RA Tax Benefit
Calculator.

How does an RA reduce my tax in South Africa?

Under Section 11F of the Income Tax Act, contributions to a retirement annuity (RA) fund are deductible from your taxable income. This means you pay PAYE tax on a lower income, reducing your tax bill. The saving depends on your marginal tax rate — someone in the 36% bracket saves R360 in tax for every R1,000 contributed. The government effectively co-funds your retirement savings.

What is the Section 11F deduction limit?

The allowable deduction is the lesser of: (1) R350,000 per year, and (2) 27.5% of the greater of your remuneration or taxable income. This limit applies to the combined total of all your retirement fund contributions — pension fund, provident fund, and RA fund combined. The limits have been unchanged since the 2016/2017 tax year.

What happens if I contribute more than the R350,000 / 27.5% limit?

Contributions above the Section 11F limit are called 'disallowed contributions'. They are not lost — they are carried forward to future years of assessment under Section 11F(3) and can also be used under Section 10C to reduce the taxable portion of your retirement lump sum when you eventually withdraw. High earners who max out their RA deduction often continue contributing beyond the limit for the long-term retirement benefit, even without the immediate tax relief.

Does the R350,000 limit apply per RA fund or in total?

The limit applies in total across all your retirement funds — including any employer pension or provident fund contributions. If your employer already deducts R200,000 per year toward a pension fund on your behalf, you can only claim a further R150,000 from an RA before hitting the R350,000 cap. Always account for all retirement contributions when calculating your available Section 11F room.

Is my employer's pension contribution included in the R350,000 limit?

Yes. Employer contributions to a pension or provident fund on your behalf count toward the R350,000 / 27.5% Section 11F pool. The calculator lets you add these other contributions so the deduction limit is calculated correctly. If you only have an RA and no employer pension fund, leave the 'other contributions' field blank.

When does the tax saving actually appear in my pay?

If your RA is deducted directly from payroll (employer-facilitated RA), the tax relief is applied monthly — PAYE is calculated on the lower taxable income from the start. If you contribute independently to a personal RA, you claim the deduction on your annual tax return (ITR12) after each tax year ends. SARS will refund the overpaid PAYE as a tax refund. Either way, you receive the full tax saving — it just arrives at different times.