Provisional Tax Calculation 2022 Tax Year

Provisional tax is an advance payment system used by taxpayers who earn income that is not subject to regular PAYE (Pay As You Earn) deductions. It ensures that the tax authority receives a steady flow of revenue throughout the year and helps individuals and businesses avoid a large tax bill at the end of the year.

Who Must Pay Provisional Tax?

• Individuals who earn income from freelance work, consulting, rentals, or any other source that does not have tax deducted at source.
• Companies, close corporations and partnerships that have taxable income.
• Trusts and estates with taxable income.

Key Dates for the 2022 Tax Year

Payment #	Due Date	What It Covers
First	31August2022	Estimated tax for the period 1March2022 31August2022
Second	31February2023 (or 28Feb2023 if nonleap year)	Estimated tax for the period 1September2022 28February2023
Third (optional)	30June2023	Balance of tax due for the full 2022 tax year

How to Calculate Provisional Tax

Step 1 Estimate Your Taxable Income

Start with the previous years actual taxable income. Adjust for known changes such as:

• Increase or decrease in client work
• New rental properties or disposal of assets
• Changes in expenses or deductions

Step 2 Apply the Appropriate Tax Rate

For individuals, the tax rates for 2022 are:

Taxable Income (R)	Rate
0 216000	18%
216001 337800	26%
337801 467500	31%
467501 613600	36%
613601 782200	39%
782201 1656600	41%
Above 1656600	45%

Company tax rate for 2022: 28% (or 27% if qualifying small business).

Step 3 Reduce by Tax Rebates and Credits

Subtract any applicable rebates such as:

• Primary rebate (R16425 for 2022)
• Secondary rebate (R9232) if you are 65 or older
• Medical tax credits, retirement fund contributions, etc.

Step 4 Determine the Provisional Tax Payable

Two methods are allowed:

1. Estimated Tax Method Use the estimated taxable income and rates to calculate the total tax for the year, then divide by two (or three if you opt for the third payment).
2. Prior-Year Method Use the actual tax payable from the previous year, reduce by any rebates, and split into equal instalments. This is simpler but may lead to under or overpayment if your income changes substantially.

Illustrative Example

Penalty and Interest

If the total provisional tax paid is less than 75% of the final tax liability (after rebates), the tax authority may impose a penalty of up to 20% on the shortfall. Interest is also charged on any unpaid balance from the due date until payment is made.

How to Submit Payments

• Online via the tax authoritys eservices portal the most convenient method.
• Electronic funds transfer (EFT) using the designated banking details.
• In person at a branch of any authorized bank.

When paying online, you will need your tax reference number and the correct payment code (e.g., PT for provisional tax). Keep the receipt it is required when filing the final tax return.

Useful Tips

• Keep accurate records throughout the year invoices, expense receipts, and bank statements.
• Review your estimated income quarterly; a small adjustment can prevent a large endyear surprise.
• If you anticipate a significant drop in income, submit a variation request before the next due date.
• Take advantage of allowable deductions home office expenses, travel, depreciation, and retirement contributions can lower your taxable income.
• Consider consulting a tax practitioner if your situation is complex (multiple income streams, foreign income, capital gains, etc.).

Summary

Provisional tax for the 2022 tax year is designed to spread your tax liability across the year. By estimating your taxable income, applying the correct rates, and factoring in rebates, you can calculate the required instalments. Paying on time avoids penalties and interest, while regular reviews help keep your estimates realistic. Use the online portal for a quick and traceable payment process, and retain all supporting documentation for the final return.