If you’re a provisional taxpayer, August is one of the most important tax deadlines of the year.
The good news is that most of the provisional tax system hasn’t changed. However, there are a few important developments for the 2027 tax year that are worth knowing about.
At By Numbers, we believe every tax return tells a story. Rather than simply updating last year’s figures, we take the time to understand what has changed in your business and your life. That’s how we prepare more accurate provisional tax estimates and help you avoid unnecessary surprises.
Is this article for you?
This article is relevant if you earn income from:
- Running your own business
- Freelancing or consulting
- Rental property
- Investments
- Foreign income
- Any other income that is not fully taxed through PAYE
If any of these apply to you, it’s worth understanding your provisional tax obligations before the August deadline.
What is provisional tax?
Provisional tax is not another tax.
It is simply a way of paying your income tax during the year instead of paying everything when your annual tax return is assessed.
Generally, you’re a provisional taxpayer if you earn taxable income that is not fully subject to PAYE.
This commonly includes:
- Business profits
- Freelance or consulting income
- Rental income
- Investment income
- Foreign income
- Remuneration from an employer that is not registered for PAYE
What’s changed for the 2027 tax year?
While the fundamentals remain the same, there are several important developments worth noting.
- Proposed changes to the underestimation rules
The 2026 Draft Tax Administration Laws Amendment Bill proposes increasing the threshold used in the provisional tax underestimation rules from R1 million to R1.8 million.
If enacted, more taxpayers could qualify for the less restrictive “basic amount” rules when calculating their provisional tax estimates.
Please note: At the date of publication, these amendments remain draft legislation. We are monitoring the progress of the Bill and will update this article once the legislation has been finalised.
- Paying on time matters more than ever
The draft legislation also proposes tightening the underestimation penalty rules.
Historically, much of the focus has been on whether your estimate was reasonable.
The proposed amendments place greater emphasis on ensuring the payment is made on time.
Simply put: A reasonable estimate is important.
Paying the tax by the due date is equally important.
Leaving payment until after the deadline could expose you to additional penalties, even where your estimate itself was reasonable.
- SARS continues expanding Auto-Assessments
SARS continues expanding the use of third-party information and Auto-Assessments.
As a result, many provisional taxpayers will notice more information already reflected on their annual income tax returns.
SARS now receives information directly from:
- Employers
- Banks
- Investment providers
- Medical schemes
While this reduces administration, it does not mean everything is correct.
You remain responsible for ensuring that all income, deductions and taxable transactions have been correctly reported.
- More information is now pre-filled
SARS continues to expand the information automatically available on tax returns, including:
- Interest income
- Investment income
- Medical aid information
- Retirement fund information
- Employer information
This makes filing easier, but reviewing your tax return carefully remains just as important.
- Tax thresholds have increased
The personal income tax thresholds have increased slightly for the 2027 tax year.
For individuals who do not carry on a business, you may not be regarded as a provisional taxpayer if your taxable income remains below the applicable threshold.
Current thresholds are:
| Age | Annual Tax Threshold |
| Under 65 | R99,000 |
| 65 to under 75 | R153,250 |
| 75 and older | R171,300 |
What hasn’t changed?
The fundamentals remain exactly the same.
You still need to:
- Estimate your taxable income for the year.
- Submit your IRP6 return on time.
- Pay provisional tax by the deadline.
- Tell us if your income changes during the year.
The biggest mistake we see every year is assuming this year’s income will look much like last year’s.
A new consulting contract, rental property, investment sale, capital gain or bonus can significantly change your provisional tax position.
Five common provisional tax mistakes
- Underestimating your income
If your actual taxable income is significantly higher than your estimate, SARS may impose an underestimation penalty.
- Relying on last year’s numbers
Your estimate should reflect what is happening this year, not simply repeat last year’s figures.
- Paying late
An accurate estimate alone isn’t enough. Missing the payment deadline can still result in penalties and interest.
- Forgetting about capital gains
Selling an investment property, shares or other assets during the year may increase your taxable income and should be considered when preparing your provisional tax estimate.
- Waiting until the last minute
Preparing a good provisional tax estimate takes time.
The earlier we understand what’s changed in your financial year, the more accurately we can prepare your estimate.
Important 2027 provisional tax dates
31 August 2026
First provisional tax return and payment
26 February 2027
Second provisional tax return and payment
30 September 2027
Optional top-up payment to reduce interest
Our recommendation: Please send us your information at least two weeks before the deadline. This gives us enough time to prepare an accurate estimate, discuss any significant tax implications and avoid unnecessary last-minute pressure.
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What we need from you
To prepare your provisional tax estimate accurately, we’ll usually need:
- Your latest management accounts or income information
- Details of any new income sources
- Rental income and expenses
- Investment income
- Capital gains or asset sales
- Any significant changes expected before year-end
Good records lead to better estimates and fewer surprises.
Need help with your provisional tax?
Every client’s tax position is different.
Whether you’re running a business, earning rental income, consulting or managing investments, we’ll help you prepare an accurate provisional tax estimate and keep you compliant with SARS.
If you’re unsure whether you’re a provisional taxpayer—or your income has changed during the year—we’d be happy to help.
Book a consultation with the By Numbers team before the August deadline and let us help you prepare with confidence.
By Numbers Tip
Every provisional tax return tells a story.
The numbers are important but understanding why they’ve changed helps us prepare better estimates, reduce tax surprises and make informed financial decisions.
That’s how we help create space in your pocket, your life and your soul.