One Percent of South Africa’s Population Pays 60% of Personal Income Tax

About one percent of South Africa’s population pays nearly 60% of South Africa’s personal income tax.

This is according to the latest tax statistics released by the South African Revenue Service (SARS), which covers information up until 2024.

According to the taxman, there were 762 551 South Africans who earned more than R750 000 a year in 2024. Together these South Africans paid 56.7% of all personal income tax.

In total they paid R363 billion to the fiscus in 2024.

Stats SA figures from 2024 estimated that there were 63 million people in South Africa. This means that 1.2% of South Africa’s population pays nearly six in every ten rand in personal income tax that is collected by SARS.

Put another way, in 2024 there were about 17 million employed South Africans. About 4.5% of South Africa’s employed population paid nearly 60% of all personal income tax.

These are also the same people who run companies and business and are therefore responsible for most of the corporate tax in South Africa. In addition, they make much of the economic activity that results in the payment of VAT possible.

While personal income tax is not the only form of revenue that SARS collects, it accounts for roughly 40% of the total tax take, a significant proportion.

At the same time nearly half of all South Africans receive some form of social grant. According to latest figures, about 28 million people receive some form of income from the government. About nine million people receive the Social Relief from Distress (SRD) grant, with about four million people receiving the old age grant and 13 million receiving the childcare grant. Other grants include disability and foster care grants, among others.

Grants in and of themselves aren’t a problem. They support vulnerable households living in poverty and inject cash into local economies. They are a vital form of social assistance in an economy such as ours with high numbers of unemployed people.

However, a system in which around one percent of the population funds the majority of personal income tax while roughly half the country receives government transfers cannot endure indefinitely.

A primary focus of any South African government must be getting people into work. Apart from the financial benefits to the government, which would see more tax paid to the fiscus, fewer people relying on social grants, and more money going into the economy as a result of more people being employed and having money to spend, there are also important intangible benefits to working. Being employed provides a sense of dignity and accomplishment. It can also lead to more opportunities for advancement and better-paying jobs if one is already in work.

But if the government really wants to spread the tax burden more it must create an environment where more profit-making enterprises are created, sustained, and allowed to expand. Jobs do not emerge from government decree. They are created when businesses invest capital, take risks, and generate returns. Without profitable firms there are no sustainable wages, no expanding tax base, and no long-term fiscal stability.

A policy priority for South Africa must be to make it easier, safer, and more attractive to start and grow businesses. That means regulatory certainty, secure property rights, reliable electricity and water supply, and a tax and labour framework that rewards expansion rather than punishing success. Investors, both local and international, commit capital where the rules are clear and the prospect of return outweighs the risk.

If profit-making enterprises multiply, employment will follow. As more South Africans enter the workforce, the tax base broadens naturally, not only from more people paying tax, but also from the additional tax that will come from the increase in the number of firms that make profits, and the burden currently carried by a narrow slice of taxpayers will ease.