Your day rate is not your income. When you are self-employed, the rand you charge a client gets eaten by non-working days, business costs and tax long before it reaches your pocket. The honest worked example below shows how a R1,200 day rate can come down to roughly R14,000 a month in your hand, which is exactly why pricing properly matters. Treat the numbers as illustrative, because your own costs and deductions will differ.
Step 1: realistic working days
A year is not 260 paid days. Strip out the days you will not actually invoice:
- 52 weeks at 5 days each gives 260 days.
- Less public holidays, roughly 12 days.
- Less annual leave of two weeks, 10 days.
- Less a realistic allowance for sick days, bad weather and no-work days, say three weeks, 15 days.
- Realistic working days: about 223.
Step 2: gross revenue
223 days at R1,200 gives R267,600 for the year. That is the top line, not your income.
Step 3: business costs
Rough estimates, which you should adjust for your own situation:
- Vehicle (fuel, insurance, maintenance): about R36,000.
- Tools (replacements and consumables): about R8,000.
- Materials float or stock: about R6,000.
- Business insurance (public liability): about R4,800.
- Accounting and bookkeeping: about R6,000.
- Phone and data: about R3,600.
- Total estimated costs: about R64,400.
Step 4: taxable income
R267,600 less R64,400 leaves about R203,200 of taxable income.
Step 5: tax, on the 2026/27 tables
The tax threshold for an individual under 65 is R99,000, so there is no tax below that. On the 2026/27 rates the first bracket is 18 percent up to R245,100, and there is a primary rebate of R17,820. Worked roughly, 18 percent of R203,200 is about R36,576, less the R17,820 rebate, which lands tax in the region of R18,000 to R19,000 for the year. This is illustrative only. Use the SARS eFiling tax calculator or a registered tax practitioner for the figure that actually applies to you.
Step 6: what is actually left
Take about R203,200 less roughly R18,500 of tax and you are left with around R184,000 net for the year, or close to R15,000 a month. Out of that you still need to fund retirement, a slow-season buffer and lean months. Starting from a R1,200 day rate, a real monthly take-home near R14,000 to R15,000 is the honest picture. Price too low and that number gets ugly fast.
Common mistakes
- Treating the day rate as take-home pay. It is not. Non-working days, costs and tax take a large slice before you do.
- Forgetting the non-working days. Pricing as if you bill 260 days a year overstates your income by a fifth or more.
- Ignoring provisional tax until it is due. Set the tax aside monthly so the August and February payments do not blindside you.
- Pricing to win work rather than to survive. A busy tradie going broke is worse off than a quieter one who is profitable.
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