Real Example

PAYE Calculation Example: R20,000 Monthly Salary

Here's exactly how much PAYE is deducted from a R20,000/month salary, using the 2025/2026 SARS tax tables — with no pension or medical aid deductions, for a taxpayer under 65.

Step-by-step

1. Annualise: R20,000 × 12 = R240,000 annual taxable income
2. Apply the tax table: R240,000 falls in the R237,101–R370,500 bracket: R42,678 + 26% of the amount above R237,100
   = R42,678 + 26% × (R240,000 − R237,100) = R42,678 + 26% × R2,900 = R42,678 + R754 = R43,432
3. Deduct the primary rebate: R43,432 − R17,235 = R26,197 annual tax
4. De-annualise: R26,197 ÷ 12 = R2,183/month

(Figures rounded for clarity — small differences of a few rand from official payroll software are normal due to rounding at each step.)

What changes this number

• Pension/retirement annuity contributions reduce taxable income before Step 1, lowering PAYE
• Medical aid contributions generate a monthly tax credit, deducted after Step 3
• Age — employees 65+ get a larger rebate, further reducing PAYE
• Additional taxable allowances (travel, etc.) increase gross remuneration before Step 1

Try your own numbers with our PAYE Calculator, or see the full method in our How to Calculate PAYE guide.

People Also Ask

Does this example include UIF?

No — this example shows PAYE only. See our Net Salary Example for a full breakdown including UIF.

Why might my payroll software show a slightly different PAYE figure?

Small rounding differences at each calculation step are normal and don't indicate an error.

Does a pension contribution reduce this PAYE amount?

Yes — pension or retirement annuity contributions reduce taxable income before the tax table is applied, lowering PAYE.

Related Resources

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