Two-pot withdrawal tax

The fast answer: a savings-pot withdrawal is not taxed on the retirement lump-sum tables. It is added to your taxable income for the year and taxed at your marginal rate, from 18% to 45%, through a SARS directive. Enter your annual income and the amount you want to take from the savings component, and the calculator below works the tax the way SARS does: it adds the withdrawal on top of your income, finds the tax on the higher total, and the extra tax is what comes off your payout. No tax-free portion, no deduction and no exemption is applied to the withdrawal itself, so the rate you pay is set entirely by where the money lands once it sits on top of your income.

Open the two-pot withdrawal calculator →

How the two pots work

Since 1 September 2024, contributions to a retirement fund are split. One-third goes to the savings component, which you can access before retirement. Two-thirds goes to the retirement component, which stays locked to provide a pension or annuity at retirement. Anything saved before 1 September 2024 sits in a third bucket, the vested component, under the old rules.

You can take from the savings component once per tax year, a minimum of R2,000 up to whatever is available. That is the withdrawal this calculator prices. A retirement lump sum, by contrast, is taxed on the separate retirement tables, which give a large tax-free slice this withdrawal does not get.

Why it is not on the lump-sum tables

The retirement and withdrawal lump-sum tables carry tax-free bands: the first R550,000 of a retirement or severance lump sum is tax-free, and the first R27,500 of a resignation or withdrawal lump sum is tax-free. A savings-component withdrawal under the two-pot system uses none of that. SARS treats it as ordinary income for the year: the fund requests a directive, SARS adds the withdrawal to your other taxable income, works out the tax on the higher total, and the difference is the tax deducted before you are paid. Because no rebate slice, exemption or tax-free amount is applied to the withdrawal, its cost is purely the marginal-rate tax on the top rand.

Worked example (show the workings)

Take someone under 65 with taxable income of R360,000 for the 2026 year of assessment, who withdraws R30,000 from the savings component. The tax on the withdrawal is the tax on R390,000 less the tax on R360,000, both on the SARS rate tables for the 2026 year of assessment.

• Tax on R360,000, less the primary rebate: R57,397.
• Tax on R390,000, less the primary rebate: R66,172.
• Tax on the withdrawal: R66,172 less R57,397 = R8,775.
• Net payout: R30,000 less R8,775 = R21,225, before any fund administration fee.

The effective rate on the withdrawal is R8,775 / R30,000, about 29.25%, because the money straddles the 26% and 31% bands. Someone whose income already sat in the top band would instead lose 45% of the same R30,000, which is R13,500. That is the kind of figure worth seeing calculated before you request the payout, rather than discovering when a smaller amount lands in your account.