NEW THRESHOLDS, RETIREMENT REFORMS, AND THE COMPLIANCE GAP

The 2026/27 tax year has brought several quiet but significant changes that payroll departments must navigate to avoid SARS friction. The Personal Income Tax (PIT) threshold for those under 65 has moved to R99,000, with a corresponding primary rebate of R17,820. While these adjustments offer slight relief to employees, they require precise system calibration to ensure PAYE accuracy from the first pay cycle. 

A more complex challenge lies in the maturity of the Two-Pot Retirement System. As we enter the second full year of this regime, employees are increasingly utilizing their "savings pot" withdrawals. Employers must ensure their payroll systems are correctly handling the marginal tax rates applicable to these withdrawals, as errors here can lead to significant liability for the employer during the annual reconciliation process. 

Additionally, the annual tax deduction for contributions to all retirement funds is now capped at R430,000 (up from R350,000). For your high-earning executives, this change is a significant component of their 2026 financial planning. Ensuring your payroll data is used as a strategic tool rather than just a functional output is the difference between a compliant business and one facing a SARS audit. 

Is your payroll department merely processing payments, or are they proactively managing the tax risks introduced by the 2026/27 amendments?