Should you withdraw early from your retirement savings rather than take a lump sum benefit on retirement, different tax rates apply. Please see below the relevant tax tables relating to early withdrawal (Table 1) and retirement lump sum benefits (Table 2).
Table 1: Retirement Savings Withdrawal Benefit
Retirement savings withdrawal benefits consist of lump sums from a pension, pension preservation, provident, provident preservation or retirement annuity fund (including assignment in terms of a divorce order).
| Taxable income (R) | Rate of tax (R) |
| 1- 25 000 | 0% of taxable income |
| 25 001 - 660 000 | 18% of taxable income above 25 000 |
| 660 001 - 990 000 | 114 300 + 27% of taxable income above 660 000 |
| 990 001 and above | 203 400 + 36% of taxable income above 990 000 |
Table 2: Retirement Lump Sum Benefits 2022 tax year (1 March 2021 – 28 February 2022)
| Taxable income (R) | Rate of tax (R) |
| 1- 500 000 | 0% of taxable income |
| 500 001 – 700 000 | 18% of taxable income above 500 000 |
| 700 001 – 1 050 000 | 36 000 + 27% of taxable income above 700 000 |
| 1 050 001 and above | 130 500 + 36% of taxable income above 1 050 000 |
Note that tax relief on retirement lump sum benefits is allocated once in a lifetime. In other words, once it is used up you can’t claim it again.