Provisional tax can be confusing, especially when it comes to the timing of payments. If you miss the first payment, do you need to catch it up, or can you just pay the second one? And what happens if you become a provisional taxpayer halfway through the year - are you still expected to file a first return? In this post, we’ll attempt to clear up the confusion around first and second provisional tax payments.

Brief summary

As a provisional taxpayer, you’re required to submit two provisional tax returns each year and make two corresponding payments to SARS. The provisional return is also called an IRP6.

If you underestimate your total tax for the year, you can make a third (optional) payment - often called a "top-up" payment - by 30 September, before filing your annual income tax return. This helps you avoid interest on any outstanding tax.

Your first provisional return (Period 1) is due by the end of August. On this return, you must estimate your total income for the full 12-month tax year. However, the tax calculated is halved so you pay tax for the first six months of the year only.

Your second provisional return (Period 2) is due by the end of February. This time, you'll report your actual income for the full year, rather than an estimate, because you should have most of these figures available by now. The return will then calculate the remaining tax you owe, after deducting your first provisional payment (assuming you made it) and any PAYE (employee’s tax) already paid to SARS on your behalf. For further details, please click here.

Payment Reference number (PRN)

It is very important to use the correct payment reference number when making your payment to SARS. This will ensure SARS allocates it to your tax account. The final 6 digits of the PRN denotes if it's Period 1 or Period 2 tax payment and the relevant tax year.

Period 1: 10-digit tax reference number00012025 

Period 2: 10-digit tax reference number00022025 

There are certain situations where you might not file a Period 1 IRP6:

1. You earned additional income after August and therefore qualifed as a provisional taxpayer in the second half of the tax year. In this case you can skip filing the Period 1 IRP6 and only file the Period 2 IRP6.
2. You missed the August deadline for Period 1 and only remembered to file by February. In this case, you can go ahead and file the Period 2 IRP6 and pay the tax due for the full year. 

NB: In either of these circumstances, you might have to explain to SARS on your assessment why they should waive (remove) any penalties they might impose for the non-submission of your first provisional return.

Please note, if you do end up filing Period 1 and Period 2 at the same time, always ensure you use the correct payment reference number so that SARS can allocate your tax payment against the correct period.