What is the tax table for resignation or retrenchment withdrawals?

Withdrawals before retirement (on resignation, dismissal, or retrenchment) use a separate table with a much lower tax-free threshold of R27,500 lifetime. The first R27,500 is tax-free; the next R660,000 is taxed at 18%; amounts between R660,000 and R990,000 at 27%; and above R990,000 at 36%. This makes early withdrawals significantly less tax-efficient than retirement lump sums.

Is the R550,000 tax-free amount a per-withdrawal or lifetime limit?

It is a lifetime limit. SARS tracks all retirement fund lump sums you have received across your lifetime — including any resignation/retrenchment withdrawals (which use their own R27,500 threshold). Once you have used your lifetime tax-free amount, subsequent lump sums are fully taxable from the first rand according to the applicable table.

SA Retirement Fund Withdrawal Tax Calculator South Africa

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When to use this calculator

Before choosing between saving, investing or changing a contribution.
When you want to compare cautious, base and optimistic return assumptions.
When you need a projection before making a longer-term decision.
When you want to see whether starting earlier or contributing more changes the outcome more.

A realistic South Africa planning example

Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.

A realistic South Africa planning example
Input	Value
Withdrawal Amount (R)	1000000
Withdrawal Type	Retirement (lump sum at retirement)

After entering these figures, review tax-free portion, tax on withdrawal and net proceeds together rather than in isolation. Then rerun the tool with one input adjusted.

How to read your results

Tax-Free Portion

Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result.

Tax on Withdrawal

Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result.

Net Proceeds

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

Effective Rate

The effective rate lets you compare options on a like-for-like basis rather than being misled by different compounding periods or fee structures.

Common mistakes

!Using an assumption that is not supported by a current local quote, bill, statement or official source.
!Treating a generic estimate as a lender, provider, payroll or tax authority decision.
!Mixing monthly and annual inputs without converting them consistently.
!Testing only one scenario instead of checking how a cautious assumption changes the result.

What to do next

Run a second scenario with a cautious assumption so you can see the downside clearly.
Compare the result with the related calculators below before making a decision.
Check current local rules, eligibility and provider terms before applying or committing money.
Keep a record of the assumptions so you can update the estimate when a quote, bill or pay figure changes.

Frequently asked

For a retirement lump sum taken at retirement (from a pension, provident, or retirement annuity fund), the first R550,000 is tax-free over your lifetime. This is a cumulative lifetime limit — if you previously withdrew a lump sum at retirement and used part of the tax-free portion, the remainder is reduced accordingly.

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