebate of R17,820, plus R9,765 from age 65 and a further R3,249 from age 75.
- Medical scheme fees tax credits are left out. They reduce PAYE on your salary but not the tax on the bonus.
- Payroll may differ slightly if your salary changed during the year. For your full monthly picture, use the Salary Calculator or the PAYE Calculator.
Frequently Asked Questions
How is tax on a bonus calculated in South Africa?
Employers use the annual equivalent method. Payroll works out the tax on your regular salary for a full year, then the tax on that same annual salary plus the bonus. The difference is the PAYE on the bonus, deducted in full in the month it is paid. The bonus itself is not multiplied by 12.
Is a 13th cheque taxed differently from a performance bonus?
No. A 13th cheque, a performance bonus and a discretionary bonus are all remuneration, and PAYE on each is worked out the same way. The only difference is whether your employer is obliged to pay it, which depends on your contract.
Why is so much tax taken off my bonus?
Two things combine. The bonus sits on top of your salary, so it is taxed at your highest marginal rate rather than your average rate. And the full year's tax on the bonus is collected in a single month. In the worked example on this page, someone earning R 30 000,00 a month normally pays R 4 681,00 PAYE, but R 12 826,00 in the month a R 30 000,00 bonus is paid.
Does a bonus push all my salary into a higher tax bracket?
No. South Africa uses marginal tax brackets, so only the part of your income above a bracket threshold is taxed at the higher rate. The salary below the threshold is taxed exactly as before, and only the slice of the bonus above it attracts the higher rate.
Is there a special tax rate for bonuses?
No. A bonus is taxed using the ordinary 2026/2027 income tax brackets, the same ones that apply to your salary. The separate lump sum tables apply to retirement fund withdrawals and severance benefits, not to bonuses.
Will I get some of my bonus tax back from SARS?
Only if too much PAYE was deducted over the year. PAYE is a prepayment of your income tax, and SARS works out your final liability when you file your return. You may get a refund if you have deductions your employer did not take into account, such as retirement annuity contributions or qualifying medical expenses.
Can I reduce the tax on my bonus?
Contributions to a pension, provident or retirement annuity fund are deductible up to 27.5% of the greater of your remuneration or taxable income, capped at R430,000 a year, so a lump-sum contribution can reduce the tax on a bonus. Some employers let you direct part of a bonus into the company retirement fund through payroll. Donations to approved public benefit organisations with a section 18A receipt are deductible up to 10% of taxable income.
Does my employer have to pay a bonus or 13th cheque?
The Basic Conditions of Employment Act does not require employers to pay a bonus. Whether you are entitled to one depends on your employment contract and any company bonus policy. A 13th cheque written into your contract is part of your agreed pay and must be paid on those terms, including any pro rata rules if you join or leave during the year.
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