Most provisional taxpayers know about the first provisional tax payment in August and the second payment at the end of February.

But there is also a third provisional tax payment.

Unlike the first two payments, the third payment is voluntary. It is sometimes referred to as an additional payment or top-up payment.

So why would you voluntarily pay SARS more tax?

Because by the time your final tax position becomes clear, you may discover that the first two provisional payments were not enough to cover your actual income-tax liability.

A third payment can help reduce the interest that may otherwise arise on that shortfall.

What Is the Third Provisional Tax Payment?

The third provisional tax payment is an additional payment made after the end of the tax year.

It is not another compulsory provisional tax return.

Instead, it gives taxpayers an opportunity to top up the tax already paid before the relevant effective date.

For a provisional taxpayer, the first two payments are based on estimates of taxable income.

The third payment will often be based on a much clearer picture of the taxpayer’s actual taxable income for the completed year.

When Is the Third Provisional Payment Due?

For an individual or company with a February year-end, the effective date is seven months after the end of the tax year.

This generally means:

30 September

For example, for the tax year ending 28 February 2026, the voluntary third payment is due by 30 September 2026.

For taxpayers with an approved financial year-end other than the end of February, the effective date is generally six months after year-end.

For example, a company with a 31 May year-end would generally have its third-payment date at the end of November.

As with other SARS payment deadlines, weekends and public holidays need to be considered. Where the deadline falls on a Saturday, Sunday or public holiday, payment needs to be made by the preceding business day.

Do I Have to Make a Third Payment?

No.

The first and second provisional tax periods are compulsory for provisional taxpayers, but the third payment is voluntary.

If your first and second provisional payments adequately covered your eventual tax liability, there may be no need for a top-up.

The third payment becomes useful when you discover that there is likely to be a shortfall.

Why Might There Be a Shortfall?

There are many legitimate reasons why your actual taxable income might differ from the estimate used for your second provisional payment.

For example:

• Final accounting adjustments increased taxable profit
• Some expenses turned out not to be deductible
• Additional income was identified
• Investment certificates revealed additional taxable income
• A capital gain had not been fully accounted for
• Rental income was higher than expected
• Certain provisions or accounting expenses were treated differently for tax purposes
• Year-end transactions were only finalised after February
• The business performed better than anticipated

This does not necessarily mean the February calculation was deliberately incorrect.

It may simply mean better information became available later.

A Simple Example

Suppose your final expected income-tax liability is calculated as:

R180,000

During the year you paid:

First provisional payment: R70,000

Second provisional payment: R80,000

Total provisional tax already paid:

R150,000

That leaves a potential shortfall of:

R30,000

Instead of simply waiting for SARS to issue the final assessment, it may be appropriate to make an additional payment towards that R30,000 shortfall before the effective date.

The actual calculation should take account of all relevant amounts, including PAYE and applicable tax credits.

How Is the Third Payment Calculated?

Broadly, SARS calculates the third-period position using the taxpayer’s estimated total tax payable for the full year and then deducts amounts already paid or credited.

This can include:

Total estimated tax payable for the full year

Less:

Employees’ tax (PAYE) already paid

Allowable foreign tax credits

First provisional tax payment

Second provisional tax payment

The remaining amount can indicate the additional payment required.

Because more complete financial information is normally available after year-end, this calculation can be considerably more accurate than the earlier provisional estimates.

Do I Submit Another IRP6?

No.

SARS confirms that a provisional tax return is not required for the third period.

This is an important difference between the third payment and the first two provisional periods.

The first and second periods involve IRP6 provisional tax returns.

The third period is essentially a voluntary additional payment.

Why Would I Pay Before SARS Assesses Me?

The main reason is interest.

If insufficient tax has been paid by the relevant effective date, interest may potentially arise on the underpayment.

Making an appropriate third payment before that date can therefore help reduce or prevent interest on the outstanding amount.

In simple terms, if you already know that you owe SARS more money, waiting for SARS to eventually issue the assessment may cost you more.

The Third Payment Is Not a Second Chance at the February Estimate

This distinction is very important.

A taxpayer should not deliberately submit an unrealistically low second provisional estimate in February with the intention of simply correcting everything through the third payment in September.

The second provisional period has its own rules concerning underestimation.

Depending on your actual taxable income and the estimate submitted, an underestimation penalty may potentially arise.

The third payment is primarily useful for dealing with a tax shortfall and associated interest once more accurate information becomes available.

