Dividends tax calculator
When a company pays a dividend, it holds back 20% for SARS (the South African Revenue Service) and pays you the rest. See the tax, what you receive, and what the company must declare so a set amount lands in your account. Then compare it with taking the same money as salary. Nothing you enter leaves this page.
How dividends tax works
Dividends tax is a flat 20% on any dividend a South African company pays to a person. The company withholds it and pays it to SARS, so you never see that 20%. A R100 000 dividend puts R80 000 in your account. If you want R80 000 in your account, the company must declare R100 000. Divide your target by 0.8 to gross it up.
The dividend itself is exempt from income tax in your hands, so nothing is added to your tax return bill. But remember where the money came from: the company already paid 27% income tax on that profit. Taken together, R100 of profit becomes R73 after company tax and R58.40 after dividends tax, an effective 41.6%.
A salary works the other way round. It is a deductible expense for the company, so the company pays no tax on it, and you pay personal income tax at your marginal rate, which runs from 18% to 45%. The salary comparison on this page shows the extra income tax you would pay if the same gross amount were added to your other income. It does not include the company tax saving on the salary side, which usually tips the balance further towards salary for most earners. An accountant can run the full picture, including UIF (Unemployment Insurance Fund) and other payroll costs.
Frequently asked questions
Who pays dividends tax, the company or the shareholder?
The shareholder is liable, but the company withholds the 20% and pays it to SARS before the dividend reaches you. You receive 80% of the dividend declared. The company must submit a dividends tax return (DTR01 and DTR02) by the end of the month after the dividend is paid.
Do I pay income tax on a dividend as well?
No. A dividend from a South African company is exempt from normal income tax in your hands. The 20% dividends tax withheld by the company is the only tax on it. You still declare it on your return, but it is not taxed again.
Is a dividend cheaper than a salary?
It depends on your marginal rate. A dividend is paid from profit that has already been taxed at 27% in the company, then 20% comes off, so about 41.6% of the profit is gone in total. A salary is deductible for the company and taxed only once, at your personal rate, which is under 41.6% for most people. This calculator shows the shareholder side only; ask an accountant before deciding.
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Keep exploring
Dividends tax rate from SARS, "Dividends Tax", and personal rates from "Rates of tax for individuals", sars.gov.za, for the 2027 tax year (1 March 2026 to 28 February 2027). Estimate only. The salary comparison assumes you are under 65.