PROVISIONAL TAX: THIRD PAYMENT AND PENALTY RISKS — WHAT YOU NEED TO KNOW

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The third provisional tax payment is voluntary — but ignoring it could cost you in interest and penalties.

For individuals and companies with February year-ends, this payment is due by 30 September. For entities with other year-ends, it’s due six months after the tax year-end.
This top-up payment is a strategic opportunity to minimise interest and penalties on tax shortfalls not covered by the first two provisional payments.

 

⚠️ Why SARS May Penalise You

A penalty may be levied if your actual taxable income (as declared in your final tax return, ITR12) exceeds the estimated income submitted in your second provisional return (IRP6).
This is especially relevant if your estimate was too low — even unintentionally.

SARS applies different rules depending on your taxable income:

 

💼 Taxable Income of R1 Million or Less

You may face an under-estimation penalty if:

  • Your second provisional estimate is less than 90% of your actual taxable income, and
  • It’s also less than your ‘basic’ amount (your taxable income from your most recent assessment)

Penalty Calculation:
20% of the difference between the tax payable on your estimate and the lesser of:

  • Tax on 90% of your actual taxable income
  • Tax on your basic amount

 

💼 Taxable Income Greater Than R1 Million

SARS does not consider the basic amount.
Your second provisional estimate must be at least 80% of your actual taxable income.

Penalty Calculation:
20% of the difference between the tax payable on your estimate and the tax on 80% of your actual taxable income.

 

✅ What You Should Do

We recommend reviewing your previously submitted IRP6 returns for the relevant tax year. Compare these to your actual or best-estimate taxable income.
If there are discrepancies — such as:

  • Deductions previously claimed that are no longer applicable
  • Abnormal income fluctuations