How are your preservation fund benefits taxed?

Lump sum benefits are taxed on the following basis:

Tax Rate Withdrawal Lump Sum Retirement Lump sum
0% 0 – R25,000 0 – R500,000
18% R25,001 – R660,000 R500,001 – R700,000
27% R660,001 – R990,000 R700,001 – R1,050,000
36 R990,001+ R1,050,001+

Source: South African Revenue Service

Annuity payments are taxed as income, according to the personal income tax tables.

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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