A small business does not face one tax. It faces a set of them, each with its own registration, return and deadline. Which ones apply depends on the legal form, turnover and whether you employ anyone. Small business tax requirements in South Africa include income tax (or a relief regime), provisional tax, VAT above the turnover threshold, and PAYE, UIF and SDL once you pay employees.
Two things changed on 1 April 2026: the compulsory VAT registration threshold and the turnover tax threshold both rose to R2.3 million, according to SARS. Check any older figure you have seen against the SARS pages linked below.
Business Requirements at a Glance
The taxes and registrations a small business may face, and what the official sources say about each.
- Income tax — a company files an ITR14 return within 12 months after its financial year end.
- Provisional tax — companies fall into the system automatically and pay in advance on estimated taxable income.
- VAT — compulsory registration above R2.3 million turnover and voluntary registration from R120,000, both from 1 April 2026.
- PAYE and UIF — when you employ people. UIF is 1% from the employee plus 1% from the employer.
- SDL — the skills development levy, at 1% of total salaries once you expect salaries above R500,000 over the next 12 months.
- Turnover tax — an optional regime for qualifying micro businesses, with a threshold of R2.3 million from 1 April 2026.
- Small business corporation (SBC) rates — reduced graduated company rates for qualifying companies.
- COIDA — registration with the Compensation Fund for employers. It is not a tax, but it is compulsory.
Registration and Legal Requirements
Register once for the tax types you need. SARS says you can register for all the different tax types through its Client Information System. An employer registered for PAYE must also register for UIF. Details of how to apply are on the SARS skills development levy page; confirm the current registration route with SARS.
Small business tax registration for VAT. Registration is compulsory once turnover passes R2.3 million (it was R1 million before 1 April 2026) and voluntary from R120,000 (it was R50,000). The standard VAT rate is 15%. VAT returns are submitted through eFiling on or before the last business day of the month after the end of the tax period. See the SARS VAT page.
SDL and UIF. An employer who expects total salaries above R500,000 over the next 12 months becomes liable for SDL, paid monthly with the EMP201 declaration. Check the current UIF earnings ceiling on the SARS UIF page, because the figure shown there is dated.
COIDA is separate. Every employer who has one or more part-time, casual, temporary or full-time employees must register with the Compensation Fund, and should do so within seven days after the first employee starts. The annual return of earnings is due by 31 March or the date the Director-General sets, so confirm the window with the Department of Employment and Labour.
The legal form shapes the income tax. A company is taxed at its own rate, while a sole proprietor is taxed on the owner’s profit. If you are still choosing a structure, read the company registration requirements first.
Documents and Ownership Information Required
- CIPC registration documents and a current company profile
- Certified ID copies for every director, member or partner
- Beneficial ownership information as filed with the CIPC
- A SARS tax reference number for the entity
- A business bank account in the entity’s name
- Annual financial statements and management accounts
- Records of all income and expenses, with supporting invoices
- Payroll records, where the business employs anyone
Keep records for the period the Tax Administration Act 28 of 2011 requires; confirm that period with SARS before you discard anything.
Tax, Licence and Compliance Requirements
Small business tax rate. The standard company income tax rate is 27% for years of assessment ending 1 April 2026 to 31 March 2027. A qualifying small business corporation instead pays graduated rates for the same years: 0% on the first R99,000; 7% of the amount above R99,000 up to R365,000; R18,620 plus 21% of the amount above R365,000 up to R550,000; and R57,470 plus 27% of the amount above R550,000. The gross income limit is R20 million. See the SARS Budget 2026 FAQ.
Turnover tax is a separate regime for micro businesses. The first R600,000 is taxed at 0%, then 1% above R600,000, R3,500 plus 2% above R950,000, and R12,500 plus 3% above R1,400,000. It replaces income tax, provisional tax, capital gains tax and dividends tax for qualifying businesses. Details are on the SARS turnover tax page.
Provisional tax. There are two compulsory payments: the first within six months of the start of the year, the second by the last working day of the year. A third payment after year end is optional. A 20% underestimation penalty applies if the second estimate is below 80% of final taxable income, and late payments attract 10%. SARS charges interest of 10.25% a year on late or underpaid tax from 2 March 2026. See the SARS provisional tax page.
The laws behind it. Small business tax laws include the Income Tax Act 58 of 1962 (section 12E for small business corporations, and sections 48 to 48C for turnover tax), the Value-Added Tax Act 89 of 1991, the Tax Administration Act 28 of 2011 and the Compensation for Occupational Injuries and Diseases Act 130 of 1993.
Licences. Municipal and sector licences depend on your activity. No single official source covers them, so ask your municipality or the relevant regulator.
Process, Deadlines and Ongoing Obligations
Start with the record-keeping: a business bank account, every invoice kept and a monthly reconciliation. Then register for each tax when the obligation arises and diarise the dates below.
- Company ITR14 return: within 12 months after the financial year end
- Provisional tax: two compulsory payments a year, one optional top-up
- VAT returns: by the last business day of the month after the tax period, via eFiling
- Monthly employer declaration (EMP201) for PAYE, SDL and UIF
- Employer reconciliation (EMP501): the interim window for 1 March to 31 August 2026 runs from 21 September to 31 October 2026
- COIDA return of earnings: confirm the current window with the Compensation Fund
If you have fallen behind, contact SARS to arrange payment instead of ignoring the debt, and ask SARS how to obtain proof of tax compliance if a funder, tender or landlord requires it.
Frequently Asked Questions
What are the small business tax requirements in South Africa?
Register for the taxes that apply to you, file your ITR14 and provisional tax returns, register for VAT once turnover passes R2.3 million, register for PAYE and UIF when you employ people, add SDL once expected salaries pass R500,000, and register employees with the Compensation Fund.
How do I register a business for tax?
Use the SARS Client Information System or eFiling to register once for the tax types you need. Separately, register the company with the CIPC and your employees with the Compensation Fund.
How do I file a tax return for a small business?
A company submits an ITR14 within 12 months after its financial year end, through SARS eFiling. Companies also submit provisional tax estimates (IRP6) twice a year. Employers submit EMP201 declarations monthly and EMP501 reconciliations. Forms and filing steps are on SARS.
Which tax forms does a small business use?
The ITR14 for company income tax, the IRP6 for provisional tax, the EMP201 for monthly PAYE, SDL and UIF, and the TT02 for turnover tax payments. Download them from SARS; do not use copies from other sites.
How do I calculate small business tax?
On normal company tax, multiply taxable income by 27%. A qualifying small business corporation applies the graduated table above to taxable income. A micro business applies the turnover tax table to its taxable turnover.
Is COIDA a tax?
No, but registration with the Compensation Fund is compulsory for employers.
Do I need a tax clearance if my business is only a few months old?
This page cannot confirm a specific rule for new businesses. Ask SARS how to obtain proof of tax compliance and what it requires of a newly registered entity.
Rates, thresholds and deadlines change with each budget. Confirm them with SARS or a registered tax practitioner. See business and compliance requirements and the company registration requirements.