Provident Fund Withdrawal South Africa
Understand your provident fund withdrawal options — at retirement, on resignation, under two-pot, and the tax on each.
Two-Pot CalculatorYour 4 Withdrawal Options
1. At Retirement (Age 55+)
Take up to 1/3 as a lump sum (taxed on the retirement table — first R550K tax-free). Convert the rest into a monthly annuity. Best tax outcome.
2. Two-Pot Savings Pot (Before Retirement)
From Sep 2023, access the savings pot (1/3 of new contributions) once per year (min R2,000). Taxed at your marginal rate. Available from any age.
3. On Resignation (Cash Payout)
Take the full vested fund as cash. Taxed on the withdrawal table (only R27,500 tax-free). Permanently reduces retirement savings. Avoid unless critical.
4. Preservation (Best on Resignation)
Transfer to a preservation fund or RA when changing jobs. Zero tax on transfer. Savings keep growing. You can still make one withdrawal from the preserved fund.
Tax on a R300,000 Provident Fund Payout
| Scenario | Tax-Free | Tax Payable | Net Received |
|---|---|---|---|
| Retirement withdrawal | R300,000 (100%) | R0 | R300,000 |
| Resignation cash payout | R27,500 | R49,095 | R250,905 |
| Preserve + withdraw at retirement | R300,000+ (100%) | R0 | R300,000+ (grown) |
Get Expert Advice Before You Withdraw
A financial advisor can show you how to minimise tax on your provident fund — free consultation.
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