Know your tax: understand income declarations and deductions

Last updated on 2nd June, 2025 at 03:21 pm

If you’re a non-provisional taxpayer, tax season closes on 20 October 2025. So in this article, the last instalment of our tax series, let’s get serious about income declarations and deductions. We’ll break down what it means to declare income or deductions to SARS, what you need to do, and how to do it in tax season.

Reading time: 6 minutes

In this article you’ll learn:

• All about income declarations and common deductions
• How to comply with SARS requirements

Almost everyone pays tax…

In South Africa, if you’re under 65 years of age and earn more than R95 750 a year, you must pay tax. If you’re older than 65, you get a bit more leeway with your income. Taxpayers over 65 and below 75 years of age will have their first annual income of R148 217 tax-free. Those taxpayers over 75 years of age will have their first R165 689 tax-free. Since the amount of tax you pay is based on your income, it’s obviously important to declare your income accurately to SARS.

What constitutes income declaration?

Declaring income and deductions to the South African Revenue Service (SARS) is a fundamental part of managing your taxes. You might think that you’ve got your IRP5 from your employer and so you’re all set. Not quite – you also need to report all your income and claim all allowable deductions. Your income includes:

• Salary
• Rental income
• Commissions
• Freelance earnings
• Investment income like interest, dividends and capital gains

All of this must be reported to SARS to comply with tax regulations and accurately calculate your tax liability.

“If you are a salary earner, you submit your IRP5 in your tax return and also include any allowable deductions if you have any to claim. These will reduce your tax bill,” explains Nicci Courtney-Clarke, COO and Head of Tax at TaxTim.

Don’t forget your deductions

Deductions are expenses you can claim to reduce your taxable income. For salaried employees, this typically includes limited categories such as home office expenses, wear and tear on equipment, donations, and contributions to retirement annuities. Freelancers, self-employed, or sole proprietors have a broader scope and can claim all business-related expenses incurred in generating their income. These deductions can significantly reduce your tax liability.

Read more on tax deductibles

When and how to make declarations

All taxpayers must submit an annual tax return, known as the ITR12. Your income will be declared in full in this tax return, along with any deductions.

Important dates for the 2025 tax season are:

• For non-provisional taxpayers (salaried employees): The deadline for submitting your 2025 tax return is 20 October 2025.
• For provisional taxpayers: If you’re self-employed or earn income from other sources, the deadline for submitting your 2025 tax return is 19 January 2026.

Failure to meet these declarations can result in penalties and interest on late submissions.

Did you know you can donate to your family, tax-free?

As a taxpayer, SARS permits you to donate up to R100 000 per year to family members without incurring donations tax. The receiver of the donation must declare it in the non-taxable section of their tax return, Courtney-Clarke explains. This amount is tax-free for them but does not affect your taxable income. However, if you donate more than R100 000, you become liable for donations tax at 20% of the value exceeding R100 000. The only exception is for donations to your spouse, which are exempt at any amount, and donations to registered public benefit organisations.