How to calculate the tax return for my retirement annuity?

Your retirement annuity contributions qualify for a tax deduction, subject to a maximum cap of 27,5% of income and a rand limit of R350,000 pa. These limits include any contributions made to your workplace pension or provident fund.

To calculate your retirement annuity tax refund, you must multiply the amount of your contribution by your marginal tax rate (the highest tax rate applied to any part of your income). So if you contribute, say R12,000 per year, and your marginal tax rate is 25%, then you would get a refund of R3,000. If your marginal tax rate was 41%, your refund would be R4,920.  

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.

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