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Question which relates to tax deductions on pensions

Posted 11 January 2016 under Tax Q&A


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Brad says:
11 January 2016 at 8:41

Please understand, that I know very little about tax !! Infact, I leave it to the experts. Your wesbite is very informative, allow me to thank you. However, I need to clarify the tax deductable when a person withdraws their pension fund before retirement. Its very straightforward on you webpage, however, it does not make provision for the tax % a citizen will pay / should pay, it assumes that we all pay the same % tax. So if a layman has R100k in their pension fund, and so does the CEO of a big company, surely the %'s are not the same?

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TaxTim TaxTim says:
11 January 2016 at 12:28

The lumpsum is not added to your other income - it is taxed entirely separately using special tax tables.
Therefore it doesn't matter how much you earn or what % tax you pay on your other income (eg. salary). This has nothing to do with the way the tax on the lumpsum is calculated.

Please use our Lump sum calculator to work out tax on withdrawal prior to retirement.


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