Small Business Tax (SBC): Do You Qualify & What You'll Pay

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Most companies in South Africa pay income tax at a flat 27%. But qualifying small companies can be taxed under the Small Business Corporation (SBC) regime, which uses a reduced, sliding scale — starting at 0%. The savings can be significant.

The SBC tax rates

For years of assessment ending between 1 April 2025 and 31 March 2026, the SBC sliding scale is:

• R0 – R95,750: 0%
• R95,751 – R365,000: 7% of the amount above R95,750
• R365,001 – R550,000: R18,848 + 21% of the amount above R365,000
• R550,001 and above: R57,698 + 27% of the amount above R550,000

In other words, your first ~R95,750 of taxable income is tax-free, and the next band is taxed far below the standard rate — only the income above R550,000 reaches the normal 27%.

Do you qualify?

To be an SBC, your company (or close corporation) must meet all of these conditions:

• Shareholders/members are natural persons for the entire year — and hold no shares in other private companies (with limited exceptions).
• Gross income does not exceed R20 million for the year of assessment.
• Not more than 20% of total receipts and capital gains comes from investment income and income from rendering a "personal service".
• The company is not a "personal service provider" as defined.

The personal-service and investment-income rules are where many businesses trip up, so it's worth checking carefully.

Other SBC benefits

Beyond the reduced rates, SBCs may also qualify for accelerated depreciation (faster write-off) on certain assets, improving cash flow in the early years.