Work out how much income tax your company owes under South Africa’s Small Business Corporation (SBC) rules, and see how much you save compared to the standard 27% company tax rate.
What Is Small Business Corporation Tax?
A Small Business Corporation, or SBC, is a company or close corporation that qualifies for reduced income tax rates under Section 12E of the Income Tax Act. Instead of paying a flat 27% on all taxable income like a standard company, a qualifying SBC pays tax on a sliding scale that starts at 0%. This can save a small business tens of thousands of rand a year.
To qualify as an SBC, a business generally needs to meet all of the following:
- All shareholders or members must be natural persons (no companies or trusts as shareholders)
- Gross income for the year must not exceed R20 million
- Investment income and income from a personal service may not exceed 20% of total receipts and accruals
- The business must be a private company, close corporation, or personal liability company registered in South Africa
How the SBC Tax Calculator Works
This calculator applies the SBC tax brackets for years of assessment ending between 1 April 2026 and 31 March 2027, then compares the result against standard company tax so you can see the saving.
- Enter your company’s annual turnover. This checks the R20 million eligibility threshold.
- Enter your taxable income for the year, meaning gross income less allowable deductions, not turnover.
- Click Calculate.
- Review your SBC tax payable, the equivalent standard company tax, your saving, effective tax rate, and profit after tax.
SBC Tax Brackets for 2026/27
Taxable income up to R99,000: 0% R99,001 to R365,000: 7% of the amount above R99,000 R365,001 to R550,000: R18,620 plus 21% of the amount above R365,000 Above R550,000: R57,470 plus 27% of the amount above R550,000
Standard company tax, by comparison, is a flat 27% on all taxable income, regardless of how much profit the company makes.
Worked Example
Consider a close corporation with an annual turnover of R1,500,000 and taxable income of R400,000 for the year.
Taxable income of R400,000 falls in the R365,001 to R550,000 bracket:
Tax = R18,620 + 21% × (R400,000 − R365,000) Tax = R18,620 + R7,350 Tax = R25,970
Under standard company tax, the same R400,000 would attract R400,000 × 27% = R108,000. By qualifying as an SBC, this business pays R25,970 instead of R108,000, a saving of R82,030 in the same tax year. Profit after tax under SBC rates comes to R374,030.
Why Taxable Income, Not Turnover, Drives the Tax
Turnover only determines whether a business is eligible for SBC status. The actual tax is calculated on taxable income, which is turnover less allowable business expenses, wear and tear, and other deductions permitted under the Income Tax Act. Two companies with the same turnover can pay very different amounts of tax depending on their deductible expenses.
A Note on Accuracy
SARS reviews tax brackets and thresholds at each Budget Speech, and figures can change between tax years. This calculator uses the SBC rates confirmed for the 2026/27 year of assessment. Always check the current SARS tables before relying on these figures for filing or provisional tax purposes, and consult a registered tax practitioner for advice specific to your business.