Interest exemption calculator
The first slice of interest you earn from a South African bank or savings account each year is tax free. Above that, it is taxed like salary. Enter your interest for the year and your age, and see the tax-free part, the taxable part and the estimated tax at your marginal rate. Nothing you enter leaves this page.
How the interest exemption works
SARS (the South African Revenue Service) lets every person earn some local interest each tax year without paying tax on it. For the 2026/27 year (1 March 2026 to 28 February 2027) the exemption is R23 800 if you are under 65 and R34 500 if you are 65 or older. These amounts have not moved since 2014, so as interest rates and savings grow, more people cross the line each year.
Interest above the exemption is added to your other income and taxed on the normal tables, at your marginal rate. Banks do not withhold the tax. They report your interest to SARS on an IT3(b) certificate, SARS pre-fills it on your return, and you settle the tax on assessment. If the taxable interest is large, SARS may treat you as a provisional taxpayer, which means two payments during the year instead of one after it.
A tax-free savings account (TFSA) sits outside all of this. Interest inside a TFSA is never taxed and never eats into your exemption. Contributions are capped per year and over your lifetime, so it works best as a long-term home for savings you will not touch. Interest from foreign sources has no exemption at all.
Frequently asked questions
How much interest can I earn before paying tax?
For the 2026/27 tax year, the first R23 800 of local interest a year is exempt if you are under 65, and the first R34 500 if you are 65 or older. Interest above that is added to your income and taxed at your marginal rate. The exemption has not changed since 2014.
Does the bank deduct the tax for me?
No. South African banks pay interest without withholding tax. They send SARS an IT3(b) certificate showing what you earned, and SARS pre-fills it on your return. You pay any tax through your assessment, or through provisional tax if the taxable interest is large.
Is interest in a tax-free savings account counted?
No. Interest, dividends and growth inside a tax-free savings account (TFSA) are fully tax free and do not use up your interest exemption. Contributions are capped each year and over your lifetime, and paying in more than the cap attracts a 40% penalty on the excess.
Savings growing? Put some of it where SARS cannot reach
Retirement annuity contributions are deductible up to 27.5% of your income. The retirement calculator shows the growth and the tax you get back each year.
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Keep exploring
Exemption amounts from SARS, "Interest and Dividends", 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. SARS assesses the actual tax.