Retirement Lump Sum Tax Calculator
Work out the tax on a lump sum from a pension, provident or retirement annuity fund, at retirement or when you resign, including the effect of lump sums you took before.
Your lump sum
Worked example
These are the calculator's starting values, so the results above match this example until you change an input.
Sipho retires at 63 and takes a taxable lump sum of R 600 000 from his pension fund. He has never taken a lump sum before.
On the 2026/27 retirement table the first R 550 000 is tax-free and the next band is taxed at 18%, so the tax is 18% of the R 50 000 above R 550 000: R 9 000. He receives R 591 000, an average rate of 1,5%.
Had he resigned instead and taken the same amount as a withdrawal, the withdrawal table would tax 18% of everything above R 27 500: R 103 050.
How lump sums are taxed
Lump sums from retirement funds are not taxed like a salary. SARS uses two separate tables. The retirement table applies at retirement, on retrenchment (severance benefits) and to lump sums paid when a member dies; its first R 550 000 is tax-free. The withdrawal table applies when you resign, are dismissed or move out of a fund before retirement and take the money in cash; its first R 27 500 is tax-free.
Both tables are cumulative. Earlier taxable lump sums are added first and use up the lower brackets. Both tables count the same earlier amounts: retirement lump sums since 1 October 2007, withdrawal lump sums since 1 March 2009 and severance benefits since 1 March 2011. Enter those earlier amounts in the second box.
The 2026/27 tables
| Retirement, retrenchment or death | Tax |
|---|---|
| R 1 – R 550 000 | 0% |
| R 550 001 – R 770 000 | 18% of the amount above R 550 000 |
| R 770 001 – R 1 155 000 | R 39 600 + 27% of the amount above R 770 000 |
| R 1 155 001 and above | R 143 550 + 36% of the amount above R 1 155 000 |
| Withdrawal before retirement | Tax |
|---|---|
| R 1 – R 27 500 | 0% |
| R 27 501 – R 726 000 | 18% of the amount above R 27 500 |
| R 726 001 – R 1 089 000 | R 125 730 + 27% of the amount above R 726 000 |
| R 1 089 001 and above | R 223 740 + 36% of the amount above R 1 089 000 |
What this calculator leaves out
It works on the taxable lump sum. Contributions that were never deducted for tax, and some transfers between funds, can reduce that amount; your fund or SARS tax directive shows the figure. Savings-pot withdrawals under the two-pot system are taxed as income at your marginal rate, not on these tables. At retirement you can usually take at most a third of your retirement savings as cash unless the total is small; the rest buys an annuity.
Both 2026/27 lump sum tables from the Budget 2026 Tax Guide, the same figures as in our SA tax tables. Checked 18 October 2026. A general estimate, not tax advice: your fund deducts the tax shown on the SARS tax directive.
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Open calculator →Frequently asked questions
How much of my pension lump sum is tax-free?
At retirement the first R 550 000 of all your lump sums together is tax-free in 2026/27. When you resign and take a withdrawal in cash, only the first R 27 500 is tax-free.
Why does an earlier withdrawal increase the tax at retirement?
Because the tables are cumulative. A withdrawal you took years ago used up part of the tax-free amount and the lower brackets, so less is left for your retirement lump sum.
Is a provident fund lump sum taxed the same way?
Yes. Pension, provident, preservation and retirement annuity fund lump sums all use these tables.
Who deducts the tax?
The fund, using a tax directive from SARS, before it pays you.