It does not automatically erase a penalty that arose because the second provisional estimate was inadequate.

Underestimation Penalties and Interest Are Different

These two concepts are sometimes confused.

An underestimation penalty can arise because the second provisional taxable-income estimate was too low under the applicable rules.

Interest can arise because insufficient tax has been paid by the relevant date.

A third payment is particularly useful in managing the second issue.

This is why simply saying:

“I’ll sort everything out in September”

is not a good provisional-tax strategy.

Your February estimate should still be prepared as accurately and reasonably as possible.

When Is a Third Payment Particularly Worth Considering?

A top-up calculation is worth considering where:

• Your accountant has completed or substantially completed your annual accounts
• Final taxable profit is higher than expected
• Significant year-end adjustments were identified
• You received additional investment information
• Capital gains were identified after February
• Certain claimed expenses were found to be non-deductible
• Your February estimate was based on incomplete records
• You already know that the first two payments will not cover the final liability

The closer your accounts are to completion, the easier it becomes to determine whether there is likely to be a shortfall.

Don’t Automatically Pay the Difference Between Accounting Profit and Your Estimate

The calculation still needs to be done correctly.

Accounting profit and taxable income are not necessarily the same thing.

Tax calculations can involve adjustments for matters such as:

• Non-deductible expenses
• Capital allowances
• Depreciation
• Assessed losses
• Capital gains
• Exempt income
• Tax credits
• Other tax-specific adjustments

A top-up payment should therefore be based on an updated tax calculation, not simply the difference between two profit figures.

What If My Final Tax Is Lower Than Expected?

You may also discover that your taxable income is lower than you estimated.

If your first and second provisional payments already exceed the likely final tax liability, there would ordinarily be no reason to make an additional top-up payment.

Any overpayment is dealt with through the normal assessment process, subject to SARS’s applicable verification and refund procedures.

It is therefore worth doing the calculation before making a third payment rather than simply paying an arbitrary additional amount “to be safe.”

Don’t Leave the Calculation Until 30 September

If you have a February year-end and believe a top-up payment may be necessary, it is sensible to review the position before the September deadline.

Waiting until the final day creates unnecessary risk.

Accounting information may need to be reviewed, adjustments calculated and payment arrangements made.

Electronic payments also need to take bank processing times into account.

Ideally, the potential top-up should be identified while the annual accounts and income-tax calculation are being prepared.

A Useful Annual Tax Routine

For a February year-end provisional taxpayer, a sensible tax-planning cycle could look something like this:

August

Prepare the first provisional estimate based on year-to-date results and a reasonable forecast for the remainder of the year.

February

Update the calculation using substantially more complete information and submit the second provisional estimate.

After February

Complete the accounting records and identify final tax adjustments.

Before September

Compare the likely final tax liability with PAYE, tax credits and provisional tax already paid.

If there is a shortfall, determine whether an additional payment should be made before the effective date.

This creates a much more controlled process than simply waiting for the annual SARS assessment.

Good Bookkeeping Makes the Third Payment Easier

As with the first and second provisional tax calculations, accurate accounting records make a substantial difference.

If the year’s bookkeeping is substantially complete shortly after February, the likely final tax position can be determined relatively early.

If the records are months behind, the taxpayer may reach September without knowing whether a substantial tax shortfall exists.

Provisional tax therefore highlights a broader financial principle:

Up-to-date accounting information is not only useful for SARS—it helps you manage your business.

Should I Make a Third Provisional Payment?

There is no universal answer.

If your first and second provisional payments appear sufficient, a third payment may not be necessary.

If your updated tax calculation indicates that you have underpaid, a top-up payment may be beneficial.

The decision should be based on:

• Your actual or updated taxable income
• PAYE already paid
• First and second provisional payments
• Applicable tax credits
• The expected final income-tax liability
• The potential interest consequences of leaving a shortfall unpaid

The important thing is to calculate the position rather than guess.

Need Help Determining Whether You Should Make a Top-Up Payment?

The period after financial year-end is an ideal time to compare your provisional tax payments with your more accurate annual tax position.

Boatwright Consulting can assist with reviewing your taxable income, calculating your expected final tax liability and determining whether an additional provisional tax payment should be made before the effective date.

Contact Boatwright Consulting if you are concerned that your first and second provisional tax payments may not be sufficient or would like your tax position reviewed before the September top-up deadline.

This article provides general information and should not be regarded as tax advice specific to your individual circumstances.