The tax on a pension or provident-fund withdrawal is not simply your normal income-tax percentage. Ordinary pre-retirement lump-sum withdrawal benefits use a specific SARS withdrawal table, while a Two-Pot savings-component withdrawal is taxed differently.
2027 tax year: ordinary withdrawal table
| Taxable lump sum | Tax |
|---|---|
| R0–R27,500 | 0% |
| R27,501–R726,000 | 18% of amount above R27,500 |
| R726,001–R1,089,000 | R125,730 + 27% above R726,000 |
| Above R1,089,000 | R223,740 + 36% above R1,089,000 |
The part many people miss: previous withdrawals
SARS applies retirement-fund lump-sum taxation cumulatively. A previous relevant withdrawal, retirement lump sum or severance benefit can therefore change the tax on the next lump sum.
Two-Pot savings withdrawals are different
Savings-component withdrawals are generally included in taxable income and taxed at the member's applicable marginal income-tax rate. Do not use the ordinary withdrawal table above to estimate a savings-component withdrawal.
Use our South African withdrawal tax calculator for an illustration, then read the full withdrawal-tax guide.
Primary sources
For material tax and Two-Pot decisions, check the current rules directly with SARS and your retirement fund. Useful official sources include SARS retirement lump-sum tax tables and SARS Two-Pot guidance.
Before you submit a withdrawal or transfer instruction
Get a free review of the options you are considering. If personalised assistance is appropriate, your enquiry may be referred to an appropriately authorised financial adviser/FSP.
Request a free retirement-fund review