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What are the tax benefits of a retirement annuity?
Contributions are tax deductible
When you contribute to your retirement annuity, you lower your taxable income. That means that you will pay less tax.
Tax deductions are limited to 27.5%, up to a maximum of R 350 000 per year
The limit applies to all of your retirement savings combined
Contributions exceeding these limits roll over for future deductions
You can take a tax-free lump sum when you retire
When you retire you can take up to a third of your retirement annuity as a lump sum (or all of it if it‘s worth less than R 247 500).
The first R 550 000 is not taxed
The next R 220 000 is taxed at 18%
The next R 385 000 is taxed at 27%
Any amount after that is taxed at 36%
Returns on your investment are tax-free
You don‘t pay tax on retirement annuities investment returns, such as interest income, dividends and capital gains.
How can you maximise the tax benefits of your retirement annuity?
When you invest in a retirement annuity, you lower your taxable income for the year, which could result in a tax refund from SARS. Use the calculator below to see how increasing your retirement annuity contribution can lower the amount of income tax you pay.
To see the latest income tax rates, please visit the SARS website.
Step 1: Calculate your income tax
Contribution in %
Your retirement annuity and tax season
Documents you need when submitting a tax return
You need an income tax certificate, which is issued by your retirement annuity provider(s). The certificate shows how much you contributed to the retirement annuity during the year. You include that amount on your tax return and SARS calculates how much of your contributions it will allow as a tax deduction for that year.
How to get your tax certificate
To get your tax certificate for your 10X retirement annuity, and other 10X retirement products, log in to your My10X account and download it from the Documents section.
Go to my10x
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