Tax bracket creep is 'hidden' increase affecting you in 2025-26

Tax bracket creep occurs when your salary increases due to inflation, but tax brackets are not adjusted accordingly.

- Johann Rossouw

As a result, you may end up paying a higher percentage of your income in taxes, even though your actual purchasing power remains the same or even declines.

How does it work?

South Africa follows a progressive tax system, meaning that the more you earn, the higher the tax rate you pay. Typically, the government adjusts tax brackets annually to account for inflation.

However, in the 2025-26 budget, these adjustments were not made. This means that as salaries rise slightly due to inflation, more people are pushed into higher tax brackets, effectively increasing their tax burden without any official tax rate hikes.

Example of tax bracket creep

To illustrate, consider the following example:

In 2024, you earned R30 000 per month (R360 000 per year). According to the 2024-2025 tax tables, your total tax payable would be approximately R54 000.