Provisional tax (IRP6) for rental income
Your employer deducts tax from your salary every month. Nobody deducts it from your rent. Provisional tax is how SARS collects that tax during the year instead of in one lump when you file — and for most landlords with a salary and a rental property, it applies.
Are you a provisional taxpayer?
An individual is a provisional taxpayer if they earn income that isn't a salary from a registered employer — and rent is exactly that. You are exempt only if you don't carry on a business and either:
- your total taxable income for the year is below the tax threshold, or
- your taxable income from interest, dividends, foreign dividends, rental from letting fixed property and remuneration from an unregistered employer is R30 000 or less.
The R30 000 test is on taxable income, not the rent you collect: rent less the expenses you may deduct (see our rental income tax guide for the list). A flat that lets for R8 000 a month with R4 000 a month of bond interest, levies, rates and repairs contributes R48 000 — over the limit on its own.
There is no longer a separate registration step. It is up to you to work out whether you are a provisional taxpayer and to request and submit your IRP6 returns on eFiling.
The three dates
| Payment | Due (tax year 1 March – end February) | What it covers |
|---|---|---|
| First IRP6 | 31 August | Half the tax you estimate for the year, less the PAYE withheld in the first six months. |
| Second IRP6 | Last working day of February | The full year's estimated tax, less PAYE and the first payment. This is the estimate the penalty is judged on. |
| Third (optional) | 30 September after year-end | A voluntary top-up once you know the real figures, to limit interest before you file. |
Working out the payments
- Estimate the year's taxable income: salary plus rental profit plus any other income, less deductions (retirement fund contributions and the like).
- Work out the tax on it using the year's tax tables, then subtract your rebates and any medical tax credits.
- Subtract the PAYE your employer withholds (or will withhold) for the period.
- First payment: half of what is left, less PAYE for the first six months. Second payment: the full year's figure, less all PAYE and the first payment.
A rough example
You earn a salary and have R60 000 of rental profit for the year. If that profit falls in the 31% bracket, it adds about R18 600 of tax your employer doesn't withhold. Pay around R9 300 by 31 August and the balance by the end of February, adjusted for anything that changed in between — a vacancy, a big repair, an increase.
For the first payment, your previous year's figures are a reasonable guide. For the second, use the real figures for the first eleven months and an honest estimate of the last — that is where the penalty bites.
The penalties
| Penalty | When it applies |
|---|---|
| Late payment — 10% | On a first or second payment made after its due date, plus interest. |
| Underestimation — 20% | Taxable income up to R1 million: your February estimate was below 90% of actual taxable income and below the basic amount. Taxable income over R1 million: your estimate was below 80% of actual. The penalty is 20% of the tax shortfall. |
| Late submission | An IRP6 that isn't submitted counts as a zero estimate, which makes the underestimation penalty likely. |
The basic amount is, broadly, the taxable income on your most recent assessment issued at least 14 days before the payment is due (increased by 8% a year if that assessment is more than 18 months old). Estimating at least the basic amount protects a landlord whose income doesn't exceed R1 million.
Keep it simple through the year
- Record rent and deductible expenses as they happen, not in a rush the week before the deadline.
- Set aside a share of each month's rental profit for tax — at your marginal rate, that is roughly the money the two payments will need.
- Keep the slips: SARS can ask for evidence of every deduction.
Mastendi has the figures ready before 31 August
Rent and every deductible expense are recorded against the SARS line items through the year. Mastendi gives you an indicative provisional-tax estimate from the year's figures, reminds you before the IRP6 deadlines, and keeps the evidence for each deduction a click away — so February is a download, not a reconstruction.
Start your 30-day free trialFrequently asked questions
Does rental income make me a provisional taxpayer?
Usually. You are exempt only if your taxable income from interest, dividends, foreign dividends and rental is R30 000 or less (and you don't carry on a business), or your total taxable income is below the tax threshold.
Is the R30 000 on gross rent or profit?
On taxable income — rent less the expenses you may deduct.
When are the payments due?
31 August and the last working day of February, with an optional top-up by 30 September.
What if I underestimate?
SARS can add a 20% penalty on the tax shortfall if your February estimate was too low: below 90% of actual and below the basic amount (income up to R1 million), or below 80% of actual (over R1 million).
Can I ask my employer to deduct more tax instead?
Ask your employer or a tax practitioner whether additional PAYE is an option for you, but if you are a provisional taxpayer you still need to submit your IRP6 returns.
Disclaimer: This guide is general information for South African landlords and is not tax advice. Tax tables, thresholds and SARS procedures change each year, and your situation may differ. Confirm the current rules with SARS (see the Guide for Provisional Tax on sars.gov.za) or a registered tax practitioner before acting.