If you work abroad but are still a South African tax resident, SARS taxes you on your foreign salary. The “183-day rule” can reduce that bill. It lets you exempt up to R1.25 million of your foreign salary from South African tax each year, as long as you spend enough time outside the country.
Who qualifies for the foreign employment income exemption?
You can use the rule if you:
- Are still a South African tax resident
- Are employed by a company (South African or foreign)
- Do your work outside South Africa
Freelancers, independent contractors and self-employed people cannot use it. Government employees and public office holders are also excluded.
If you have already ceased your South African tax residency, the rule does not apply to you. SARS does not tax non-residents on salary earned abroad.
The two-time tests
You must pass both of these tests in the same 12-month period:
- The 183-day test: you spend more than 183 full days outside South Africa in total.
- The 60-day test: at least one of your trips lasts more than 60 full days in a row.
The days can be spread over several trips. For example, 90 days abroad, a visit home, and then another 100 days abroad adds up to 190 days. If one of those trips was longer than 60 days, you pass both tests.
The 12-month period can be any 12 months in a row. It can run across two tax years.
How the R1.25 million limit works
Only the first R1.25 million of your foreign salary is tax-free in South Africa. SARS taxes anything above that at your normal income tax rate.
For example, if you earn R1.5 million abroad, R1.25 million is exempt and R250,000 is taxed in South Africa.
A few points to keep in mind:
- The limit resets every tax year. You get the full R1.25 million each year, even if you only worked abroad for part of the year.
- It covers your whole package. Bonuses, commission, allowances, leave pay and taxable benefits all count towards the R1.25 million.
- Work done in South Africa does not count. If you split your time, only the salary for days worked abroad qualifies.
The R1.25 million limit has stayed the same since 2020. Budget 2026 left it unchanged, even though other tax thresholds were adjusted for inflation.
Can South Africans working overseas be taxed twice?
Double taxation rules are designed to make sure you pay tax once on the same income. For most expats, the practical effect is that you pay roughly the higher of the two countries’ tax rates on the portion above R1.25 million, with no double charge.
Your first R1.25 million is protected. South Africa exempts this portion completely, so only the foreign country can tax it.
On income above R1.25 million, you get credit for foreign tax. Both South Africa and the country where you work may have the right to tax this portion. South Africa then lets you deduct the foreign tax you paid on that income from your South African tax bill. This is called a foreign tax credit (section 6quat).
You still have to file a tax return
Even if all your foreign salary falls under the R1.25 million limit, SARS requires you to submit a tax return. This is also how you claim back any tax your employer deducted that you did not owe.
If your employer is overseas and does not deduct South African tax, you may need to pay your South African tax yourself through provisional tax.
The 183-day rule does not change your tax residency
Spending more than 183 days abroad keeps you a South African tax resident. The rule gives tax relief to residents working abroad and has no effect on your residency status.
SARS uses two other tests to decide if you are a tax resident:
- The ordinarily resident test: does South Africa remain your real home?
- The physical presence test: have you spent more than 91 days in South Africa this tax year, more than 91 days in each of the past five tax years, and more than 915 days in total over those five years?
When leaving the tax net may make more sense
If you have moved abroad permanently and earn well over R1.25 million, formally ceasing your tax residency may save you more. Once you are a non-resident, SARS no longer taxes your foreign salary.
Ceasing residency has a cost. SARS treats you as having sold your worldwide assets (except South African property) on the day you cease residency, and you may owe capital gains tax on them. Get advice before taking this step.
Proving you meet the 183 day rule
SARS often asks people to prove they qualify. Keep:
- Your employment contract
- A list of every date you left and entered South Africa
- Passport stamps, boarding passes and flight bookings
- Payslips and proof of any foreign tax paid
Get clarity on South African expat tax with FinGlobal
FinGlobal can help you check if you qualify, file your tax return correctly and decide if ceasing tax residency is the better option. Contact us for a free consultation.
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