How to get ready for provisional tax 2026
Just when the year is finding its rhythm again, SARS clears its throat.
Yes, yes, it’s that time of year.
Year-end, which means Provisional tax time.
The moment you’re reminded that potholes, load shedding and broken systems are not valid reasons for missing a tax deadline.
Unfortunate? Yes.
Optional? Not a chance.
If your company has a February year-end, your second provisional tax payment is due at the end of the month.
Let’s break it down piece by piece, without any panic.
1. What provisional tax actually is
Provisional tax is not an extra tax.
It’s a part payment of your company’s income tax.
You pay it in two compulsory instalments during the year:
- The first payment was due halfway through the year (usually end of August for February year-end companies)
- The second payment is due at year-end (usually end of February)
Important note:
The second payment is not automatically half.
It’s usually a top-up so that what you’ve paid equals your best estimate of the full year’s tax.
2. How it’s calculated (roughly)
At a high level, the calculation works like this:
1. Estimate your taxable profit for the year
2. Taxable profit × 27% = estimated company tax
3. Estimated tax − first provisional payment = amount due now
This is a working estimate, not the final number.
Your final tax is only confirmed once your ITR14 (company tax return) is submitted and assessed.
3. The 90% rule (and why guessing is expensive)
Even though this is not the final tax calculation, SARS still expects your estimate to be reasonably accurate.
For many companies, that means your year-end estimate must be around 90% of the final assessed tax.
If it’s too low, SARS can charge penalties and interestlater.
For companies with larger taxable incomes, a different test may apply. This is something your accountant should confirm for you.
Bottom line:
This is not the place for optimistic rounding.
4. What you must do by year-end
Your second provisional tax must be:
- Reasonably estimated
- Submitted on time (IRP6)
- Paid on time
Even if the amount payable is R0, you may still need to submit the IRP6.
Skipping the submission is where problems often start.
5. What happens if you get it wrong
Late payment
- SARS can charge a 10% late payment penalty
- Plus interest on the outstanding amount
Underestimation
Underestimation rules are complex, but the short version is this:
If your estimate is too low, SARS can charge an underestimation penalty (often 20%) plus interest.
Late or non-submission of the IRP6
If you don’t submit the IRP6:
- SARS may estimate your taxable income for you
- If the final provisional return is not submitted within a set period after year-end, SARS may treat it as a nil estimate
- That can trigger much larger penalties and interest later
6. The biggest mistake business owners make
They guess their tax.
Then the final return is submitted.
The gap is too big.
And the penalties arrive like an uninvited guest messing crumbs on your floor
This is avoidable, but only if you deal with it before February ends.
7. How to manage the cash flow (without panic)
The best long-term approach is boring, and effective:
Set aside tax monthly into a separate account.
That way, August and February stop feeling like ambushes.
Since we’re already in February, here’s what to focus on now:
8. What to do before February
If you have monthly management accounts, this becomes much easier
Confirm which accuracy rule applies to your company
If the payment looks large and cash is tight, ask about payment options and next steps sooner rather than later
Early conversations create options. Late ones create stress.
Provisional tax isn’t fun.
But it is manageable when you know what’s coming and plan for it calmly.
If you want help submitting your February provisional tax or reviewing your numbers, Let’s chat, I’m happy to help.
