Retirement Annuity Tax Calculator (2026/27): How Much Tax an RA Saves You

By Finance Guide Editors Updated October 2026 · 5 sources · 5 min read

Prices and facts checked 15 October 2026. We don't accept payment for rankings.

Short answer: retirement annuity (RA) contributions are tax-deductible, up to 27.5% of your income, with a maximum of R430,000 a year from 1 March 2026. The deduction saves you tax at your marginal rate. Someone earning R500,000 a year who puts R36,000 into an RA saves about R11,160 in tax, so the contribution really costs about R24,840 (National Treasury Budget 2026 tax guide; SARS tax tables).

RA tax calculator

How the calculator works: it applies the deduction limit (27.5% of income, capped at R430,000) to all your retirement fund contributions combined. Then it compares your tax for 2026/27 with and without the RA, using the SARS tax table and rebates. For simplicity, it treats your income as both your remuneration and your taxable income. It's an estimate, not a SARS assessment.

The deduction rules for 2026/27

From the National Treasury Budget 2026 tax guide:

• What counts: contributions to pension, provident and retirement annuity funds. Employer contributions that are taxed as a fringe benefit count as your contributions.
• The limit: 27.5% of the greater of your remuneration or taxable income, but no more than R430,000 a year (and no more than 27.5% of taxable income before capital gains).
• One limit for all funds. Your workplace pension and your RA share the same limit (EasyEquities).
• Over the limit? The excess isn't lost. It carries forward and is treated as contributed in the following tax year.

The R430,000 cap is new

The cap went up from R350,000 to R430,000 on 1 March 2026. It was left out of the amendment act gazetted on 1 April 2026, but National Treasury and SARS confirmed the higher cap applies from 1 March. SARS has updated its systems, and the law will be corrected retrospectively (Moonstone, May 2026). The cap only matters if you earn more than about R1.56 million a year, because below that, 27.5% of your income is less than R430,000.

Worked examples (2026/27, under 65)

We calculated these with the method above. In the third row, the total contributions of R100,000 are under the R137,500 limit (27.5% of R500,000), so all of the RA is deductible. In the last row, the limit is R220,000, and R180,000 of contributions fits within it.

The rule of thumb: each R1 you put in an RA costs you R1 minus your marginal tax rate. At the 31% rate, R1,000 into an RA costs about R690.

How to claim it

1. Get your IT3(f) certificate from your RA provider. Providers send it out before filing season, and you can also download it from their website or app.
2. Check your tax return. SARS usually pre-fills RA contributions from your provider's data. Make sure the amount matches the IT3(f).
3. Pension or provident fund contributions through your employer show up on your IRP5. Don't enter them twice.
4. Missed a year? If you didn't claim and the deadline has passed, you may be able to request a correction. See our SARS filing season guide.

Many people who were auto-assessed miss their RA deduction, because it only shows up if the provider's data reached SARS. If your auto-assessment doesn't show your RA, file a corrected return.

Things to weigh up

• Access is limited. RA money is mostly locked until retirement. Since September 2024, RAs (except some older legacy policies) are part of the two-pot system, so one-third of new contributions goes into a savings pot you can access once a year, and is taxed when you withdraw it (National Treasury two-pot FAQ). See our two-pot withdrawal tax calculator.
• Tax later. The deduction is a tax deferral. You pay tax when you take retirement income, though often at a lower rate than you pay while working.
• Fees. RA fees range from low-cost index funds to expensive policies with advice and platform fees. Compare the total investment charge before you sign.
• RA vs tax-free savings. An RA gives tax relief now. A TFSA gives tax-free growth and access at any time. Many people use both. See our tax-free savings comparison.

FAQ

How much can I deduct for retirement annuity contributions in 2026/27?

Up to 27.5% of the greater of your remuneration or taxable income, with a maximum of R430,000 a year. That's across all your retirement funds combined.

How much tax does an RA save?

Your contribution multiplied by your marginal tax rate, as long as you're within the limit. At the 26% rate, R24,000 a year saves about R6,240.

What happens if I contribute more than the limit?

The excess carries forward to the next tax year and can be deducted then, or set off against tax when you retire.

Do my employer pension contributions count towards the limit?

Yes. Pension, provident and RA contributions share one limit, including employer contributions taxed as a fringe benefit.

When do I get the tax saving?

Either as a refund when you file your return, or through lower PAYE if your employer deducts RA contributions through payroll.

Is the R430,000 cap law yet?

National Treasury and SARS have confirmed it applies from 1 March 2026, even though it was left out of the amendment act. The law is due to be corrected retrospectively.

Changelog: 15 Oct 2026, first published, with the R430,000 cap that applies from 1 March 2026.