South African Taxable Local Interest Calculator: Work Out Your Taxable Interest

If you earn interest from local banks or investment accounts in South Africa, you may wonder how much of it is taxable. SARS gives every taxpayer a small exemption, but anything above that is subject to income tax.

Our Taxable Local Interest Calculator helps you quickly estimate how much of your interest income is taxable.

What is Taxable Local Interest?

  • Interest is the income you earn from savings accounts, fixed deposits, bonds, and similar investments.

  • SARS allows a portion of this interest to be tax-free each year.

  • The rest is added to your taxable income and taxed according to your income bracket.

Current SARS Local Interest Exemptions (2025/26 Tax Year)

  • Under 65 years: R23,800 per year is exempt.

  • 65 years and older: R34,500 per year is exempt.

Any interest you earn above these amounts is taxable.

Practical Example: Calculating Taxable Interest

Example:
Sipho is 35 years old and earned R40,000 in interest this year.

  1. Total local interest = R40,000

  2. Less exemption (under 65) = R23,800

  3. Taxable interest = R16,200

👉 This R16,200 is added to Sipho’s other income (salary, rental, etc.) and taxed at his marginal tax rate.

South African Taxable Local Interest Calculator

Use our calculator below to check how much of your interest is taxable:

Taxable Local Interest Calculator

Work out the amount of local interest which is taxable on your income tax assessment.

Results

Taxable Interest: R0

Why Use the Taxable Local Interest Calculator?

  • Quickly see if your interest is above the exemption.

  • Helps plan your investments more efficiently.

  • Shows how much will be added to your taxable income.

  • Useful for both individuals and retirees.

Who Should Use the Calculator?

  • Savers – earning interest from bank accounts.

  • Investors – with money in fixed deposits, bonds, or money market accounts.

  • Retirees – who often rely on interest income.

  • Taxpayers filing with SARS – to prepare before submitting their returns.

10 Frequently Asked Questions (FAQs)

1. What is the local interest exemption in South Africa?

R23,800 (under 65) and R34,500 (65 and older).

2. Does foreign interest qualify for this exemption?

No, the exemption applies only to South African-sourced interest.

3. Is interest below the exemption taxable?

No, if your interest is below the threshold, you pay zero tax on it.

4. Is interest from a fixed deposit taxable?

Yes, unless it falls below the exemption.

5. Are tax-free savings accounts (TFSA) included?

No, all income earned in a TFSA (including interest) is 100% tax-free.

6. Do minors (children) qualify for the exemption?

Yes, every taxpayer, regardless of age, qualifies.

7. Do retirees get a higher exemption?

Yes, R34,500 per year for individuals 65 and older.

8. Is the exemption per account or total across accounts?

It’s based on your total annual interest income, not per account.

9. What happens if I earn above the exemption?

The excess is added to your taxable income and taxed at your marginal rate.

10. How do I report taxable interest to SARS?

Declare it in the interest income section of your ITR12 tax return.

Final Thoughts

Interest income may seem small, but over time it adds up—and SARS wants its share. Knowing how much is taxable helps you manage your finances better.

👉 Use our South African Taxable Local Interest Calculator today to see if you’ll pay tax on your savings.