Value Added Tax is one of those topics that catches small business owners off guard in South Africa. You start charging clients, your accountant mentions you should "add VAT", and suddenly you are unsure whether 15% goes on top of your price or comes out of it — and whether the right amount has actually been calculated.
This guide covers exactly how VAT works in South Africa: the current rate, when you have to register, how to calculate it both ways, what SARS requires on your invoices, and how to get the math right every time using a free calculator.
VAT (Value Added Tax) is a consumption tax charged on most goods and services sold in South Africa. It is administered by SARS (the South African Revenue Service) under the Value Added Tax Act 89 of 1991.
The current South African VAT rate is 15%. This has been fixed since 1 April 2018, when it was raised from 14%. Almost all goods and services are subject to VAT, with a small list of zero-rated items (basic foodstuffs like brown bread, maize meal, rice, vegetables, fruit, eggs, and milk) and a few exempt categories (financial services, residential rental, educational services).
When you buy something for R100 plus VAT, the seller adds R15 to the price (you pay R115). The seller collects that R15 from you, then pays it to SARS on their next VAT return. The seller also gets to claim back any VAT they paid to their own suppliers, so the net effect on businesses is that they collect VAT from customers and pass it through to SARS.
VAT registration in South Africa is compulsory once your business's taxable turnover exceeds R1,000,000 in any consecutive 12-month period. This is not a calendar year — it is a rolling 12-month window. If your sales hit R1 million in any 12 consecutive months, you must register within 21 days.
You can also register voluntarily once your turnover exceeds R50,000 per year. Some businesses do this even when they are below the threshold because being VAT-registered lets them claim back VAT on their business expenses.
Once registered, you must charge 15% VAT on every taxable supply, issue tax invoices (not just standard invoices) — see our guide on creating an invoice in South Africa for the specific requirements — submit VAT returns every two months, and keep records for at least 5 years.
This is the most common calculation: you have a price excluding VAT and need to work out the total your customer will pay.
Formula: Total = Net amount × 1.15
Worked examples:
Use our South Africa VAT calculator to do this instantly for any amount — no formula required.
The opposite situation: a price is quoted as VAT-inclusive and you need to know the net amount and the VAT portion separately. This matters for bookkeeping, expense claims, and figuring out the actual product cost.
Formula: Net amount = Total ÷ 1.15
Worked examples:
A common mistake is multiplying the inclusive price by 0.15 to "find the VAT". That is wrong — it gives you 15% of the inclusive price, not 15% added to the net price. Always divide by 1.15 first to get the net amount, then subtract to find the VAT portion.
If you are VAT-registered, your invoices become tax invoices and must comply with Section 20 of the VAT Act. For any transaction over R5,000, a full tax invoice must include:
Use a tool like Criply's free invoice generator with ZAR currency and the VAT field set to 15 to produce compliant tax invoices in seconds.
What if my business sells to other countries?
Exports of goods from South Africa are zero-rated for VAT, meaning you charge 0% VAT but still issue a tax invoice. Services to non-residents can also be zero-rated under certain conditions. The rules around international supplies are complex — check with your accountant for your specific situation.
Can I claim back VAT on business expenses?
Yes, if you are VAT-registered. The VAT you pay on legitimate business expenses (rent, supplies, professional services) can be claimed as input tax on your VAT return. Keep every tax invoice from your suppliers — without them, you cannot claim.
What if I am not VAT-registered? Do I have to charge VAT?
No. If you are not VAT-registered, you do not charge VAT on your invoices. You issue standard invoices (not tax invoices) and SARS does not expect any VAT payments from you. Once your turnover reaches R1 million in any 12-month period, you must register.
Can I use the VAT calculator for other countries?
Yes. Our global VAT calculator supports UK (20%), EU average (21%), South Africa (15%), Nigeria (7.5%), Kenya (16%), UAE (5%), and India GST (18%). Country-specific calculators are available for each.
Use our free South Africa VAT Calculator tool — works in your browser, nothing to install.
South Africa VAT Calculator — Free