How Much Tax Do You Pay on Interest in South Africa?

By | July 30, 2025

If you earn interest on your savings or investments in South Africa, it’s important to understand how it’s taxed by the South African Revenue Service (SARS). Interest income is considered part of your total annual income and is taxed according to your individual tax bracket.

Is Interest Income Taxable in South Africa?

Yes, interest income is taxable in South Africa. SARS classifies it as “income from other sources,” which means it is added to your total taxable income and taxed based on the prevailing income tax brackets.

Tax Brackets (For Individuals Under 65)

Your interest income will be taxed along with your other income according to these brackets:

Taxable Income (ZAR)Tax Rate
0 – 87,3000%
87,301 – 189,88018%
189,881 – 296,54026%
296,541 – 410,46031%
410,461 – 555,60036%
555,601 and above39%

Note: These rates apply to your entire income, not just the interest. Always check the latest tax tables on the SARS website or with a tax consultant.

Is Any Interest Income Tax-Free?

Yes, some interest income may be exempt from tax depending on the type of investment and your age:

  • Interest Exemption Thresholds (2022/2023):
    • R23,800 per year for individuals under 65
    • R34,500 per year for individuals 65 and older
  • Tax-Free Investments: Interest earned from Tax-Free Savings Accounts (TFSA) or certain government bonds is exempt from tax.

These exemptions are applied before calculating how much of your interest income is taxable.

Example: Interest Income Tax Scenario

Suppose you’re under 65 and earned R30,000 in interest for the tax year. The first R23,800 is tax-free. The remaining R6,200 would be added to your other income and taxed according to your bracket.

Should You Declare Interest Income?

Yes. Even if your interest falls below the exemption threshold, it’s still good practice to declare it on your annual tax return to avoid compliance issues with SARS.


Final Tips

  • Track your interest earnings throughout the year from bank accounts, savings products, and investments.
  • Make use of tax-free savings accounts for long-term benefits.
  • Consult a tax advisor for personalized advice, especially if you have multiple income sources or investments.

Need Help?

Contact SARS directly or speak to a qualified tax professional for assistance with your interest income and tax obligations.