Retirement annuity tax saving calculator
SARS lets you deduct retirement contributions from your taxable income. See how big your tax refund could be, and what an RA really costs you each month after tax.
How the RA tax deduction works
Contributions to pension, provident and retirement annuity funds are deductible up to 27.5% of the higher of your remuneration or taxable income, capped at R430 000 a year from 1 March 2026. The tax you save equals the deduction × your marginal tax rate, so higher earners save more per rand.
Contributions above the limit aren't lost. They carry forward to future years and can reduce tax on your retirement lump sum or annuity.
If you contribute through your employer, PAYE is reduced each month. With a private RA you usually get the saving as a refund when you file your tax return.
Worked example: R3 000 a month on R480 000 a year
- Without an RA, tax on R480 000 is R110 037 − R17 820 rebate = R92 217.
- An RA of R3 000 a month (R36 000 a year) is well under the limit of 27.5% × R480 000 = R132 000, so it is fully deductible.
- Taxable income falls to R444 000, and tax falls to R81 057.
- You save R11 160 a year (R930 a month), so the RA really costs you R2 070 a month.
To see how the money could grow by retirement, use the compound interest calculator.
Frequently asked questions
When do I get my RA tax refund?
For a private RA, the refund comes when you submit your annual tax return in filing season. Your RA provider sends an IT3(f) certificate that you (or auto-assessment) include.
Can I access my RA before retirement?
Under the two-pot system, a portion of new contributions goes into a "savings pot" that allows limited withdrawals (taxed at your marginal rate). The rest is preserved until retirement from age 55.
Should I use an RA or a TFSA?
They work differently. An RA gives you a tax deduction now, but withdrawals and pensions are taxed later and access is restricted. A TFSA gives no deduction, but growth and withdrawals are tax-free. Many people use both. Compare with the TFSA calculator.
Does my RA lower the PAYE on my payslip?
Only if your employer deducts the contribution through payroll. Otherwise the tax saving comes back as a refund on assessment. The take-home pay calculator shows the effect of retirement contributions on your monthly pay.