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Provisional tax explained
What is provisional tax? How and when do I pay it?
Provisional tax is paid twice a year by individuals who earn additional taxable income other than salary/wage income
What is provisional tax?
Provisional tax is paid by people who earn income other additional taxable income other than salary / wage income paid by an employer.
If you earn non-salary income, for example rental income from a property or other income from a trade or small business you run, you will be a provisional taxpayer (even if you still earn a salary). Some exceptions and thresholds do apply though, so click here for more information on the applicable thresholds. For an easy way to find out if you must register as a provisional taxpayer, click here. If you just earn a salary then you are a regular taxpayer and don't have to worry about filing provisional tax returns!
When do I have to pay it?
One payment by end of August (mid tax season) A second payment by end of February (end of tax season) *Optional* third payment at end of September (seven months after tax season closes) ONLY if amount paid in previous payments was insufficient.
Regular taxpayers make their tax contributions monthly via PAYE deducted from their salaries. They submit one tax return every year at the end of June. - Individual Income Tax Return (Brown or Blue form). Don’t worry about whether you need to submit a Brown or Blue form, TaxTim will help you! Since provisional taxpayers earn money from other sources, they have to submit provisional tax returns and make additional payments to Inland Revenue.
Inland Revenue wants provisional taxpayers to avoid paying one large chunk of tax in February, so two (or optionally three) payments are made during the year in August and February. This is achieved through the submission of a Provisional Tax Return for each of the periods.
The tax paid from the first and second payments is then credited against any tax owing at the end of tax season, and can be refunded by Inland Revenue if too much was paid. Provisional taxpayers also need to submit an Annual Individual Income Tax Return (Yellow Form) every year. The due date for this is 30 September each year.
TaxTim can help to complete your provisional tax returns online. Do your provisional returns now by following this link: Do a provisional return now!