South Africa has two special tax regimes that can save small businesses money: Turnover Tax and the Small Business Corporation (SBC) rates. They work very differently, and picking the right one matters.
Turnover Tax — tax on your turnover
Turnover Tax is a simplified regime for micro-businesses. Instead of working out profit, you're taxed on your turnover (total income):
| Turnover | Rate |
|---|---|
| R0 – R335,000 | 0% |
| R335,001 – R500,000 | 1% above R335,000 |
| R500,001 – R750,000 | R1,650 + 2% |
| R750,001 – R1,000,000 | R6,650 + 3% |
Who qualifies: turnover up to R1 million, with various rules (mostly individuals, sole proprietors, partnerships and small companies).
Best for: very small businesses with high margins and low expenses, who value simplicity — Turnover Tax replaces income tax, and can simplify provisional tax and VAT admin.
SBC — reduced rates on your profit
SBC rates apply to taxable income (profit), not turnover, with a generous 0% band:
| Taxable income | Rate |
|---|---|
| R0 – R95,750 | 0% |
| R95,751 – R365,000 | 7% above R95,750 |
| R365,001 – R550,000 | R18,848 + 21% |
| R550,001+ | R57,698 + 27% |
Who qualifies: companies (and close corporations) with turnover under R20 million, individual shareholders only, and other conditions.
Best for: businesses with meaningful expenses (so profit is well below turnover) that still want lower rates than the flat 27%.
The key difference
- Turnover Tax ignores your costs — great if you have few, painful if you have many.
- SBC taxes profit — so if your margins are thin, SBC almost always wins.
How to choose
Run your numbers both ways. Our small business tax calculator compares standard company tax (27%), SBC, and Turnover Tax side by side so you can see the cheapest option for your figures.
Whichever regime you pick, you'll still need clean books and to hit your SARS deadlines. 360books keeps both in check — built for South African small businesses.