Two-pot system tax calculator
Are you feeling overwhelmed trying to calculate the tax on withdrawals from the two-pot system? Don’t worry—we’re here to guide you through it and help you find a tool that makes calculating your tax easy.
Withdrawals from the savings pot are taxed at your marginal rate, which is often higher than the tax rate applied to early retirement fund withdrawals.
Example: Mr. X’s Withdrawal
Let’s look at an example. Suppose Mr. B resigns and decides to withdraw his total retirement fund credit of R50,000. Under the current system, Mr. B would pay 18% tax, amounting to R4,050 (since the first R27,500 is tax-free, and the balance is taxed at 18%).
Under the new two-pot system, if Mr. B, with an annual salary of R300,000, withdraws R50,000 from his savings pot, he will incur 26% tax—amounting to R13,000. This significant difference is because the R50,000 withdrawal gets added to his taxable salary, raising his marginal tax rate to 26%.
Where can you get the tax calculator?
Log into your filing and click on the Two-pot Calculator. You can also get the calculator directly on the SARS website(click to view tool).
On the next window, you will be asked to enter your details:
- Tax number
- Name and surname
- How much you earn per annum
- How much you plan to withdraw
- Enter these details and click next
The next window will ask you how you would like to receive OTP. Choose the appropriate method for yourself, and ensure that your email and tax number are correct. 
Once you receive your OTP, your tax result will be displayed as below:
You can recalculate the result by repeating the process.
Considerations: Why you should not withdraw from the two-pot system
Should I withdraw from the two-pot system, you might ask.
We think you might want to consider not withdrawing from the two-pot system:
Here’s why: If you withdraw now, you’ll be subject to tax at marginal rates. Additionally, if you’re unable to replace those retirement savings, you could face challenges and potentially fall short of funds when you retire.
As an alternative, consider using your discretionary savings or emergency funds first. Withdrawal from the two-pot system should ideally be a last resort.
If you have any questions or need assistance, please feel free to reach out. We’re here to help make this process as smooth as possible for you.