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News and Updates

Taxation on retirement fund contributions

The Taxation Laws Amendment Act No. 25 of 2015 that was published in Government Gazette No. 39588 on 8 January 2016 confirms the changes to the tax treatment of contributions from 1 March 2016.

BEFORE 1 MARCH 2016

Pension and retirement annuity (RA) fund members - Tax deduction of up to 7,5% of retirement-funding employment (pension
fund) and 15% of non-retirement-funding employment (RA)

Provident fund members - NO monthly tax deduction

 

FROM 1 MARCH 2016

From 1 March 2016, you will pay tax every month on the contributions that your employer pays towards your retirement fund.

You will at the same time get a tax deduction on both your own and your employer’s contributions to a pension or provident fund. You will get a tax deduction on you RA contribution at the end of the tax year. This deduction cannot be more than 27,5% of the higher of your salary or your taxable income and it cannot be more than R350 000 per year.

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