Income Tax for a Self-Employed Tradie

As a sole proprietor, you and your business are one taxpayer. Your net profit is added to any other income you earn and taxed at the personal rates of 18% to 45% under the Income Tax Act 58 of 1962. For the 2026/27 tax year (1 March 2026 to 28 February 2027) you pay no income tax until your taxable income passes R99,000 if you are under 65, because the primary rebate of R17,820 wipes out the tax below that line.‍‌‌‌​‌​​​​​‌​‌​‌​‌​​​​​‌​​​‌​​‌​‍

How a sole prop is taxed

There is no separate company tax step. SARS sees one person: the profit from your trade lands in your personal tax return alongside any rental income, interest or part-time salary, and the total is run through the individual tax tables.

Your taxable income works out as: gross income from the trade, minus cost of sales (materials, subbies), minus allowable business deductions under section 11 (see Tax Deductions for Tradies), minus retirement fund contributions under section 11F. Medical aid credits come off the final tax bill, not off your income (see Medical Aid Tax Credits).

The 2026/27 tax brackets

Budget 2026 (25 February 2026) adjusted the brackets for the first time since 2023/24. Per SARS's rates of tax for individuals page and the National Treasury Budget 2026 tax guide, the 2026/27 table is:

• R1 to R245,100: 18% of taxable income
• R245,101 to R383,100: R44,118 plus 26% of the amount above R245,100
• R383,101 to R530,200: R79,998 plus 31% of the amount above R383,100
• R530,201 to R695,800: R125,599 plus 36% of the amount above R530,200
• R695,801 to R887,000: R185,215 plus 39% of the amount above R695,800
• R887,001 to R1,878,600: R259,783 plus 41% of the amount above R887,000
• Above R1,878,600: R666,339 plus 45% of the amount above R1,878,600

Only the slice of income inside each band is taxed at that band's rate. Earning into a higher bracket never leaves you with less in your pocket.

Rebates and thresholds

Rebates are taken off the tax you owe, not off your income. For 2026/27, per SARS:

• Primary rebate (everyone): R17,820
• Secondary rebate (65 to 74): an extra R9,765
• Tertiary rebate (75 and over): a further R3,249

The rebate is what creates the tax threshold. A tradie under 65 with R99,000 of taxable income owes 18% of R99,000, which is R17,820, and the primary rebate cancels it exactly. The thresholds for 2026/27 are R99,000 (under 65), R153,250 (65 to 74) and R171,300 (75 and over).

Worked example: R400,000 net profit

A tradie clears R400,000 net profit in 2026/27 with no other income:

• Tax on the first R383,100: R79,998
• Plus 31% of the R16,900 above that: R5,239
• Gross tax: R85,237
• Less primary rebate: R17,820
• Tax for the year: R67,417 (an effective rate of about 16.9%)

If the same tradie pays medical aid for themselves and a spouse, the medical credit of R752 a month knocks off another R9,024 a year, bringing the bill to roughly R58,393.

A sole prop pays exactly the same rates as a salaried employee. There is no special small-business rate at personal level: the lower SBC company rates only exist inside a qualifying company (see Sole Prop vs Pty Ltd vs Turnover Tax).

How you actually pay

Nobody deducts PAYE from a sole prop, so SARS collects through the provisional tax system: two estimated payments a year on an IRP6 return, squared up when you file your annual ITR12. The mechanics, deadlines and penalties are covered in Provisional Tax Explained.

Common mistakes

• Spending the tax money. The single biggest cash-flow killer. Move a percentage of every payment into a separate account the day it lands.
• Forgetting other income. Rental, interest and side work all stack on top of trade profit and can push you into a higher bracket.
• Confusing deductions and credits. A deduction reduces income before tax is worked out; a rebate or medical credit comes off the final bill. They are not interchangeable.
• Using stale brackets. Budget 2026 moved every band. Old calculators and old spreadsheets will overstate your tax.

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