Provisional tax in South Africa: a practitioner’s guide to the dates and the traps

Provisional tax is the way SARS collects income tax in advance from people and companies who earn income that isn’t fully taxed through PAYE — paid in two compulsory instalments a year, with an optional third top-up. It is not a separate tax; it is your normal income tax, estimated and paid early so you are not hit with one large bill at assessment.

For a tax practitioner, provisional tax is one of the highest-stakes parts of the calendar. The dates are fixed, the estimates carry penalty risk, and the work clusters into two intense windows that fall on the same days for every client at once.

The two compulsory dates

For a taxpayer on the standard February year-end, the two compulsory provisional payments fall on fixed dates each year:

• First period (P1): due by 31 August — half-way through the year of assessment, based on an estimate of total taxable income.
• Second period (P2): due by 28 February (or 29 in a leap year) — the last day of the year of assessment, based on a fuller estimate.
• Optional third period (P3): a voluntary top-up by the end of September that follows, to settle any shortfall before interest builds.

Each payment is declared on an IRP6 return. Clients with a non-February year-end have the same structure on a shifted calendar — which is exactly why a single firm-wide reminder fails.

The penalty traps

Most provisional tax pain comes not from missing the date but from the estimate. Two penalties catch practitioners most often:

1. 1The under-estimation penalty. If the second-period estimate is too low against actual taxable income, SARS can levy a penalty of up to 20% of the shortfall. The rules tighten for higher earners, where the estimate must be close to a set percentage of the final figure.
2. 2The late-payment penalty. Pay a provisional amount late and SARS adds a percentage penalty plus interest — even if the estimate itself was sound.

How practitioners stay ahead of both windows

Because every client’s provisional dates derive from their year-end, the reliable method is to let the dates compute from each client’s cadence rather than tracking them by hand. Then the two windows stop being a surprise: you can see the full P1 and P2 cohort weeks out and start the estimates with room to think.

A short pre-deadline checklist

• Confirm each client’s year-end and provisional dates well before the window opens.
• Pull the latest management figures early — the estimate is only as good as the data behind it.
• Stress-test the P2 estimate against the under-estimation thresholds for higher earners.
• File and pay before the date, then keep the IRP6 and proof of payment on the client record.