As tax season approaches, many South Africans are looking for ways to legally reduce their tax burden. While most people know about retirement annuities and tax-free savings accounts, there are a few lesser-known tax breaks that can make a significant difference.
According to BusinessTech, South Africans are expected to face higher taxes in 2025 due to inflationary bracket creep and a lack of tax bracket adjustments. However, financial experts stress that taking advantage of available deductions can help offset some of the impact. Here are five tax-saving strategies that many taxpayers overlook:
1. Medical aid tax credits – Are you claiming what you’re owed?
If you’re paying for medical aid, you might be entitled to a monthly tax credit from SARS. This applies not only to your own contributions but also to those made on behalf of dependants. Additionally, out-of-pocket medical expenses that exceed 7.5% of your taxable income may qualify for further deductions.
Many taxpayers assume their medical aid provider handles this automatically, but it’s worth checking your tax certificate to ensure you’re claiming the full benefit.
2. Donations to charity – A win-win for you and a good cause
Donating to a Public Benefit Organisation (PBO) doesn’t just support a worthy cause – it can also earn you a tax break. If the organisation is registered under Section 18A, you can claim up to 10% of your taxable income in deductions.
Just be sure to keep a valid donation certificate from the charity, as SARS will require proof if you claim this deduction.
3. Home office expenses – More than just rent and WiFi
With more people working remotely, home office deductions are often underutilised. If you work exclusively from a dedicated space at home, you could claim a portion of:
-
Rent or bond interest
-
Electricity and water
-
Office supplies
-
Internet and phone bills
To qualify, SARS requires proof that your home office is used regularly and exclusively for work – a spare bedroom with a desk might count, but a laptop on your dining table won’t.
4. PAYE deductions – Don’t assume your employer gets it right
If you’re employed under the Pay-As-You-Earn (PAYE) system, your employer is responsible for deducting the correct tax from your salary. However, errors can happen, and if too much is deducted, you could be owed a refund.
It’s good practice to check your IRP5 certificate and compare it to your payslips to ensure that deductions are accurate. This small step could prevent nasty surprises—or even secure you a tax refund.
5. Provisional tax – A must-know for freelancers and side hustlers
If you earn additional income beyond your salary – such as from freelancing, rental properties or investments – you may need to register as a provisional taxpayer. Paying provisional tax correctly can prevent penalties and ensure you don’t get hit with a large tax bill at the end of the year.
SARS requires provisional taxpayers to submit tax estimates twice a year (in August and February). If you’ve recently started earning extra income, it’s worth checking whether you need to register to avoid compliance issues.
While tax season can feel overwhelming, understanding these overlooked tax breaks can help you keep more of your hard-earned money.
As first reported by BusinessTech, South Africans will be dealing with rising tax burdens in 2025. However, with proper planning and by taking advantage of available deductions, you can legally reduce your tax liability.
For a full breakdown of 2025’s tax changes, read BusinessTech’s original report here.
Also read:
Alexforbes sounds alarm – South Africans draining retirement savings
Picture: Gallo Images