Tax • Provisional Tax • NHB Business
Two Weeks to 31 August: Here's What Provisional Tax Actually Needs From You
Provisional tax can feel more complicated than it needs to be. With the deadline approaching, the important thing is to understand what SARS actually needs from you, prepare a realistic estimate and leave enough time to submit and pay.
By Nicole Holborow-Browne • NHB Business
First: What Is Provisional Tax?
Provisional tax is not a separate tax. It is a system that allows taxpayers to pay income tax in instalments during the tax year rather than facing one large tax bill later.
The calculation is based on an estimate of taxable income, so the quality of that estimate matters.
Who May Need to Submit?
Provisional tax can apply to people and entities earning income that is not fully covered by PAYE. This may include sole proprietors, freelancers and consultants, people earning rental or qualifying investment income, as well as companies and trusts.
If you are already registered as a provisional taxpayer, do not assume that no income means no submission. A nil IRP6 may still be required.
What Does the Estimate Actually Need From You?
A useful starting point is your basic amount — the taxable income reflected by SARS from a previous assessment. From there, consider what is actually happening in the current tax year.
1. Work Out Your Estimated Income
Look at what you have earned so far and what you realistically expect to earn for the remainder of the tax year.
2. Account for Allowable Business Expenses
Turnover is not the same as taxable income. Relevant, supportable business expenses need to be considered.
3. Consider Tax Already Paid
Applicable PAYE already withheld and relevant tax credits should be taken into account.
4. Keep Your Workings
Keep the calculations and information used to arrive at your estimate so you can support the figure if queried.
Common Provisional Tax Mistakes
Underestimating taxable income. An estimate that is too low can create problems later.
Confusing turnover with taxable income. They are not the same number.
Leaving everything until the deadline. Submission and payment are separate practical steps, and banking cut-off times matter.
Skipping a nil return. If you are registered, a nil period may still require an IRP6 submission.
A Practical Checklist Before You Submit
✓ Gather your income figures for the relevant period.
✓ Update your business expenses and records.
✓ Prepare a realistic estimate for the rest of the tax year.
✓ Check the calculation before submitting.
✓ Submit the IRP6.
✓ Make payment early enough for it to clear before the applicable deadline.
Need Help With Your Provisional Tax?
You don’t have to work through the estimate alone. NHB Business can help you understand your provisional tax position, review the numbers and get your IRP6 sorted.
