Turnover Tax

“What is turnover tax?”

Turnover Tax is a simplified tax system for small businesses in South Africa with less than R1 million in annual income.

How it works is…

Instead of paying multiple types of taxes, turnover tax lets you pay one flat tax based on your business’s total income (turnover), not your profit.

It’s designed to reduce the admin, paperwork, and stress for small business owners.

“Who qualifies for turnover tax?”

You can register for turnover tax if:

  • Your annual income (turnover) is R1 million or less
  • You run a registered business, including a sole proprietorship, partnership, close corporation, or (Pty) Ltd
  • You are not a personal service provider or holding certain types of income (like investment income)

You also need to be SARS-compliant and up to date with all tax returns.

“What does turnover tax replace?”

Instead of filing separate returns for each tax type, turnover tax combines:

  • Income Tax
  • Provisional Tax
  • VAT (optional)
  • Capital Gains Tax
  • Dividends Tax

You submit just two returns a year, making it MUCH easier to stay compliant.

“How much is Turnover tax?”

The tax is calculated on your gross income, not profit.

So you pay based on what you earn, not what’s left after expenses.

“What happens if you outgrow turnover tax?”

If your annual income goes over R1 million, you must exit the turnover tax system and switch to the standard tax system with separate VAT, Income Tax, and PAYE obligations.

That’s why it’s important to keep an eye on your income and plan ahead.


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