Year-end tax checklist for South African small businesses: what to do before 28 February
The South African tax year for individuals runs from 1 March to the end of February, so the next year end is 28 February 2027. The work that saves tax and avoids penalties is done in the months before it, not in March.
In short
- The tax year for individuals ends on 28 February 2027, and companies follow their own financial year end.
- Contributions to a retirement fund are deductible up to 27.5% of the greater of remuneration or taxable income, capped at R430,000 a year from 2026/27.
- The tax-free savings account limit is R46,000 a year, with a R500,000 lifetime limit. Excess contributions are taxed at 40%.
- Interim payroll reconciliations are due by 31 October and annual ones by 31 May, so clean up your payroll records now.
- Do not leave stock counts, debtor reviews and asset checks until after year end.
Why do this now
Most of what reduces your tax bill has to happen before year end: a retirement contribution, a purchase of equipment, a written-off bad debt. After 28 February you can only report what already happened. The checklist below is ordered by month so the work is spread out.
October and November
- Payroll interim reconciliation. The interim EMP501, covering March to August, is due by 31 October. Reconcile your monthly declarations to your payroll records first.
- Confirm employee tax numbers. SARS now rejects an annual reconciliation if an employee who must be registered has no valid income tax reference number. Fix gaps early. See our payroll guide.
- Review your provisional tax position. The voluntary top-up for the last tax year falls due on 30 September, so check it if you have not already. Your second payment for this year falls on 28 February, so compare year-to-date profit with your first estimate.
- Check your VAT position against the current thresholds. Our VAT guide explains the R2.3 million line.
December and January
- Update your fixed asset register. Add purchases, remove disposals, and check that assets still exist. Equipment bought and brought into use before year end can qualify for allowances in this year.
- Review debtors. List customers who owe you, decide which are unlikely to pay, and get advice on writing off bad debts and any VAT consequences. Follow up on the oldest first.
- Review creditors and accruals. Make sure you have recorded every supplier invoice for work done before year end.
- Check director and owner loan accounts, so you know what the business owes you and what you owe it.
- Vehicle logbooks. SARS requires a logbook for business travel. Complete it now while you can still remember trips.
February
- Retirement contributions. Contributions to pension, provident and retirement annuity funds are deductible at 27.5% of the greater of remuneration or taxable income, up to R430,000 a year for 2026/27. Unused amounts carry forward to the next year. Check the timing of contributions with your fund.
- Tax-free savings account. The limit is R46,000 a year from 1 March 2026, and R500,000 for life. SARS charges 40% on excess contributions.
- Stock count. Count physical stock on or very near year end and compare it with your books. Write down obsolete stock.
- Bank and control accounts. Reconcile the bank, VAT, PAYE and debtors and creditors control accounts to the last day of the year.
- Provisional tax. Make the second payment by 28 February with a realistic estimate. Underestimating by more than 20% brings a penalty. See our provisional tax guide.
- Employee tax certificates. Prepare to issue IRP5 certificates within 60 days of year end.
After year end
Prepare the financial statements and tax return, submit the annual payroll reconciliation by 31 May, and keep your records for five years.
What to do now
- Put the fifteen items above in your diary against real dates.
- Ask your bookkeeper for a year-to-date profit figure now, so you know your tax position while you can still act.
- Decide whether a retirement contribution makes sense this year, based on the cap and your cash.
- Book stock count day for the last working day in February.
- Book a pre-year-end review with us in January.
Frequently asked questions
When does my company's tax year end?
On its financial year end, which is set when the company is registered and can be any month. Diarise your own dates.
Can I claim an asset I bought in the last week of February?
Only if it was brought into use in the tax year. Ask us before you buy at the last minute, because the allowance depends on the asset and the timing.
What if I miss the retirement contribution?
Contributions generally need to be made within the tax year to count for it, so you may lose that year's deduction. Unused amounts from earlier years carry forward.
Sources and further reading
This article is general information for South African businesses. It is not tax, legal or financial advice, and it reflects the rules and figures at the date shown above. Tax rules change, so confirm the current position before you act. TBL's practitioners are registered tax practitioners.