Taxation

It is important that you as a member understand the different tax implications when benefits are paid.

For more information on your benefits, click on the links below. Alternatively, scroll down to see what tax will be payable when you leave the Fund.

Retirement benefits

The first R550 000 payable at retirement or retrenchment from a pension, provident or retirement annuity fund is tax free.

The balance is taxed according to the following fixed scale:

R0 – R550 000	0%
R550 001 – R770 000	18% of the amount above R550 000
R770 001 – R1 155 000	R39 600 plus 27% of the amount above R770 000
R1 155 001 and above	R143 550 plus 36% of the amount above R1 155 000

This amount applies to the aggregate of all retirement lump sums received over the retiree's lifetime. This means that you cannot get R550 000 from the National Tertiary Retirement Fund and R550 000 from a Living Annuity. Your Accumulated Credit will be added together and the first R550 000 will then be tax free. The balance will be taxed according to the scale above.

Any withdrawal benefit previously received tax free, as well as tax free portions for amounts paid out in respect of divorces or maintenance orders, after 1 March 2009, will also be deducted off the Tax free amount.

The tax free amount transferred from the AIPF and TEPF is over and above the limits set out above.

Death benefits

The first R550 000 payable at death from a pension, provident or retirement annuity fund is tax free.

The balance is taxed according to the following fixed scale:

R0 – R550 000	0%
R550 001 – R770 000	18% of the amount above R550 000
R770 001 – R1 155 000	R39 600 plus 27% of the amount above R770 000
R1 155 001 and above	R143 550 plus 36% of the amount above R1 155 000

This amount applies to the aggregate of all retirement lump sums received over the retiree's lifetime. This means that your dependants cannot get R550 000 tax free from the National Tertiary Retirement Fund and R550 000 from another fund. Your Accumulated Credit of both Funds will be added together and the first R550 000 will then be tax free. The balance will be taxed according to the scale above.

It is advised that beneficiaries who are awarded money must consider to not take the money in cash and should consult with a financial advisor in this regard.

Taxation on Resignation or Dismissal

A benefit payable from your Savings Pot on resignation or dismissal is taxed at your marginal rate.

A benefit payable from your Vested Pot is taxed according to the following fixed scale:

R0 – R27 500	0%
R27 501 – R726 000	18% of the amount above R27 500
R726 001 – R1 089 000	R125 730 plus 27% of the amount above R726 000
R1 089 001 and above	R223 740 plus 36% of the amount above R1 089 000

This applies to the aggregate of resignation or dismissal lump sums received over the member’s lifetime after 1 March 2009, as well as tax-free portions for amounts paid out after 1 March 2009 in respect of divorces or maintenance orders, which will reduce the tax-free portion available . This means that you cannot get R27 500 from this Fund and R27 500 from the next fund you join. Both benefits will be added together and only the first R27 500 will be tax-free. The balance will be taxed according to the above scale.

Any tax-free amounts paid to you will be deducted from your tax-free amount at retirement.

Taxation on Retrenchment

A lump sum benefit payable on retrenchment from your Savings Pot is taxed at your marginal rate.

A lump sum benefit payable on retrenchment from your Vested Pot is taxed according to the following fixed scale:

R0 – R550 000	0%
R550 001 – R770 000	18% of the amount above R550 000
R770 001 – R1 155 000	R39 600 plus 27% of the amount above R770 000
R1 155 001 and above	R143 550 plus 36% of the amount above R1 155 000

Any withdrawal or retrenchment benefit previously received tax-free (including any tax-free amount received from your Employer as a severance package), as well as tax-free portions for amounts paid out after 1 March 2009 in respect of divorces or maintenance orders, will reduce the tax-free portion available.

Any tax-free amounts paid to you will be deducted from your tax-free amount at retirement.