New Tax Refund System – Starting June 2025, the South African Revenue Service (SARS) will implement a new tax refund system that aims to simplify the refund process, speed up disbursements, and make returns more accurate based on income levels. This change is part of a broader digital transformation to modernize the country’s tax structure, reduce refund delays, and ensure better compliance. Under the revamped system, millions of taxpayers across various income brackets can expect a more personalized and timely refund, provided their income tax filings and bank details are up to date. The automation of income-based refund calculations will help ensure refunds are processed based on actual tax contributions and applicable deductions, including for medical expenses, retirement annuities, and employment-based tax credits. This update is expected to benefit low and middle-income taxpayers the most, many of whom were previously subjected to longer waiting periods or partial refunds due to system inefficiencies. SARS has confirmed that the system will launch on June 3, 2025, and eligible taxpayers will begin seeing returns by June 15, 2025, depending on their assessment category. Let’s break down who qualifies, how much you could receive based on your earnings, and how to ensure you get your refund without delays.
Overview of the New Tax Refund System
The revamped refund system introduces automated calculation models and income-based segmentation. Here’s what you need to know:
- Refunds now automatically calculated based on verified annual income.
- Deductions like medical aid, RA contributions, and travel claims will be factored in automatically.
- Eligible refunds will be disbursed directly to the taxpayer’s verified bank account.
- Refunds expected to be completed within 10–15 working days after filing.
- New digital portal integrated with eFiling for easier tracking.
- Increased transparency with downloadable refund breakdown statements.
- Real-time status updates through SARS Mobile App and eFiling login.
- Refund notifications sent via SMS and registered email.
New Tax Refund System – Income Brackets and Estimated Refund Amounts
This system categorizes refunds based on income brackets. The below table provides an estimate of the potential tax refunds one can expect.
| Annual Income (ZAR) | Estimated Refund (ZAR) | Refund Processing Time | Audit Requirement | Medical Aid Auto-Credit | Employment Tax Incentive (ETI) | Needs Bank Verification? | Filing Deadline |
|---|---|---|---|---|---|---|---|
| 0 – 90,000 | 1,200 – 2,500 | 10 days | No | Yes | Yes | Yes | 31 July 2025 |
| 90,001 – 180,000 | 2,500 – 4,800 | 10 days | No | Yes | Yes | Yes | 31 July 2025 |
| 180,001 – 300,000 | 3,500 – 7,500 | 12 days | Possible | Yes | Yes | Yes | 31 July 2025 |
| 300,001 – 500,000 | 4,000 – 8,500 | 12–15 days | Possible | Yes | No | Yes | 31 July 2025 |
| 500,001 – 750,000 | 3,000 – 7,000 | 15 days | Likely | Partial | No | Yes | 31 July 2025 |
| 750,001 – 1,000,000 | 2,000 – 4,000 | 15 days | Yes | Partial | No | Yes | 31 July 2025 |
| 1M+ | Case-by-case | 15+ days | Yes | Partial | No | Yes | 31 July 2025 |
New Tax Refund System – How the Refunds Are Calculated
Refunds are calculated based on actual tax paid, eligible deductions, and the taxpayer’s income band.
Key Components in Calculation
The following factors influence how much refund you are eligible for:
- Total tax paid throughout the year
- Medical aid contributions (both yours and employer’s)
- Retirement annuity and pension fund contributions
- Travel allowance and work-from-home deductions
- Education or skill development credits
| Deduction Type | Average Benefit Range (ZAR) | Applied Automatically? | Needs Receipts? |
|---|---|---|---|
| Medical Aid (Main Member) | 3,600 – 10,800 | Yes | No |
| RA Contributions | Up to 27.5% of income | Yes | No |
| Home Office Deduction | 1,000 – 2,500 | No | Yes |
| Travel Logbook Claim | 2,000 – 8,000 | No | Yes |
| Education Expenses | 500 – 1,200 | No | Yes |
New Tax Refund System – Documents Needed for Faster Refund Processing
To ensure your refund is processed without delay, keep these documents ready and submitted via SARS eFiling:
- Valid South African ID
- Bank verification letter or latest stamped bank statement
- Medical aid certificate
- RA fund statements
- Travel logbook (if applicable)
- Proof of employment or IRP5 certificate
- Supporting receipts for additional deductions
New Tax Refund System – What to Do If Refund Is Delayed
If you haven’t received your refund within 15 working days, follow these steps:
- Log in to your SARS eFiling account
- Check the “Refund History” tab
- Confirm banking details are verified
- Upload any requested documents
- Call SARS helpline if needed
Penalties for Late Filing or False Declarations
Taxpayers should avoid delaying submissions or making false claims. SARS has increased fines for late or fraudulent filing.
Possible Penalties You May Face
- Late submission penalty: Up to R250/month
- Understatement penalty: Up to 200% of tax owed
- Criminal prosecution in severe fraud cases
- Audit hold on refunds for suspicious claims
- Blacklisting on SARS compliance record
Timeline of Refund Payouts Based on Submission Date
The following table summarizes refund timelines depending on when you file your return.
| Filing Date | Refund Start Date | Estimated Disbursement | Mode of Payment | Requires Follow-Up |
|---|---|---|---|---|
| June 3 – June 15 | June 15 – June 30 | Within 10 working days | Bank Transfer | No |
| June 16 – June 30 | July 1 – July 10 | Within 12 working days | Bank Transfer | No |
| July 1 – July 15 | July 16 – July 30 | Within 15 working days | Bank Transfer | Possibly |
| July 16 – July 31 | Aug 1 – Aug 15 | Within 15 working days | Bank Transfer | Likely |
The new tax refund system represents a significant improvement in how tax returns are processed in South Africa. By automating refund estimations and aligning payouts to income levels, SARS aims to build greater trust and efficiency in its operations. Taxpayers are strongly advised to file early, verify their bank details, and stay up to date with deductions. Filing accurately and on time ensures not only faster refunds but also protects you from compliance penalties.
Contact Details for SARS
- SARS eFiling Helpdesk: 0800 00 7277
- Official Website: www.sars.gov.za
- Mobile App: Search for “SARS MobiApp” in the Play Store or App Store
- Walk-in Centers: Available in all major cities, appointments required
- Email Support: [email protected]
FAQs of Tax Refund
Who qualifies for a refund under the new system?
Any registered taxpayer with valid returns and eligible deductions.
Is it mandatory to have a bank account?
Yes, refunds are only issued to verified bank accounts.
Do I need to submit receipts for all deductions?
Only for manually claimed ones like travel and home office expenses.
Can I check refund status online?
Yes, via the SARS Mobile App or eFiling portal.
What happens if I miss the 31 July deadline?
You may be fined and your refund could be delayed or denied.