Provisional tax in South Africa: what expats need to know to avoid SARS penalties

If you earn income that isn’t taxed through PAYE, provisional tax is one of the most important items on your South African tax checklist, because getting the timing or your estimates wrong can quickly lead to SARS penalties and interest. This guide breaks down what provisional tax is in South Africa, who needs to pay it, how it works, and the SARS provisional tax dates for 2026, with practical tips for freelancers, contractors, directors, and South African expats earning income locally or abroad.

Top three provisional tax takeaways for expats

Before getting into the detail, here are the three most important things expats should know about provisional tax in South Africa:

1. Non-resident status does not always remove tax obligations. If you are living abroad but have not yet completed tax emigration, SARS may still regard you as a South African tax resident. This means you could be liable for provisional tax on South African-sourced income and any foreign income that remains taxable in South Africa. Once tax emigration is finalised, you are no longer a provisional taxpayer for income earned outside South Africa, though certain South African-sourced income may still need to be declared.

Read more: Tax emigration: a vital step for South African expats.

2. IRP6 deadlines apply wherever you are. Whether you are in South Africa or overseas, SARS does not change provisional tax submission dates. Missing the first or second IRP6 return deadlines can trigger penalties and interest even if no tax is ultimately due. Staying on top of these dates is especially important for expats with fluctuating or variable income.

Read more: Expats, don’t miss the provisional tax deadline!

3. Underestimating income is a common expat risk. SARS imposes penalties if your second provisional tax estimate is too low. This risk is higher for expats earning foreign income, rental income, or investment income, where cash flow and exchange rates can be unpredictable. Using prior-year assessments and keeping clear records can help avoid unnecessary penalties.

What is provisional tax in South Africa?

Provisional tax is not a separate tax. It is simply a tax system that allows SARS to collect income tax in advance from taxpayers who do not earn a regular salary subject to PAYE. Instead of paying income tax once a year, provisional taxpayers pay tax in two or sometimes three instalments during the tax year, based on estimated taxable income.

This helps SARS manage cash flow and reduces the risk of large tax bills at assessment time.

Who pays provisional tax in South Africa?

You are generally regarded as a provisional taxpayer if you earn income that is not fully subject to PAYE. This commonly includes:

• Freelancers and independent contractors
• Self-employed individuals
• Company directors earning non-PAYE income
• Trusts
• Individuals earning rental income
• Investors earning interest or foreign dividends
• South African expats earning offshore income

If all your income is taxed through PAYE, you are usually not a provisional taxpayer. However, earning any additional income outside PAYE, such as freelance income, rental income, or investment income — can trigger provisional tax registration.

How does provisional tax work?

Provisional tax is paid by submitting IRP6 returns to SARS. These are estimates of your taxable income for the year. There are two mandatory submissions:

• The first provisional tax return is based on a reasonable estimate of income for the first six months of the tax year.
• The second provisional tax return is based on a full year estimate.

A third or voluntary payment may be made after year end to reduce interest. SARS uses these estimates to calculate how much tax you should pay upfront.

What are IRP6 returns?

An IRP6 return is the form used to declare your estimated taxable income and pay provisional tax. Unlike the ITR12 income tax return, which finalises your tax position, IRP6 submissions are estimates made during the tax year.

IRP6 returns are submitted via eFiling and apply equally to South African residents and expats with provisional tax obligations.

SARS provisional tax dates for 2025 and 2026

The provisional tax deadlines are fixed each year and do not change if you are living abroad.

• First provisional tax payment: 31 August
• Second provisional tax payment: 28 or 29 February
• Third provisional tax payment: 30 September after the tax year end

Missing any of these dates can result in penalties and interest.

How SARS penalties apply to provisional tax

SARS penalties related to provisional tax usually fall into two categories:

• Late payment penalties if you miss an IRP6 deadline
• Underestimation penalties if your taxable income estimate is too low

SARS expects your second provisional tax estimate to be within a prescribed percentage of your actual taxable income. If it is not, penalties can apply even if you pay the shortfall later. This is particularly relevant for expats earning variable foreign income.

Read more: Everything SARS wants you to know about provisional tax and penalties in South Africa.

Provisional tax and South African expats

Many expats assume that once they leave South Africa, provisional tax no longer applies. This is not always correct. You may still need to submit IRP6 returns if:

• You earn South African rental income
• You earn director’s fees from a South African company
• You receive taxable foreign income while still tax resident
• Your tax emigration process is incomplete

Failing to declare provisional tax correctly can delay SARS compliance, tax clearance certificates and international money transfers.

Provisional tax vs ITR12 returns

It is important to understand the difference between provisional tax returns and annual tax returns.

• IRP6 returns are estimates submitted during the tax year
• The ITR12 return is your final income tax return, submitted after year end

Any difference between what you paid provisionally and your final tax liability is settled when SARS issues your assessment.

Practical tips for managing provisional tax as an expat

• Review income regularly rather than estimating once a year
• Keep records of foreign income and exchange rates
• Avoid conservative underestimation to protect cash flow
• Consider a third provisional payment if income increased
• Get professional advice if your tax residency status is unclear

For expats, proactive planning is essential to avoid unexpected SARS penalties.

FinGlobal: tax specialists for expats

Provisional tax in South Africa is manageable if you understand the rules and plan ahead. For freelancers, investors and expats, the biggest risks come from missed deadlines and inaccurate estimates rather than the tax itself. If you are unsure whether provisional tax applies to you or how it works with tax emigration, professional guidance can help you stay compliant and avoid costly mistakes.

FinGlobal is ready to assist you with all aspects of your cross-border tax compliance and provide solid advice on how to achieve your financial goals as an expat living abroad. From tax emigration to retirement annuity withdrawal and international money transfers and everything in between, our team of dedicated specialists will handle everything on your behalf.

To find out how we can streamline your tax affairs, straighten out compliance issues, and simplify your cross-border financial transactions, leave your contact details below and we’ll be in touch to discuss your needs.