General information, not financial advice. Not a financial services provider and not SARS. Figures follow SARS's 2026/27 tables and National Treasury rules; we never recommend products.

Retirement lump sum tax calculator 2026/27

SARS taxes lump sums from pension, provident, preservation and retirement annuity funds on separate tables. At retirement the first R550 000 is tax-free, but earlier lump sums count against it. Estimate the tax before you choose how much to take in cash.

Your details

Why are you receiving the lump sum?

The cash lump sum from the fund (or the severance benefit from your employer). Not salary, leave pay or notice pay.

For example a pension you cashed in when you changed jobs. Leave out two-pot savings withdrawals: they are taxed as income.

Retirement lump sums since 1 October 2007 and severance benefits since 1 March 2011.

Lump sum after tax (estimate)

R752 300.00

6% average tax rate on this lump sum

Tax SARS will direct the fund to deduct
R47 700.00

How we worked it out

  1. This lump sumR800 000.00
  2. Earlier lump sums and severance benefitsR0.00
  3. Total (aggregate)R800 000.00
  4. Tax on total using the retirement / severance benefit tableR47 700.00
  5. Less tax on earlier amounts (same table)R0.00
  6. Tax on this lump sumR47 700.00
  7. Amount after taxR752 300.00
  • On retirement, a fund value of R360 000 or less may be taken in full as cash (from 1 March 2026). Above that, most of it must buy an annuity; your fund confirms how much you may take in cash.
General information, not financial advice. KayaRetire gives general information and estimates based on SARS tax tables and guides, National Treasury publications and Minister of Finance notices. It is not financial, tax or investment advice as defined in the Financial Advisory and Intermediary Services (FAIS) Act, it does not recommend any product, fund or provider, and KayaRetire is not an authorised financial services provider. Your fund or insurer and SARS work out the actual amounts. Before you make a decision, speak to your fund, SARS or an authorised financial adviser. The fund deducts the tax that SARS sets in a tax directive. This estimate assumes the amounts you entered are correct and complete.

The SARS tables for 2026/27

Retirement fund lump sum benefits or severance benefits (2026/27)
Taxable lump sum (aggregated)Tax
R1 – R550 0000%
R550 001 – R770 00018% of the amount above R550 000
R770 001 – R1 155 000R39 600 + 27% of the amount above R770 000
R1 155 001 and aboveR143 550 + 36% of the amount above R1 155 000
Retirement fund lump sum withdrawal benefits (2026/27)
Taxable lump sum (aggregated)Tax
R1 – R27 5000%
R27 501 – R726 00018% of the amount above R27 500
R726 001 – R1 089 000R125 730 + 27% of the amount above R726 000
R1 089 001 and aboveR223 740 + 36% of the amount above R1 089 000

How earlier lump sums are added in

SARS works out the tax on the total of this lump sum and all earlier ones (withdrawal benefits since 1 March 2009, retirement lump sums since 1 October 2007 and severance benefits since 1 March 2011), then subtracts the tax on the earlier ones using the same table. That is why the tax-free part is only available once. Read the lump sum tax tables explained.

What happens to the rest

Money you do not take in cash buys an annuity, which is taxed as income when it is paid. See the living annuity calculator.

For salary, bonus and other tax calculators, see RandRight's lump sum tax calculator and the rest of our sister site.

Frequently asked questions

How much of a retirement lump sum is tax-free in 2026/27?

The first R550 000 on the retirement and severance table, unchanged since the 2024 tax year. It is a lifetime amount: earlier retirement, withdrawal and severance lump sums are added in and use it up.

What is the tax on a R1 000 000 retirement lump sum?

R101 700 if you have had no earlier lump sums: nothing on the first R550 000, 18% from R550 000 to R770 000 (R39 600), and 27% on the rest.

Which table applies when I resign?

The withdrawal table, which has only R27 500 tax-free and then 18%, 27% and 36%. For example, R300 000 withdrawn on resignation costs about R49 050 in tax, and it also reduces the tax-free amount left for your retirement.

Is a retrenchment package taxed on the retirement table?

Yes. A severance benefit (a lump sum from or arranged by your employer because your job ended, for example retrenchment) and a lump sum from the fund on retrenchment use the retirement and severance table, with the same aggregation.

Can I take my whole retirement fund as cash?

Only if the amount is R360 000 or less (from 1 March 2026), or for the savings component and certain older vested amounts. Otherwise part of it must buy an annuity. Your fund tells you how much of your own benefit can be paid in cash.

Is a two-pot savings withdrawal taxed on these tables?

No. Savings withdrawal benefits are taxed at your marginal income tax rate. Use the two-pot withdrawal tax calculator for those.

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