Will I get a tax refund on my bonus?

Possibly. The annualisation method assumes you earn the combined salary-plus-bonus amount for the full year. If you did not, SARS will reconcile this in your annual tax assessment and may issue a refund. Always submit your annual tax return to claim back any over-deducted PAYE.

Is a 13th cheque taxed differently from a performance bonus?

No. Both a 13th cheque and a performance bonus are treated as income and taxed using the same SARS annualisation method. The only difference is timing — a 13th cheque is predictable and declared in advance, while a performance bonus may be variable. Both appear on your IRP5.

Is a 13th cheque taxable in South Africa?

Yes. A 13th cheque (or any guaranteed annual bonus) is taxable income subject to PAYE at your marginal rate. There is no special tax treatment for 13th cheques — they are taxed the same as a performance bonus or any other additional remuneration.

How do I reduce tax on my bonus in South Africa?

The most effective legal way is to increase your retirement annuity contribution in the bonus month. RA contributions reduce taxable income up to 27.5% of remuneration (max R350,000/year). You can make a lump sum RA contribution that directly offsets some or all of the bonus tax.

Bonus Tax Calculator South Africa 2026

Calculate exactly how much tax you pay on your 13th cheque or performance bonus — using the official SARS 2026/2027 annualisation method. See your net bonus instantly.

That moment when your bonus hits your payslip — and it is far less than expected. This calculator uses the official SARS method to show you exactly how your bonus is taxed, what you will actually receive, and your effective bonus tax rate.

Enter Your Details

Monthly gross salary (R) Your regular salary — not including the bonus

Bonus / 13th cheque amount (R) The gross bonus before any deductions

Your age group Determines your SARS rebate amount

Months worked this tax year For accuracy if you started mid-year

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Enter your monthly salary and bonus amount above to calculate your bonus tax.

How Bonuses Are Taxed in South Africa

SARS does not tax bonuses at a separate flat rate. Instead, your employer uses the annualisation method — also called the balance of remuneration method. Your bonus is added to your annual income and the total tax is recalculated. The difference between your tax with and without the bonus is the PAYE deducted from your bonus.

This means your bonus is effectively taxed at your marginal tax rate — the rate that applies to the highest portion of your income. If your annual salary puts you in the 26% bracket, most of your bonus will be taxed at 26%, with any portion that pushes you into the 31% bracket taxed at 31%.

The SARS Annualisation Method — Step by Step

/* Step 1 — Annual tax WITHOUT bonus */ Annual income = Monthly salary × 12 Tax A = PAYE on annual income (using SARS brackets minus rebate) /* Step 2 — Annual tax WITH bonus */ Annual income + bonus = Monthly salary × 12 + bonus amount Tax B = PAYE on combined income (using SARS brackets minus rebate) /* Step 3 — Bonus tax */ Bonus tax = Tax B − Tax A /* Step 4 — Net bonus */ Net bonus = Gross bonus − Bonus tax

Worked Example — R25,000 salary + R25,000 bonus

Item	Amount
Annual salary (R25,000 × 12)	R 300,000
Annual tax on salary alone	R 40,572
Annual salary + bonus (R300,000 + R25,000)	R 325,000
Annual tax on combined income	R 47,072
Bonus tax (R47,072 − R40,572)	R 6,500
Gross bonus	R 25,000
Net bonus (take-home)	R 18,500
Effective bonus tax rate	26%

Will You Get a Tax Refund on Your Bonus?

Possibly — and this is where many South Africans leave money on the table. The annualisation method projects your bonus-month income across the full year. If you received the bonus in one month but your regular salary is lower the rest of the year, SARS may have over-withheld.

When you submit your annual tax return, SARS reconciles your total actual income with your total tax paid. If more was withheld than owed, you receive a refund. Always submit your tax return — many salaried employees skip it, not realising they are owed money back.

Frequently Asked Questions

How is a bonus taxed in South Africa?

SARS uses the annualisation method. Your bonus is added to your projected annual income and tax is recalculated on the total. The bonus tax is the difference between your tax with and without the bonus. It is taxed at your marginal rate — not a separate flat rate.

Can I reduce the tax on my bonus?

Yes — by contributing more to a retirement annuity (RA) in the same tax year. RA contributions reduce your annual taxable income before tax is calculated. Increasing your RA contribution in a bonus month directly reduces the tax owed on that bonus. Up to 27.5% of gross income (max R430,000 per year) qualifies as a deduction.

Is a 13th cheque the same as a bonus for tax purposes?

Yes. Both a 13th cheque and a performance bonus are treated identically for PAYE purposes — both are added to annual income and taxed at the marginal rate using the annualisation method. Both appear on your IRP5 as employment income.

Related Calculators

Commonly used with the Bonus Tax Calculator:

Read our guide: RA Tax Benefits — How Much Does a Retirement Annuity Save? to see how RA contributions reduce your PAYE bill.

Earn variable income? The Commission Tax Calculator shows how SARS taxes commission income versus a fixed salary.

Growing your retirement savings? The Provident Fund Calculator shows how employer contributions and tax savings compound over time.

Disclaimer: This calculator uses the SARS annualisation method with 2026/2027 tax brackets. Actual tax deducted by your employer may differ depending on your year-to-date income, prior deductions, and payroll system. Always verify with your payslip and consult a tax practitioner for personalised advice. Read full disclaimer →