What this page covers
Quick answer: Bracket creep is the extra tax you pay when income tax brackets do not rise with inflation. In 2025/26 South Africa left its brackets, rebates and tax-free threshold unchanged. Had they been raised by 3.2%, the 2025 inflation rate, a taxpayer earning R500,000 would have paid about R1,765 less tax a year, and anyone earning R1 million or more about R3,787 less.
This study recalculates 2025/26 income tax with every bracket, the primary rebate and therefore the tax-free threshold raised by 3.2%, and compares the result with the tax actually charged under the unchanged tables. It covers taxpayers under 65 with no deductions, so the figures isolate the effect of the freeze.
Key findings
- A taxpayer earning R500,000 paid about R1,765 more in 2025/26 than under inflation-adjusted tables, R147 a month.
- The cost rises with income to about R3,787 a year at R1 million and stays flat above that, because the top bracket starts higher than most incomes reach.
- As a share of income the freeze hit the middle hardest: 0.46% of income at R250,000, against 0.25% at R1.5 million.
- The tax-free threshold stayed at R95,750 instead of about R98,817, so roughly R3,000 more of every taxpayer's income was taxed at 18% or more.
- The 2026/27 Budget raised the brackets by about 3.4% and the threshold to R99,000, close to where indexation would have put them, but the extra tax collected in 2025/26 was not returned.
For journalists: press summary
A TradeAnswers study finds that leaving income tax brackets unchanged in 2025/26 cost South African taxpayers between about R550 and R3,800 each, compared with tables adjusted for 3.2% inflation, with middle incomes hit hardest as a share of income.
- R1,765 extra tax a year at a R500,000 income
- R3,787 extra tax a year at R1 million and above
- 0.46% of income, the heaviest share, at R250,000
Chart: download the PNG. Data: download the CSV. Suggested credit: “Source: TradeAnswers, Bracket Creep in South Africa: What the 2025/26 Tax Freeze Cost Taxpayers”, with a link to this page. Questions: contact@tradeanswers.co.za.
⬇ Download this chart (PNG) · Free to reuse with the credit “Source: TradeAnswers, Bracket Creep in South Africa: What the 2025/26 Tax Freeze Cost Taxpayers” (CC BY 4.0).
| Taxable income | Tax under the 2025/26 tables | Tax with tables raised 3.2% | Extra tax a year | Extra tax a month | Share of income |
|---|---|---|---|---|---|
| R150,000 | R9,765 | R9,213 | R552 | R46 | 0.37% |
| R250,000 | R28,797 | R27,635 | R1,162 | R97 | 0.46% |
| R350,000 | R54,797 | R53,635 | R1,162 | R97 | 0.33% |
| R500,000 | R100,272 | R98,507 | R1,765 | R147 | 0.35% |
| R750,000 | R191,942 | R188,738 | R3,204 | R267 | 0.43% |
| R1,000,000 | R292,284 | R288,497 | R3,787 | R316 | 0.38% |
| R1,500,000 | R497,284 | R493,497 | R3,787 | R316 | 0.25% |
Source: TradeAnswers, Bracket Creep in South Africa: What the 2025/26 Tax Freeze Cost Taxpayers. Free to reuse with attribution (CC BY 4.0).
| Bracket starts at | 2025/26 (unchanged) | 2025/26 raised 3.2% | 2026/27 (actual) |
|---|---|---|---|
| Tax-free threshold | R95,750 | R98,817 | R99,000 |
| 26% from | R237,100 | R244,700 | R245,100 |
| 31% from | R370,500 | R382,400 | R383,100 |
| 36% from | R512,800 | R529,200 | R530,200 |
| 39% from | R673,000 | R694,500 | R695,800 |
| 41% from | R857,900 | R885,400 | R887,000 |
| 45% from | R1,817,000 | R1,875,100 | R1,878,600 |
| Primary rebate | R17,235 | R17,787 | R17,820 |
TradeAnswers · CC BY 4.0
| Item | Value used | Source |
|---|---|---|
| 2025/26 tables | Unchanged from 2024/25: first bracket to R237,100, primary rebate R17,235 | SARS |
| Inflation adjustment | 3.2%, the 2025 average headline CPI | Statistics South Africa |
| What was adjusted | Every bracket threshold and the primary rebate; rates unchanged | Study method |
| Taxpayer | Under 65, no retirement, medical or other deductions | Study method |
| 2026/27 tables | First bracket to R245,100, primary rebate R17,820 | SARS Budget 2026 |
TradeAnswers · CC BY 4.0
How these figures work
Income tax in South Africa is charged on brackets: the first R237,100 at 18%, the next slice at 26% and so on, less a rebate that every taxpayer receives. When salaries rise with inflation but the brackets do not, more of each rand falls into higher brackets and the rebate is worth less in real terms. That is bracket creep, sometimes called fiscal drag.
