PAYE, the primary rebate, and UIF — explained against a real example payslip.
A South African payslip’s PAYE line looks intimidating until you notice the rebate sitting quietly beneath it — a fixed amount subtracted from the tax bill itself, not from your income. Here’s how the two work together, using a real example.
The scenario
On a gross salary of R30,000/month (R360,000/year), here’s the full breakdown this calculator produces:
- Gross Salary
- R30,000/moR360,000/yr
- PAYE Income Tax
- R4,681/moR56,172/yr
- UIF (Unemployment Insurance Fund)
- R177/moR2,125/yr
- Effective Tax Rate
- 16.2%
Employer pays
Total fund contribution
Line by line
PAYE. South Africa’s Income Tax is progressive, administered by SARS, taxed in bands rather than at one flat rate. Rather than a tax-free threshold band, SARS instead applies a fixed annual primary rebate directly against the tax calculated from the bands — every taxpayer under 65 gets the same rebate, which is why two people on different salaries can see very different effective tax rates even though both used the same bands.
UIF (Unemployment Insurance Fund). A mandatory 1% employee contribution, matched by a further 1% from your employer, funding unemployment benefits. SARS caps the earnings this is calculated on, so the maximum monthly UIF deduction stays fixed even for high earners — it doesn’t keep growing as a percentage of an ever-higher salary.
What this calculator doesn’t model
Two common adjustments aren’t included here: the larger rebate SARS gives taxpayers aged 65 and older, and medical scheme fees tax credits for anyone contributing to a registered medical aid. Both reduce tax payable below what’s shown here, so if either applies to you, your real payslip should show a smaller deduction than this example.
