Dividend Tax in South Africa: How It Works and How to Calculate It

Dividends are a great way for shareholders to receive returns from their investments. But in South Africa, dividends are subject to a special tax called Dividends Tax (DT).

If you’re earning dividends from a South African company, it’s crucial to know how much tax you’ll pay, how it’s deducted, and how to use our Dividend Tax Calculator to estimate your liability.

What is Dividends Tax?

Dividends tax is a withholding tax charged at 20% on dividends paid to shareholders. It is deducted before you receive your dividend, meaning the company paying out the dividend (or the regulated intermediary like a broker) withholds and pays SARS on your behalf.

👉 Unlike company tax, which applies to profits, dividends tax applies to shareholder payouts.

Who Pays Dividend Tax in South Africa?

  • South African resident individuals receiving dividends from listed or private companies.

  • Foreign investors earning dividends from South African companies (with possible double-taxation relief depending on treaties).

  • Trusts and estates that receive dividend income.

👉 Companies themselves do not pay dividends tax; it’s levied on the shareholder.

How Dividend Tax Works (Practical Example)

Example:
You own shares in ABC Ltd, and the company declares a dividend of R10,000.

  • Dividend before tax = R10,000

  • Dividend tax (20%) = R2,000

  • Net dividend paid to you = R8,000

If you qualify for an exemption (for example, if you are another South African company receiving dividends), no dividends tax is withheld.

Current Dividend Tax Rate in South Africa

  • Standard Rate: 20%

  • Exemptions:

    • South African resident companies receiving dividends

    • Certain retirement funds

    • Public benefit organisations (PBOs)

  • Reduced Rates: May apply to foreign investors under Double Taxation Agreements (DTAs).

Dividend Tax Calculator

Use our calculator below to estimate your after-tax dividends:

South African Dividend Withholding Tax Calculator (2026)

Enter dividend to calculate withholding tax

Enter details to calculate DWT

Benefits of Using the Calculator

  • Quick estimate of how much tax you’ll pay.

  • Helps investors plan their net income from dividends.

  • Useful for comparing investment options between local and foreign shares.

Applications of Dividend Tax Knowledge

  • Investors – to know what they will receive after tax.

  • Financial planners – for structuring portfolios efficiently.

  • Accountants & Tax Advisors – when advising clients on investments.

  • Businesses – to communicate transparent returns to shareholders.

10 Frequently Asked Questions (FAQs)

1. What is the dividends tax rate in South Africa?

It is currently 20%, unless you qualify for an exemption or treaty relief.

2. Who is responsible for paying dividends tax?

The company or intermediary (like a broker) deducts it before paying you.

3. Can dividend tax be reduced?

Yes, if you’re a foreign investor with a tax treaty, the rate may drop (e.g., to 10% or 15%).

4. Are all dividends taxed?

No. Dividends to resident companies, retirement funds, and certain PBOs are exempt.

5. How do I claim an exemption?

You must submit a dividends tax exemption declaration form (DTR01) to the company or broker.

6. Do I need to declare dividend income on my tax return?

Yes, dividends should be declared for record purposes, even though tax is already withheld.

7. How does dividend tax affect my investments?

It reduces the cash you actually receive, so always check the net dividend when planning.

8. What if my broker forgets to deduct dividend tax?

You may be personally liable, and SARS can recover it from you.

9. Are foreign dividends taxed in South Africa?

Yes, but they may qualify for a foreign tax credit depending on your circumstances.

10. Can I avoid paying dividend tax legally?

Only if you qualify for an exemption or reduced treaty rate. Otherwise, it is mandatory.

Final Thoughts

Dividend tax in South Africa is straightforward: 20% withheld before you’re paid. But exemptions, treaties, and correct planning can make a big difference in your after-tax return.

👉 Use our Dividend Tax Calculator above to quickly check how much tax applies to your dividend payout.