The study takes the 2025/26 tables, which were identical to 2024/25, and recalculates each income level with every bracket threshold and the primary rebate raised by 3.2%. The difference between the two results is the extra tax caused by the freeze alone. Current tables are in the SARS income tax tables and the inflation series in the inflation history.
A worked example
At R250,000 the 2025/26 tables charge 18% on the first R237,100 (R42,678) plus 26% of the R12,900 above it, less the R17,235 rebate: R28,797. With the tables raised 3.2%, the first bracket ends at R244,700 (R44,044), only R5,300 is taxed at 26%, and the rebate is R17,787: R27,635.
The difference, R1,162 a year, is what the freeze cost that taxpayer, about R97 a month. The marginal tax rate calculator shows where your own income falls in the brackets.
✕ Common mistakes
- Thinking a freeze is not a tax increase. Rates did not change, but real tax did, because inflation pushed more income into higher brackets.
- Comparing only the top rate. The rebate and the threshold matter as much as the brackets, especially for lower incomes.
- Assuming the next adjustment refunds the gap. Raising the brackets in 2026/27 stopped the creep going further; the 2025/26 tax was not returned.
Notes on reading these figures
- The figures are for taxable income after deductions. Retirement contributions and medical credits reduce tax but do not change the size of the freeze effect much.
- Taxpayers 65 and older also receive the secondary rebate, which was frozen too, so their effect is slightly larger.
- The 3.2% benchmark is the 2025 average inflation rate; using a different inflation measure changes the figures in proportion.
The PAYE calculator and the SARS tax refund calculator work out tax on your own figures, and how the Budget speech affects markets covers what each February announcement means beyond the tables.
See also: SARS Income Tax Tables and South African Inflation (CPI) History.
Spotted an outdated figure? If a figure or rate on this page no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
How these figures are compiled, checked and corrected: our data methodology.
Cite this page
Barosso, G. (2026, November 2). Bracket Creep in South Africa: What the 2025/26 Tax Freeze Cost Taxpayers. TradeAnswers. https://www.tradeanswers.co.za/bracket-creep-south-africa.htmlBarosso, G (2026) Bracket Creep in South Africa: What the 2025/26 Tax Freeze Cost Taxpayers, TradeAnswers, figures current at 2 November 2026, https://www.tradeanswers.co.za/bracket-creep-south-africa.htmlThe tables and the CSV on this page are free to reuse under a CC BY 4.0 licence: attribution with a link to this page. See the Press & Data Licence page.
See also: The Annual Cost of Trading in South Africa: 2026 Study.
Frequently asked questions
What is bracket creep?
Bracket creep is the rise in real income tax that happens when income tax brackets, rebates and thresholds are not raised in line with inflation, so salary increases that only keep pace with prices push more income into higher brackets.
Were tax brackets adjusted in 2025/26?
No. The 2025/26 brackets, rebates and tax-free threshold were the same as in 2024/25.
How much did the freeze cost me?
In this study between about R552 and R3,787 a year, depending on income, compared with tables raised by 3.2%. The table above shows seven income levels.
Were brackets adjusted in 2026/27?
Yes. The 2026/27 Budget raised the brackets by about 3.4% and the primary rebate to R17,820, taking the tax-free threshold for people under 65 to R99,000.
Can I reuse these figures?
Yes. The tables and the CSV are licensed CC BY 4.0: reuse them with attribution and a link to this page. The citation box gives the reference in APA and Harvard style.
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