What this page covers
Interest and dividends are treated very differently. Interest is taxed as income with a small annual exemption; South African dividends are taxed once, at source, at a flat rate.
| Item | 2026/27 | 2025/26 | Applies to |
|---|---|---|---|
| Interest exemption, under 65 | R23,800 | R23,800 | South African source interest |
| Interest exemption, 65 and over | R34,500 | R34,500 | South African source interest |
| South African dividends | Fully exempt from income tax | Same | 20% dividends tax withheld instead |
| Foreign dividends | Partial, formula based | Same | Effective maximum rate of 20% |
| Tax-free savings account | All of the above exempt | Same | Within the contribution limits |
| Marginal rate | Exemption under 65 | Tax saved | Exemption 65 and over | Tax saved |
|---|---|---|---|---|
| 18% | R23,800 | R4,284 | R34,500 | R6,210 |
| 26% | R23,800 | R6,188 | R34,500 | R8,970 |
| 31% | R23,800 | R7,378 | R34,500 | R10,695 |
| 36% | R23,800 | R8,568 | R34,500 | R12,420 |
| 41% | R23,800 | R9,758 | R34,500 | R14,145 |
| 45% | R23,800 | R10,710 | R34,500 | R15,525 |
| Payment | Rate |
|---|---|
| Dividends | 20% |
| Interest | 15% |
| Royalties | 15% |
| Visiting entertainers and sports people | 15% |
| Sale of South African property, natural person | 7.5% |
| Sale of South African property, company | 10% |
| Sale of South African property, trust | 15% |
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The figures on this page come from the body that publishes them and change on a schedule rather than continuously, which is what makes them worth keeping in one place. The interest exemption is per person, not per account, and it applies only to South African source interest. Interest from an offshore account does not qualify.
A non-resident is generally exempt from South African tax on interest, provided they were absent for at least 183 days and the debt is not connected to a permanent establishment here.
★ What this means in practice
A treaty may reduce any of the non-resident withholding rates. The rate in the table is the domestic one before a treaty is applied.
✕ Common mistakes
- The interest exemption is per person, not per account, and it applies on. The interest exemption is per person, not per account, and it applies only to South African source interest. Interest from an offshore account does not qualify.
- A non-resident is generally exempt from South African tax on interest, p. A non-resident is generally exempt from South African tax on interest, provided they were absent for at least 183 days and the debt is not connected to a permanent establishment here.
- A treaty may reduce any of the non-resident withholding rates. A treaty may reduce any of the non-resident withholding rates. The rate in the table is the domestic one before a treaty is applied.
- Taking a figure without its date. A number from a reference page is only as good as when it was last checked, which is why the date sits at the top of this one.
Notes on reading these figures
- The interest exemption is per person, not per account, and it applies only to South African source interest. Interest from an offshore account does not qualify.
- A non-resident is generally exempt from South African tax on interest, provided they were absent for at least 183 days and the debt is not connected to a permanent establishment here.
- A treaty may reduce any of the non-resident withholding rates. The rate in the table is the domestic one before a treaty is applied.
To put these figures to work, The Compound Growth Calculator runs the arithmetic on your own numbers; Tax-Free Savings Account Limits covers the same ground in ordinary language; Dividend Withholding Tax by Country goes into the detail this table only summarises; Dividend Yield Calculator is the related figure worth reading beside it; and SARS Income Tax Tables covers what this page leaves out.
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Frequently asked questions
How much interest is tax free?
R23,800 a year if you are under 65, and R34,500 if you are 65 or older. It applies only to South African source interest.
Are South African dividends taxed twice?
No. They are exempt from income tax, and 20% dividends tax is withheld instead.
What about foreign dividends?
They are partly exempt through a formula that gives an effective maximum rate of 20%, matching local dividends.
Does the exemption apply per account?
No, per person. Adding accounts does not add exemptions.
Do these exemptions apply inside a TFSA?
They are irrelevant there, because everything inside a tax-free savings account is already exempt.
What is withheld on payments to non-residents?
20% on dividends and 15% on interest and royalties, before any treaty reduction.