Demand-ranked tax questions · Business · Question 01 of 20
How much tax does a small business pay in South Africa?
A standard company generally pays corporate income tax at 27% of taxable income, not turnover. A qualifying Small Business Corporation (SBC) uses graduated 2026/27 rates, starting at 0% on the first R99,000 of taxable income. The lower table is valuable, but only if the company meets every SBC requirement.
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The points that decide the answer
- Taxable income starts with accounting profit, then adjusts for tax rules, allowances and disallowed items.
- For 2026/27, a qualifying SBC pays 0% up to R99,000, then graduated rates that rise to 27% above R550,000.
- SBC status depends on matters such as ownership, shareholders, investment income and the nature of services supplied. Turnover alone is not enough.
- Provisional tax payments spread the expected annual liability across the year; they are not a separate tax.
A practical way to handle it
- Confirm the legal entity and year of assessment.
- Reconcile revenue, expenses, assets, payroll and shareholder accounts.
- Test the SBC requirements rather than assuming the label applies.
- Estimate taxable income and provisional payments before deadlines.
Common mistakes
- Applying 27% to turnover
- Claiming SBC rates without testing eligibility
- Treating owner drawings as business expenses
What to keep on file
Annual financial statements, general ledger, asset register, shareholder register, payroll records and prior returns.
Source and scope
Based on current SARS guidance, reviewed on 28 August 2026. This is general information, not tax advice. Rates, thresholds and outcomes depend on the tax year and your facts. Regulated submissions and advice are handled through registered partners where required.
Is turnover tax better than normal income tax? Which business expenses are tax deductible in South Africa?