Lump Sum Retirement Tax Calculator South Africa: Estimate Your Payout
Work out how much tax SARS will deduct from your retirement fund lump sum, what you will actually receive after tax, and your effective tax rate. Enter your lump sum amount and any previous retirement lump sums you have received to get an instant estimate based on the SARS retirement and severance benefit tax table.
Calculate My Lump Sum Tax ↓Retirement Lump Sum Tax Calculator
Enter your details below, then press Calculate to see your tax, net payout and effective rate.
Your Net Lump Sum After Tax
R0
Tax payable R0
Tax breakdown
| Component | Basis | Amount |
|---|
This estimate applies the SARS retirement lump sum tax table to your lump sum amount and lifetime lump sum history.
When you take a cash lump sum at retirement, on death, or as a qualifying retrenchment or severance benefit, SARS taxes the first R550,000 of your lifetime lump sums at 0%, then 18% up to R770,000, 27% up to R1,155,000, and 36% above that. If you cash out a retirement fund before retirement, for example on resignation, only the first R27,500 is tax free and the remaining amount is taxed more heavily. All retirement fund lump sums you have ever received since October 2007 are added together to work out which bracket applies. Use the calculator above for your own estimate, and confirm the exact figure with your fund administrator or a SARS tax directive.
How to Use the Lump Sum Retirement Calculator
Three quick steps to an estimated tax and payout figure.
- 1 Enter your lump sum amount. This is the cash amount you are receiving from your pension, provident or retirement annuity fund.
- 2 Select the reason and add any previous lump sums. This determines which SARS table applies and where you sit in the cumulative lifetime brackets.
- 3 Press Calculate. Your tax payable, net payout and effective rate appear instantly, with a full breakdown. Use “Copy Result” to save it.
The Lump Sum Retirement Tax Formula
SARS taxes lump sums cumulatively, so each new lump sum is added to everything you have received before it.
Tax on Total = Apply SARS Table to Total Lifetime Lump Sums
Tax on Previous = Apply SARS Table to Previous Lump Sums
Tax Payable = Tax on Total – Tax on Previous
Net Lump Sum = Current Lump Sum – Tax Payable
This lifetime aggregation is what stops the R550,000 tax free portion from being granted again on every lump sum you ever receive.
Worked Examples
Real calculations using the SARS retirement and severance lump sum table, so you can see exactly how the tax is worked out.
Example 1: R500,000 lump sum, retirement, no previous lump sums
| Total lifetime lump sums: R500,000 | Tax on total: R0 |
| Tax on previous: R0 | Tax payable: R0 |
| Effective rate: 0% | Net lump sum: R500,000.00 |
Example 2: R800,000 lump sum, retirement, no previous lump sums
| Total lifetime lump sums: R800,000 | Tax on total: R47,700 |
| Tax on previous: R0 | Tax payable: R47,700 |
| Effective rate: 5.96% | Net lump sum: R752,300.00 |
Example 3: R1,000,000 lump sum, retirement, R400,000 previous lump sums
| Total lifetime lump sums: R1,400,000 | Tax on total: R231,750 |
| Tax on previous: R0 | Tax payable: R231,750 |
| Effective rate: 23.18% | Net lump sum: R768,250.00 |
Lump Sum Retirement Tax in South Africa: The Complete Guide
Retirement fund lump sums are taxed under a separate set of rules to your normal salary. Instead of your marginal income tax rate, SARS applies one of two fixed tables set out in the Second Schedule to the Income Tax Act, depending on why you are taking the money out.
The retirement, death and severance table
If you take the lump sum at retirement, on death, or as a qualifying retrenchment or severance benefit, the first R550,000 of your lifetime lump sums is tax free. Above that, 18% applies up to R770,000, 27% up to R1,155,000, and 36% on anything above R1,155,000. This is the most favourable of the two tables, since it rewards preserving retirement savings until retirement age or a genuine loss of employment.
| Taxable Amount | Rate of Tax |
|---|---|
| R0 – R550,000 | 0% |
| R550,001 – R770,000 | 18% of amount above R550,000 |
| R770,001 – R1,155,000 | R39,600 + 27% of amount above R770,000 |
| R1,155,001 and above | R143,550 + 36% of amount above R1,155,000 |
The withdrawal table
If you cash out a retirement fund before retirement, for example on resignation, only the first R27,500 of your lifetime lump sums is tax free. Above that, 18% applies up to R726,000, 27% up to R1,089,000, and 36% above R1,089,000. This table is deliberately less generous, to discourage cashing in retirement savings early instead of preserving them.
Lump sums are taxed cumulatively
Every retirement fund lump sum and qualifying severance benefit you have ever received since 1 October 2007 is added together for tax purposes. The tax on your current lump sum is worked out by calculating the tax on your full lifetime total, then subtracting the tax already paid on your previous lump sums. This means the R550,000 or R27,500 tax free portion is only granted once across your lifetime, not again on every payout, and a large earlier lump sum can push a later one into a higher bracket from the first rand.
The two-pot system and savings component withdrawals
Since the two-pot retirement system came into effect, withdrawals from the savings component of your retirement fund are not taxed on these lump sum tables. Instead they are added to your taxable income for the year and taxed at your normal marginal rate, with the fund applying a SARS tax directive based on your estimated income.
Which funds does this apply to
The retirement lump sum tax rules apply to pension funds, pension preservation funds, provident funds, provident preservation funds, and retirement annuity funds. Certain living annuity lump sum commutations can also fall under these rules, depending on the value of the annuity.
Methodology
This calculator adds your current lump sum to any previous retirement fund lump sums you have received, applies the relevant SARS table to that lifetime total, applies the same table to your previous lump sums on their own, and takes the difference as the tax payable on your current lump sum. Your net lump sum is the current amount less that tax.
Assumptions used in this calculator
- Figures reflect the SARS 2026/2027 tax year, which carries the same lump sum tables as the 2025/2026 and 2024/2025 tax years.
- The withdrawal table is used only for resignation or pre-retirement cash withdrawals, not for retirement, death or qualifying retrenchment.
- Two-pot savings component withdrawals are not covered by this calculator, since they are taxed at your marginal income tax rate instead.
- This calculator does not verify whether a retrenchment qualifies for the favourable table. Confirm this with your employer or a tax practitioner.
Frequently Asked Questions
It estimates the tax payable on your retirement fund lump sum, the net amount you will receive after tax, and your effective tax rate, using the correct SARS table for your lump sum type.
At retirement, death or qualifying retrenchment, the first R550,000 of your lifetime lump sums is tax free. On resignation or an early withdrawal, only the first R27,500 is tax free.
SARS taxes all your retirement fund lump sums since October 2007 as one cumulative total. Your current lump sum is taxed on top of your previous lump sums, so the tax free portion is only available once across your lifetime.
No. Savings component withdrawals under the two-pot system are added to your taxable income and taxed at your marginal rate, not on the retirement lump sum tables used by this calculator.
Yes. Cashing out a retirement fund on resignation uses the less favourable withdrawal table, with only R27,500 tax free, instead of the R550,000 available at retirement, death or qualifying retrenchment.
No. This tool gives a planning estimate based on the SARS lump sum tables. Your actual tax is confirmed by SARS through a tax directive issued to your fund, which accounts for your full lifetime lump sum history on record with SARS.