Small Businesses – Taxpayers

What’s New? 

• 10 June 2026 – Updated PAYE Employer Reconciliation BRS (2026 Release) Version 25 3 0
  • What has changed: The validation rules for source codes 3040, 3067, 3698 and 4150 were amended.
• 29 May 2026 – How to submit the EMP501 when the employee’s Income Tax number is not available

  We’ve listened and compiled a few FAQs on what to do when an employee’s Income Tax number is not available and the employee cannot be contacted.

• 14 May 2026 – Schools Exiting the VAT System Frequently Asked Questions
  
  The purpose of the Schools Exiting the VAT System Frequently Asked Questions is to give taxpayers a comprehensive overview of the changes relating to schools and translating it into clear and practical guidance following the amendments that were made to the VAT Act in the Taxation Laws Amendment Act 5 of 2026, with effect from 1 January 2026.

• 16 April 2026 – SARS Podcast series 

In the SARS Podcast series, “The VAT Chat” is here. These podcasts explore a range of VAT topics and include discussions on VAT related legislation and selected Binding General Rulings (BGRs), Interpretation Notes, Regulations and Guides which help clarify what the legislation intends and how it applies in practice.

Watch the podcasts using the links below:

• • Binding General Ruling 4
  • Binding General Ruling 74
• 24 April 2026 – The latest SMME Connect newsletter is now available.
• • Issue 14 (April 2026) of the SMME Connect newsletter is available.
• 20 March 2026 – Budget 2026 Frequently Asked Questions
  Key Small Business Corporation changes from Budget 2026: FAQs on the SBC changes
  
  
• 25 February 2026 – Turnover Tax threshold increase

The Turnover Tax threshold has increased from R1.to R2.3 million as per the Budget Speech, 2026. The tax-free threshold has been adjusted to R600 000. The effective date for the increase is 1 April 2026.

• 25 February 2026 – National Budget
  The Minister of Finance announced in the Budget Speech, 2026 an increase in the VAT registration threshold. The compulsory registration threshold is increased from R1 million to R2.3 million. The voluntary registration threshold is increased from R50 000 to R120 000. The effective date for the increase is 1 April 2026.

• 6 February 2026 – Turnover Tax (Incentive)

Taxpayers can now register for Turnover Tax on SARS Online Query System SOQS!

Apply now if your Turnover is below R1 million and you meet the following requirements

What is Turnover Tax?

Turnover Tax is a simple tax system for small businesses with a yearly turnover of R1 million or less. It replaces Income Tax, Provisional Tax, and Capital Gains Tax for businesses that qualify. The main aim is to make it easier and cheaper for small businesses to manage their tax obligations.

For more information on Turnover Tax please read the micro businesses guide and Frequently Asked Questions(FAQs).

SMME Newsletters

• For a complete list of the Connect Newsletters, click here.

About Us

This page is dedicated to Small Medium and Micro Enterprises (SMME) Taxpayers.

The SMME Taxpayers is a Division in SARS that represents the needs and interests of this sub-segment in the tax environment. This will be done through:

• Providing Clarity and Certainty to Taxpayers
• Making it easy for Taxpayers
• Detecting and deterring Taxpayers who do not comply
• Working with and through Stakeholders to improve the tax ecosystem.

The purpose of this page is to share current and upcoming work being done to achieve the above mandates. If you are a SMME Trader or Traveller, see our dedicated SMME Traders and Travellers webpage here.

See our SMME video ‘A guide on small business taxes in South Africa’ here.

How to comply as a Small Business?

Complying with your tax obligations as a small business has been made a lot easier over the past few years. Read below for more information:

• If you are starting out and need to register as a company, you will have to contact the Company and Intellectual Property Commission (CIPC), formerly called CIPRO. Please note that Companies are first required to register with the (CIPC) offices before registering with SARS for an Income Tax reference number, click here for CIPC. Once a taxpayer registered with CIPC, SARS will automatically generate an Income Tax reference number. Taxpayer must then register on eFiling to transact electronically.
• See Registering on eFiling and services available online.
• Hot to obtain your Tax Compliance Information: As a Small, Micro or Medium Enterprise (SMME), at some point or another you will be required to provide / confirm / share your Tax Clearance information with another entity. This could be to apply for a tender, new contract, good standing or in respect of Foreign Investment.  
• Registering for Turnover Tax. Turnover tax is a simplified tax system for small businesses with a qualifying turnover of not more than R1 million per annum. It is a tax based on the taxable turnover of a business and is available to sole proprietors (individuals), partnerships, close corporations, companies and co-operatives. Turnover tax takes the place of VAT (in the instance that you have not decided to elect back into the VAT system), provisional tax, income tax, capital gains tax, secondary tax on companies (STC) and dividends tax. So qualifying businesses pay a single tax instead of various other taxes. It’s elective – so you choose whether to participate. For Tax Tables see below.
• Registering your business for VAT
• Registering for PAYE, UIF and SDL
• In the case where you are already registered as a company and you meet certain qualifying requirements, you may register as a small business corporation (SBC) in order to get additional tax incentives. One of the incentives for SBCs is a reduced corporate tax rate. Click here to see reduced tax rates for small businesses.

If you have recently registered, please find our welcome pack, with useful information on the tax obligations relating to Small, Micro and Medium Enterprises (SMMEs) and a guide to small business taxes in South Africa.