Tax Edge Insights
IS YOUR TURNOVER R2.3 million per year, ARE YOU AWARE OF TURNOVER TAX?
25 Jun 2026 · By Nontle Ndlovu
What is turnover tax?
Turnover tax is a simplified tax system for very small businesses in South Africa. It taxes your turnover instead of your profit. That cuts admin and compliance work for qualifying micro businesses.
It applies a low tax rate to your annual turnover, meaning total sales. It is meant for businesses with turnover of R2.3 million or less.
Taxes it replaces
- Income tax
- VAT (optional; you may elect to stay in VAT)
- Provisional tax
- Capital gains tax
- Dividends tax
Who qualifies
Any micro business with turnover under R2.3 million per year. That includes:
- Sole proprietors
- Partnerships
- Close corporations
- Companies
- Co-operatives
Turnover tax rates (2026/2027 year of assessment)
| Turnover (R) | Tax rate |
|---|---|
| 0 – 600 000 | 0% |
| 600 001 – 950 000 | 1% of each R1 above R600 000 |
| 950 001 – 1 400 000 | R3 500 + 2% of amount above R950 000 |
| 1 400 001 – 2 300 000 | R12 500 + 3% of amount above R1 400 000 |
Benefits
- Very low tax rates
- Much less admin; fewer returns and fewer tax types
- Ideal for small or informal businesses
- Simple calculations based on turnover, not profit
When you pay
- First payment: six months into the tax year
- Second payment: end of the tax year
- Final payment: after submitting the annual TT03 return
How to register
- SARS Online Query System (SOQS)
- eBooking for a SARS branch appointment
- Email submission of the TT01 form
In simple terms
Turnover tax suits a small business that wants less paperwork. Your sales must stay under R2.3 million per year. It is one of the easiest tax systems for micro entrepreneurs.