Every provisional tax calculator splits your estimate in half for the August and February IRP6 payments. I built one that also checks whether the estimate you’re about to declare would actually protect you from SARS’s 20% underestimation penalty.
The part I think is actually useful, not just another 50/50 splitter.
It runs both safe-harbour tests, not just one. Your February estimate is safe if it’s at or above your “basic amount” (last year’s assessed income), or at least 90% of what your actual income turns out to be. Most calculators only ask for the basic amount. This one also lets you enter a private “what do I realistically expect” figure and shows the exact rand penalty exposure if your declared estimate wouldn’t cover it.
It shows the trade-off, not just a verdict. Pay at least your basic amount and you’re penalty-proof (up to R1 million actual income), but you may be paying tax on more than this year’s real profit if it’s a quieter year. Pay your honest lower estimate and you keep more cash now, but there’s a breakeven actual-income figure above which the penalty starts to bite. Both numbers, side by side.
It flags the R1 million cliff. Above that, the basic-amount safe harbour disappears entirely, SARS only accepts an estimate within 80% of actual income, no matter how big your basic amount is. Easy to miss if you’re relying on “I paid at least what I paid last year.”
It separates the penalty from the interest. The basic-amount safe harbour avoids the 20% penalty, but not the separate interest SARS charges on any shortfall from 1 October. Only the optional September top-up payment stops that.
It’s general information using the 2026/27 tax tables and the Fourth Schedule’s underestimation penalty rules, not tax advice, and it doesn’t model the section 6B medical credit, foreign tax credits or the separate 10% late-payment penalty. I’d be glad to hear if the basic-amount escalation matches what your own assessment history looks like, and whether the trade-off framing actually changes what you’d declare.
This is actually one of the gaps I always find annoying with the basic 50/50 tools. The one safe harbour test people forget is the one for taxpayers under R1 million taxable income, where you’re covered if your estimate is within 90% of actual assessed liability, versus the basic amount test for the prior year assessment. Most calculators just do the flat 50/50 split and don’t tell you that you can actually get penalised even if you paid something, if SARS later assesses way higher than what you declared.
Did you build in the higher of basic amount plus inflation uplift too? That’s the bit that catches people out on the August estimate specifically, because if your prior assessment is more than 18 months old SARS adds an uplift percentage before comparing.
I’d also suggest surfacing the effective interest cost of underpayment next to the penalty, since the 20% penalty on top of interest makes a real difference when deciding whether to just overestimate slightly and get a refund instead. Nice work regardless, will test it against my own IRP6 this weekend.
Kabelo is right about that uplift, it is 8% a year if your latest assessment is older than 18 months, and I have watched people trip over it every August because they only remember last year’s actual number, not the escalated one SARS expects. The interest point is the one most folks underestimate though, SARS is charging 10.25% on the shortfall right now, compounding daily from the date it was owing, so a small miss in February can cost more than the 20% penalty makes obvious at first glance. My own habit after 25 years of watching clients gamble on this, if your income swings around, pay the higher number and sort the difference out at assessment, the cash flow pain now is nothing next to a penalty letter with your name on it.
I have just been hit by a penalty but manageable. I was expecting something and put something away each month earning some interest. Also to ease cash flow - can only pay later and live with the extra this might be (so borrow from SARS) but a 10.25% is steep and an incentive to file correctly.
This is actually useful because it shows you what you’re trading off instead of just telling you what to do. Most people don’t understand that playing it safe with your basic amount means you’re lending money to SARS interest-free if your year was quieter, so seeing both sides of that choice matters. The penalty risk breakdown is the bit that’s missing from every other tool I’ve seen, because knowing exactly how much you stand to lose if things go better than expected helps you actually decide instead of just guessing. One thing though, the R1 million cliff is going to confuse a lot of small business people who don’t realise SARS changes the rules at that point, so maybe worth a separate explainer on that because most folks filing IRP6 have no idea their safe harbour disappears up there.