How this calculation works
Tax on the new qualifying benefit is the cumulative retirement/severance table tax on prior relevant benefits plus the new benefit, less table tax on prior benefits alone. The current first R550 000 band is taxed at 0%.
A worked example
A qualifying R650 000 benefit with no prior relevant benefits produces R18 000 tax and R632 000 after tax.
Assumptions & limitations
- Only use benefits that qualify for the SARS severance/retirement table. Ordinary leave pay, notice pay, bonuses and resignation payments may be taxed differently.
- Include all relevant prior benefits from the dates specified by SARS. The employer must obtain a tax directive; this is an estimate, not a directive or a labour-law entitlement calculation.
