A Tax-Free Savings Account lets you invest up to R46,000 a year (from 1 March 2026) and R500,000 over your lifetime, with all interest, dividends and capital gains earned inside the account completely tax-free. This calculator projects how your TFSA could grow and compares it to the same money in an ordinary taxable account. You see the interest tax, 20% dividends withholding tax and capital gains tax you would otherwise pay, and the total tax you save by going tax-free. All figures follow current SARS rules for the 2026/2027 tax year. Results are estimates for illustration, not financial advice.
Enter your contribution and assumptions. The calculator compares a tax-free TFSA with the same money in an ordinary taxable account and shows the tax you save.
How do you contribute?
Expected annual return: 9%
Years invested: 20
Asset mix (taxable-account comparison)
Interest: 30%Dividends: 20%Capital growth (the rest): 50%Used only for the annual-limit check.
Estimated tax saved by using a TFSA over 20 years
R232 554TFSA value (tax-free)
R1 704 995
Taxable-account value (after tax)
R1 472 441
Total you contribute
R500 000
Tax-free growth
R1 204 995
Interest tax avoided
R17 291
Dividends tax (20%) avoided
R46 679
Capital gains tax avoided
R130 574
From 1 March 2026 (the 2026/2027 tax year) you can contribute up to R46,000 per tax year, up from the previous R36,000 limit. The annual limit applies across all your tax-free accounts combined.
You can contribute a total of R500,000 across your lifetime, added up across every tax-free account you hold at all providers. Budget 2026 left this lifetime limit unchanged.
All interest, dividends and capital gains earned inside a TFSA are free from income tax, dividends tax and capital gains tax, and withdrawals are tax-free. Returns left to compound do not count toward your annual or lifetime limit, so growth can lawfully push your balance above R500,000.
If you contribute more than the R46,000 annual limit or the R500,000 lifetime limit, SARS levies a penalty of 40% of the excess as normal tax on your assessment. Over-contributing is expensive.
Any unused portion of your annual R46,000 limit is forfeited at the end of the tax year. It does not carry forward to the next year, so it pays to use the full allowance when you can.
You can withdraw any time, but re-investing the money is treated as a brand-new contribution that uses up both your annual and lifetime limits again. Withdrawing does not give back contribution room.
| Tax | Ordinary taxable account | TFSA |
|---|---|---|
| Interest tax | Interest above the annual exemption (R23,800 under 65, R34,500 if 65+) is taxed at your marginal rate. | None. All interest is tax-free. |
| Dividends withholding tax (DWT) | 20% withheld on local dividends at source (since 22 February 2017). | None. Dividends are tax-free. |
| Capital gains tax (CGT) | 40% of the gain above the R50,000 annual exclusion is included in income and taxed at your marginal rate. | None. Capital gains are tax-free. |
Enter your contribution
Choose monthly, annual or a once-off lump sum and enter the amount. The default is R3,000 a month. Keep your annual contribution within the R46,000 annual and R500,000 lifetime limits to avoid the 40% over-contribution penalty.
Set your return, term and tax details
Enter an expected annual return (the default is 9%), how many years you will invest, your age group, your marginal tax rate and the asset mix (how the return splits between interest, dividends and capital growth).
See your tax-free TFSA value
The calculator compounds your contributions tax-free year by year to project the final TFSA value, since interest, dividends and capital gains inside a TFSA are all exempt.
Compare to a taxable account
The same contributions are projected in an ordinary taxable account, deducting interest tax above the exemption, 20% dividends withholding tax each year, and capital gains tax (40% of the gain above the annual exclusion at your marginal rate) on realisation.
Read the tax you save
The headline figure is the difference between the tax-free TFSA value and the after-tax taxable value: the total tax you save over the term by going tax-free.
Illustrative example. Suppose you contribute R3,000 a month (R36,000 a year), earning a 9% annual return on a balanced mix (30% interest, 20% dividends, 50% capital growth), at a 31% marginal tax rate, under 65, with capital gains realised at the end. Because R500,000 is the lifetime limit, after about 14 years of R3,000 a month you reach the R500,000 lifetime cap. Contributions stop there, but your balance keeps compounding tax-free for the rest of the 20 years.
Total you contribute (capped at the R500,000 lifetime limit)
R500,000
TFSA value after 20 years (tax-free)
about R1,704,995 (all growth tax-free)
Same money in a taxable account, after tax
about R1,472,441, after yearly interest tax, 20% dividends tax and end-of-term CGT
Estimated tax saved by using a TFSA
about R232,554 (the difference between the two)
This is an estimate for illustration only, not financial or tax advice. Investment returns are not guaranteed and will vary.
It assumes a constant annual return and constant tax rules; actual SARS limits and rates may change in future Budgets.
The taxable-account comparison assumes the interest exemption (R23,800 / R34,500) is fully available against this account. If you earn other interest, your real exemption may be lower.
CGT is modelled once, on realisation at the end of the term, using the annual exclusion and 40% inclusion at your marginal rate. Spreading sales across years could reduce CGT.
Speak to a registered financial adviser before investing. TFSAs are provided by licensed financial institutions.
Figures are current for the 2026/2027 tax year (annual limit R46,000 from 1 March 2026).
SARS: Tax Free InvestmentsThe questions South Africans ask most about Tax-Free Savings Accounts.
From 1 March 2026 you can contribute up to R46,000 per tax year (up from R36,000), with a lifetime limit of R500,000 across all your tax-free accounts combined.
SARS charges a penalty of 40% of the amount contributed above the annual R46,000 limit or the R500,000 lifetime limit. It is added as normal tax on your assessment, so over-contributing is costly.
Yes. Amounts earned inside a TFSA are free from income tax, dividends tax and capital gains tax, and withdrawals are tax-free. Growth left to compound does not count toward your annual or lifetime contribution limit.
You can withdraw any time, but re-investing the money counts as a brand-new contribution against both your annual R46,000 and lifetime R500,000 limits. Withdrawals do not restore contribution room.
A taxable account pays tax on interest above the annual exemption (R23,800 under 65, R34,500 if 65+), 20% dividends withholding tax on local dividends, and capital gains tax (40% of the gain above the R50,000 annual exclusion, taxed at your marginal rate). A TFSA avoids all of these.
No. Any unused portion of your annual R46,000 limit is forfeited at the end of the tax year. It does not carry forward, so it pays to use the full allowance each year if you can.
Your bank or provider sends SARS an IT3(s) certificate for your TFSA each year, and TaxTim slots it into your ITR12 for you, question by question, with no missed deductions.