Find out how much tax you could save by contributing to a retirement annuity (RA) in South Africa. Enter your monthly income and contribution to see your estimated annual tax saving in seconds.
What is a retirement annuity?
A retirement annuity is a tax-advantaged savings vehicle designed to help you build an income for retirement. Contributions are tax-deductible, and growth inside the fund is not taxed, which means more of your money stays invested and compounds over time.
In South Africa, RAs are regulated by the Pension Funds Act, and you can only access the funds from age 55, with at least two-thirds taken as a monthly annuity income.
How the tax benefit works
SARS allows you to deduct your retirement fund contributions from your taxable income, up to a limit. The deduction reduces the income SARS taxes you on, which lowers your tax bill or increases your refund at year-end.
The annual deduction is capped at the lesser of:
- 27.5% of your taxable income, or
- R350,000 per tax year
This cap is shared across all retirement funds combined, including pension funds, provident funds, and RAs. Any contributions above the cap aren’t lost — they roll over to future tax years or reduce tax on your retirement lump sum.
How to use the calculator
Enter three values:
- Monthly taxable income — your gross monthly income before tax
- Monthly RA contribution — what you contribute (or plan to contribute) each month
- Age group — under 65, 65 to 74, or 75 and older, which determines your tax rebates
Click Calculate Tax Benefit. The calculator works out your tax before and after the RA deduction, using the SARS 2025/2026 tax tables, and shows your estimated annual and monthly tax saving.
Why it matters
For someone in the 36% tax bracket, every R1,000 contributed to an RA can effectively cost only R640 after tax. That’s a strong incentive to start early — and the compounding effect over 20 or 30 years can be significant.
This tool helps you visualise that benefit before you commit, so you can decide on a contribution that balances current cash flow with future security.