Section 18A: the tax deduction for donations to approved organisations

A donation in cash or kind to a section 18A-approved organisation is deductible from your taxable income, up to 10% of that taxable income, provided you hold a valid section 18A receipt. Anything above the 10% cap is not lost: it carries forward and is treated as a donation made in the next year of assessment. This is a deduction that reduces the income you are taxed on, and it is separate from donations tax.

How the section 18A deduction works

You give to a public benefit organisation (PBO) that SARS has approved to issue section 18A receipts. At assessment, the deductible amount is limited to 10% of your taxable income for that year. The 10% base includes any taxable capital gain, because that gain forms part of taxable income.

Two points decide whether the claim holds:

• The donation must be bona fide, in cash or in kind, to an organisation that holds section 18A approval.
• You must have a valid section 18A receipt for it. Without that receipt, the deduction is not available, no matter how genuine the gift.

A general PBO donation receipt is not the same as a section 18A receipt. Only an organisation specifically approved under section 18A can issue one, and the receipt must contain the details SARS prescribes. Keep it with your records; SARS can ask for it.

The 10% cap and the carry-forward

If your donations for the year exceed 10% of taxable income, the excess does not disappear. It is carried forward and treated as a donation made in the next year of assessment, where it again competes for room under that year's 10% cap. So a large gift in one year can produce deductions across more than one year.

Section 18A deduction versus donations tax

These are two different things, and confusing them is common.

The section 18A deduction is an income-tax benefit for giving to an approved PBO. It lowers your taxable income within the 10% limit.

Donations tax is a separate tax that a donor pays on gifts. It is its own charge, with its own rules, and it is not what section 18A is about. If you are trying to understand the tax on giving to family or other private recipients, read how donations tax works in South Africa. For how gifts and bequests interact at death, the article on whether inheritance is taxed in South Africa covers the related ground.

The short version: section 18A is about a deduction you claim for approved giving; donations tax is a charge you may owe on giving generally.

A worked example

Take a taxpayer with taxable income of R600,000 for the 2026 year of assessment. During the year they donate R80,000 to a section 18A-approved PBO and hold a valid receipt.

First, the cap on what is deductible this year:

10% x R600,000 = R60,000

So R60,000 is deductible now. The remaining R20,000 (R80,000 minus R60,000) carries forward to the next year of assessment and is treated as a donation made then.

Now compare the tax before and after the deduction, using the 2026 individual tax table and the primary rebate of R17,235.

Tax on R600,000:

R121,475 + 36% x (R600,000 - R512,800) R121,475 + 36% x R87,200 R121,475 + R31,392 = R152,867 less rebate R17,235 = R135,632

Tax on R540,000 (taxable income after the R60,000 deduction):

R121,475 + 36% x (R540,000 - R512,800) R121,475 + 36% x R27,200 R121,475 + R9,792 = R131,267 less rebate R17,235 = R114,032

Tax saving this year:

R135,632 - R114,032 = R21,600

That is the same as R60,000 x 36%, the taxpayer's marginal rate. The deduction saves tax at the rate on the top slice of income, not at the full average rate. The R20,000 still in hand can produce a further deduction next year, subject to that year's 10% cap.

You can see how a deduction changes your assessment using the basic income tax calculator, and the mechanics of brackets and rebates carry across to other deductions too, such as the retirement annuity deduction under section 11F.