Does South Africa use progressive tax brackets?

Yes, South Africa uses a progressive income tax system, meaning the more you earn, the higher percentage of your income goes to taxes. The top marginal rate is indeed 45.0% for income above R1,731,600. For example, if you earn R300,000 annually, your first R237,100 is taxed at 18%, and the remaining R62,900 is taxed at 26%. This puts your effective (average) tax rate much lower than the top bracket rate, as only portions of your income are taxed at higher rates. For R300,000, your effective rate would be around 20.4%. Understanding these brackets is key. Even if your income pushes you into a higher bracket, only the portion of your income within that bracket is taxed at the higher rate. This means your effective tax rate is always less than your top marginal rate. If you're considering relocating, understanding these progressive rates is vital for budgeting. Don't just look at the highest rate; calculate your actual effective rate based on your expected income.