The 2026 Budget Speech has brought some long-awaited breathing room! For the first time in two years, SARS has adjusted personal income tax brackets and medical tax credits to help combat “bracket creep.”
What does this mean for your payroll? Effective from 1 March 2026, the new tables include:
- Bracket Adjustments: Tax brackets have been shifted upward by 3.4% to align with inflation. This means you can earn a bit more before jumping into a higher tax percentage.
- Higher Thresholds: The tax-free threshold for individuals under 65 has increased to R99,000.
- Medical Credit Boost: Monthly tax credits for medical scheme members have seen a slight increase (now R376 for the first two members).
- Retirement Savings: The annual limit for tax-deductible retirement contributions has been raised to R430,000.
Navigating these changes manually is a recipe for compliance headaches. At Pay Solutions, we’ve already updated our systems to ensure every payslip you issue is accurate and fully compliant with the latest legislation.
Let us take the guesswork out of the new tax year.
Want to dig deeper into the new tax tables? You can read a full breakdown of the latest updates and what they mean for your business from Rob Nowicki and Associates here:
