Retrenchment Tax Calculator
Retrenchment Tax Calculator
Estimate the tax on a retrenchment or severance package using SARS’s lump-sum tax table.
How it works: A severance benefit is taxed on the same table as retirement lump sums. The first R550 000 is tax-free, but that allowance is shared across your lifetime with retirement and earlier severance lump sums. Notice pay and leave pay are taxed as normal salary, not on this table.
Frequently asked questions
Is my whole package tax-free up to R550 000?
Only the severance benefit. Leave pay, notice pay and bonuses are taxed through PAYE.
Does a previous retirement withdrawal affect this?
Yes. Earlier lump sums use up part of the R550 000.
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