"I turned down the raise because it would push me into a higher tax bracket" is one of the most common tax misunderstandings out there — and it's based on a misreading of how brackets actually work. No raise or bonus can ever leave you with less take-home pay than before it.
The SARS 2026/27 tax brackets
South Africa uses a progressive tax system with these brackets:
| Taxable income | Rate |
|---|---|
| R0 – R245,100 | 18% |
| R245,101 – R383,100 | R44,118 + 26% above R245,100 |
| R383,101 – R530,200 | R79,998 + 31% above R383,100 |
| R530,201 – R695,800 | R125,599 + 36% above R530,200 |
| R695,801 – R887,000 | R185,215 + 39% above R695,800 |
| R887,001 – R1,878,600 | R259,783 + 41% above R887,000 |
| R1,878,601+ | R666,339 + 45% above R1,878,600 |
Only the income inside each bracket is taxed at that bracket's rate
This is the part that gets misunderstood: moving into a higher bracket only means the portion of income inside that bracket is taxed at the higher rate — not your entire income. Everything below that threshold is still taxed at the lower rates that applied to it. The table above is already built this way, which is why each row after the first states a fixed amount (the tax already accumulated from the lower brackets) plus a rate on only the amount above that row's threshold.
Marginal rate vs effective rate
Your marginal rate is the rate applied to your last rand earned — the rate of the bracket your income currently sits in. Your effective rate is your total tax paid, divided by your total income — a blended average across every bracket your income passed through, always lower than your marginal rate (except right at the very bottom bracket, where they're equal).
Worked example: someone with R400,000 in taxable income sits in the R383,101–R530,200 bracket, so their marginal rate is 31%. Their tax before any rebate: R79,998 + 31% × (R400,000 − R383,100) = R79,998 + R5,239 = R85,237. Subtracting the primary rebate of R17,820 gives R67,417 in tax owed. Their effective rate: R67,417 ÷ R400,000 = 16.85% — less than half their 31% marginal rate.
The primary rebate lowers everyone's bill further
Every taxpayer under 65 gets a primary rebate of R17,820 per year, subtracted directly from tax calculated using the table above — which is also why the tax threshold (the income level below which no tax is owed at all) sits well above R0.
Try the calculator
PAYE / Tax Calculator
See your own marginal and effective tax rate side by side, using the current SARS brackets.