Provisional Tax 2025: Stop Guessing — Start Managing Your Clients’ Cash Flow
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Let’s Get Real
If your clients earn anything outside a payslip — rental income, freelance projects, or side consulting gigs — they’re already on SARS’s provisional-tax radar.
And if you’re not helping them plan those payments properly, they’ll end up paying penalties, interest, and stress instead of using that cash to grow their business.
Provisional tax isn’t complicated. It’s just a pre-payment of normal income tax, but the skill lies in timing, estimating, and planning. Here’s what you need to know for the 2025 tax year (1 March 2024 – 28 February 2025).
Who Must Pay Provisional Tax
If money hits a client’s account without PAYE deducted, SARS expects advance payments.
That includes:
Freelancers and consultants billing directly
Landlords earning rental income
Partners drawing profit shares
Investors with interest or dividends above R30 000 per year
Not included: Employees whose entire income is taxed via PAYE from a registered employer.
Exempt: Anyone under 65 with taxable income below R95 750 for 2025.
If they fall outside those limits, they must register as provisional taxpayers and file an IRP6.
Key 2025 Dates to Circle
Miss a date or underestimate badly, and SARS hits with a 20 % under-estimation penalty plus daily interest.
Example 1 – The Freelancer
Thabo, a freelance graphic designer, earns R600 000 in fees, spends R60 000 on business costs.
Taxable income = R540 000.
First IRP6 (Aug 2024): Estimate half-year R270 000 → Tax ≈ R270 000 × 26 % = R70 200.
Second IRP6 (Feb 2025): Adjust to actual R540 000 → Total tax ≈ R121 000 – first payment = R50 800 due.
If Thabo only pays R80 000 for the year, SARS penalises 20 % of the R41 000 shortfall = R8 200 penalty — money that could’ve gone to his next project.
Example 2 – The Landlord
Sibongile owns two flats earning R12 000 each per month = R288 000 a year.
Less expenses (R88 000) = R200 000 taxable rental income.
Add salary of R400 000 → total R600 000 taxable income.
Her employer’s PAYE covers only the salary portion.
She owes provisional tax on R200 000 × 26 % = R52 000, split into:
August R26 000
February R26 000
Smooth, simple, and penalty-free.
Turn Compliance into Advisory Income
Provisional tax is your opportunity to move beyond data-capturing into real advisory work.
Clients often pay late because they don’t understand how it works. You can change that.
Each service solves a client pain and adds recurring revenue for you
How to Estimate Accurately
Forget guesswork — SARS expects a calculated projection, not a hunch.
Steps:
Start with last year’s taxable income (“basic amount”).
Adjust for growth or extra income this year.
Remove once-off items.
Apply current tax tables.
Rules:
Income ≤ R1 million → estimate ≥ 90 % of actual.
Income > R1 million → estimate ≥ 80 %.
Pro Tip: Pull mid-year actuals from your accounting system or bank feeds — never rely on client memory.
Checklist for Accountants
Keep It Simple, Keep It Profitable
When you manage provisional tax well, clients stay compliant, avoid penalties, and trust you as their financial partner — not just their tax filer.
You gain recurring income, predictable workflows, and stronger relationships.
That’s how modern accountants build profitable practices — by turning compliance into cash flow confidence.
