SARS (the South African Revenue Service) may issue you a tax refund if you’ve paid more tax than what’s legally due, based on your income, deductions, and credits for that specific tax year. Here’s how to know whether you’re eligible for a SARS refund:
1. You’ve Overpaid Tax (PAYE)
If your employer deducted too much PAYE (Pay-As-You-Earn) tax from your salary during the year, you could be due a refund. This commonly happens when:
- Your income fluctuates during the year
- You worked part of the year
- You had more deductions than your employer calculated
2. You Claimed Tax Deductions or Credits
SARS allows you to reduce your tax liability through certain deductions and tax credits. If these reduce your final tax bill, you may qualify for a refund. Examples include:
- Medical aid contributions and expenses
- Retirement annuity contributions
- Donations to SARS-recognised charities
- Home office expenses (if you qualify)
3. You Carried Forward Tax Losses
If you had losses in previous years and carried them forward, these can offset your current income, possibly reducing your tax to the point where SARS owes you a refund.
4. You Earned Non-Taxable or Exempt Income
Certain income streams are not taxable — for example:
- Some types of interest (below the threshold)
- Tax-free savings account returns
- Certain capital gains under the exemption limit
If these make up a portion of your income, your taxable income might be lower than expected, resulting in a refund.
5. You Qualify for Tax Treaty Benefits
If you earn income from another country and qualify under a double taxation agreement, you may get a refund on tax that shouldn’t have been charged locally.
6. You Filed Your Tax Return
To receive a refund, you must submit your annual income tax return to SARS. Once submitted, SARS will assess your return to determine whether you owe money or are due a refund.
7. You Received an ITA34 Assessment
After processing your return, SARS will issue an ITA34 — a notice of assessment. If you’re due a refund, it will be clearly stated there, along with how and when it will be paid into your bank account.
Monitor SARS Communication
Always watch for emails, SMSes, or eFiling messages from SARS. These will include important updates on your refund status or any additional documents required.
Not Everyone Qualifies
Not all taxpayers will receive a refund. It depends on your personal tax profile, how much was paid throughout the year, and whether you claimed all available deductions.
Tips to Maximise Your Chances of a Refund:
- Submit your tax return on time and accurately
- Keep records of your income and deductible expenses
- Use eFiling to speed up processing
- Consult a tax practitioner if you’re unsure about your status
If you suspect you’re owed a refund or need help understanding your SARS assessment, contact SARS directly or speak to a registered tax consultant for professional guidance.