Paying tax is unavoidable, but paying more tax than you should is something you can avoid with the right planning. Knowing which deductions and credits you qualify for can make a huge difference to your take-home income and long-term wealth.
Tax experts say that tax efficiency should be a key part of your overall financial plan. The goal isn’t to “beat the system,” but to understand how the system rewards smart financial habits — saving, investing, donating and planning for your future.
Below, we unpack five practical ways to lower your tax bill and keep more of your hard-earned money.
Tax-Free Savings Accounts (TFSA): Grow Your Money Without Paying Tax
A Tax-Free Savings Account lets you earn interest, dividends and capital gains without paying tax on the growth.
- Annual limit: R36 000
- Lifetime limit: R500 000
If you invest the maximum each year, it’ll take about 14 years to reach the lifetime limit — and every cent of growth stays yours. This makes TFSAs ideal for long-term goals like education, a home deposit or even retirement top-ups.
Pro tip: You can open more than one TFSA, but SARS looks at your combined contributions. Going over R36 000 in a tax year will trigger a 40 % penalty on the excess — so track your total contributions carefully.
2. Retirement Contributions: Save for Tomorrow and Pay Less Today
One of the most effective ways to save tax is by contributing to a retirement fund.
- You can deduct up to 27.5 % of your taxable income (capped at R350 000 a year).
- These deductions lower your taxable income immediately, reducing what you owe SARS.
Even if you already contribute to a company pension fund, you can top up with a Retirement Annuity (RA) to reach the full deduction limit. Think of it as getting a tax refund for investing in your own future.
Pro tip: Review your retirement contributions at the start of each year — a small increase could reduce your tax bill while boosting your retirement savings.
3. Medical Aid Tax Credits: Turn Healthcare Costs Into Savings
Healthcare is expensive, but some of those costs can lighten your tax load.
- You’ll receive a monthly tax credit based on the number of dependants on your medical aid.
- You can also claim out-of-pocket medical expenses (such as doctor visits or prescribed medication) that weren’t reimbursed.
💡 Pro tip: Always submit every expense to your medical aid, even if you know they won’t cover it. These unreimbursed totals appear on your medical aid tax certificate — helping you claim a bigger credit.
Remember, only doctor-prescribed medicine qualifies; over-the-counter purchases don’t count.
4. Home Office Deductions: Make Remote Work Work for You
If you work from home, SARS may allow you to deduct a portion of certain household expenses — but there are rules.
To qualify, you must:
- Work from home at least 50 % of your work week, and
- Have a dedicated workspace used exclusively for your job.
Eligible expenses include part of your rent or bond interest, electricity, internet and office equipment depreciation (wear and tear).
Pro tip: Keep detailed records and photographs of your workspace, plus a letter from your employer confirming your remote-work arrangement. Only claim the business portion — not your whole rent or utility bill.
5. Charitable Donations: Give Back and Get Back
South Africa’s tax system rewards generosity. Donations to registered Public Benefit Organisations (PBOs) are tax-deductible — up to 10 % of your taxable income.
To claim, you’ll need a Section 18A certificate from the organisation. Keep these certificates safely; SARS won’t accept claims without them.
Pro tip: Supporting causes you care about doesn’t just change lives — it can also trim your tax bill. Plan your giving like you plan your investing.
The Bigger Picture: Tax Planning Is Year-Round
Smart tax management isn’t a once-a-year rush before filing season. It’s an ongoing part of financial wellness — aligning how you save, spend, invest and give.
Here’s how to stay ahead:
- Review your finances mid-year to spot missed opportunities.
- Keep receipts and digital records of deductible expenses.
- Get advice from a certified tax professional if your situation is complex.
When you understand how to use legal tax breaks, you’re not just saving on tax — you’re building a stronger, more efficient financial future.
Bottom line
Every rand saved on tax is a rand that can work harder for you — growing your investments, securing your retirement, or supporting the causes you believe in.
Being tax-smart isn’t about loopholes; it’s about using knowledge to your advantage.


