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Retirement annuity tax saving

See how much tax your RA saves, what each rand really costs you, and the room left under SARS limits.

Updated for the 2026/27 tax year. Free, no sign-up needed.

Your income

Salary, bonus and other income before any retirement fund deduction. Your IRP5 total is a good start.

Your contributions

Yours and your employer's, if it is part of your package. They share the same limit as your RA.

Tax your RA saves this year

R13 686

Each rand you put in costs you about 62 cents after tax. The saving averages R1 141 a month.

You contribute per year
R36 000
Your deduction limit
R198 000
Room left this tax year
R162 000
Marginal rate after deduction
36%

Your limit

27.5% of taxable income
R198 000
Annual cap for 2026/27
R430 000
Limit (the lower of the two)
R198 000
All retirement contributions
R36 000
Deductible this year
R36 000
You have R162 000 of deduction room left. Using all of it before 28 February would save about R57 910 more in tax.
Tax your RA savesR13 686See breakdown

How the calculation works

Retirement fund contributions are deductible up to 27.5% of the greater of your remuneration or taxable income, capped at R430 000 for 2026/27. The limit is shared across your retirement annuity, pension and provident funds, so we deduct your other fund contributions first and give the RA whatever room is left.

The saving is real tax, not a rate times a number. We calculate your income tax with and without the RA deduction using the 2026/27 brackets and primary rebate, so a deduction that drops you into a lower bracket is priced correctly.

Not modelled: rebates for people 65 and older, medical tax credits, and contributions carried forward from earlier years.

Questions people ask

How much of my RA contribution is tax deductible?

Contributions to retirement annuities, pension and provident funds are deductible up to 27.500000000000004% of the greater of your remuneration or taxable income, capped at R430,000 a year for 2026/27. The limit is shared across all your funds.

What happens if I contribute more than the limit?

The excess is not lost. It carries forward and is deducted in later years, and anything still undeducted at retirement can be taken tax-free.

When do I get the tax back?

If your employer deducts the contribution through payroll, you see it in every payslip. For a private RA, SARS refunds the overpaid tax after you file, using the tax certificate your RA provider sends you.

Does the two-pot system change this?

No. Since September 2024 new contributions are split between a savings pot and a retirement pot, but they are deducted for tax in exactly the same way.

Allowances

Stop re-typing your numbers.

Your allowance tracker shows RA, TFSA and CGT headroom for the live tax year, with reminders before the February deadline. Free to start, no card.

Get started free

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Estimates use the SARS tables for the 2026/27 tax year and the assumptions shown. They are for planning only and are not tax or financial advice. For a submission, use your actual figures or speak to a registered tax practitioner.