3 April 2025
The annual tax rates have been received from SARS for annuitants who earn income from more than one source. These rates are already available on Glacier’s Intermediary Web to conveniently view, and you can indicate your clients’ tax rate selections online.
Alternative tax rates for annuitants with more than one source of income
Since 2022, SARS has been providing annuity administrators with tax rates for those annuitants who earn income from more than one source.
The intention was to provide a more accurate PAYE deduction amount so that annuitants are unlikely to be faced with an unexpected tax bill at the end of the tax year.
Annuitants may opt out of the rate provided by SARS
A client may ask Glacier to deduct PAYE at a rate higher than the rate provided by SARS, or to apply the normal PAYE deduction rate. In other words, they may opt out of having the SARS rate applied to their income.
The new rates received from SARS for the 2026 tax year are available online. These rates will be applicable from 1 May 2025. Previously, these rates were effective from April 1st; however, due to the postponement of the tabling of the National Budget, SARS provided the rates and the accompanying directive later than usual.
The paragraph 2(2B) rates will apply per affected annuitant, unless:
- The annuitant has a valid opt-out instruction loaded from March 2023, in which case the new 2(2B) fixed rate will not be applied, but the PAYE rate (or a voluntary higher rate on record) will be applied; or
- The annuitant provides us with a new instruction now to opt out of the 2(2B) fixed rates of the directive.
Conveniently opt out online
Sanlam Life
Sanlam Life will communicate with intermediaries who have affected clients, and provide a list of these clients, as was done last year.
During the week of 31 March 2025, a letter will be sent to affected clients. This letter will inform them of the rate and remind them of their options, including the option to opt out of the rate provided by SARS if they have not done so in the previous tax year (in other words for the PAYE rate based on income received at Sanlam Life only, to apply) or to opt in to the rate provided by SARS, if they opted out previously.
To opt in or opt out, the client must complete and sign the “SARS PAYE Deduction Percentage” form, or
send an instruction by email to instalments.tax@sanlam.co.za. In the absence of a response or a valid opt-out instruction loaded from March 2023, Sanlam Life will apply the paragraph 2(2B) rates
from 30 April 2025.
