How much must you earn to qualify for a SARS tax return?

Understanding your legal obligations for filing a tax return is the first step in avoiding penalties and maintaining a clean financial record.

Not every individual is required to submit a return, but failing to file when legally obligated can result in a “Non-Compliance” status that may affect your financial profile for years.

This guide explains the income thresholds, the conditions that trigger mandatory filing, and the strategic reasons for submitting a return even when you are below the minimum requirement.

Phase 1: Statutory Income Threshold

The law sets a base gross income threshold. If your total earnings before tax and deductions remain below this figure, you are generally considered a non-filer.

1. General Filing Threshold

For most taxpayers, the annual threshold is approximately 500,000 in local currency. If you earn less than this amount from a single employer and have no additional income sources, filing is usually optional.

Caveat: This exemption applies only if your employer has correctly deducted the required tax (PAYE) throughout the year.

2. Age-Based Tax Rebates

Tax-free thresholds increase with age, providing additional relief:

• Under 65: ~95,750
• 65–75: ~148,217
• Over 75: ~165,689

Age effectively increases the amount of income you can earn before a return becomes mandatory.

Phase 2: The Three-Point Rule for Mandatory Filing

Even if your total income is below the statutory threshold, filing is required if any of the following conditions apply during the financial year.

3. Multiple Sources of Income

If you changed jobs during the year or earned income from two employers simultaneously, you must file. Each employer reports only the tax deducted from your payments. The revenue authority requires a consolidated view of all income to determine whether additional tax is due or a refund is owed.

This scenario is one of the most frequent causes of unexpected tax debt.

4. Allowances and Fringe Benefits

Allowances such as travel, subsistence, or company-provided vehicles must be declared.

Check your income certificate for codes such as:

• 3701 – Travel allowance
• 3801 – Fringe benefits

Failing to declare these amounts can trigger audits and penalties.

5. Foreign Income and Capital Gains

Any income earned abroad or gains from the sale of assets (e.g., shares, property) must be reported.

Threshold: If you have capital gains exceeding 40,000 or any foreign dividends, you must file, regardless of your total domestic income.

Phase 3: Impact on Students and Household Income

For students or families applying for funding, accurate reporting is critical.

6. Household Income Verification

Student funding systems often set strict income limits. For example, household income must not exceed 350,000 per year, or 600,000 for students with disabilities.

If your return shows higher income than claimed in your application, the system will flag a discrepancy. Filing a return ensures that official documentation matches your declared household income, preventing delays or rejections.

Phase 4: Strategic Reasons to File

Even when below the mandatory threshold, there are practical benefits to submitting a return.

7. Recovering Overpaid Tax

If your employer deducted tax and you have qualifying medical expenses or retirement contributions, filing may allow you to claim a refund. The system will not automatically return overpaid amounts without a submitted return.

8. Maintaining a Clean Financial Record

A history of submitted returns is necessary for obtaining loans, vehicle finance, or business contracts. Your Notice of Assessment serves as proof of compliance and demonstrates financial responsibility.

Summary

Determining whether you must file is not solely based on income. Complexity matters: multiple employers, allowances, medical schemes, or investment income can all trigger mandatory filing. Even if you fall below the general threshold, filing may secure refunds and maintain a clean compliance record.