A late return does not cost a once-off fine. It costs a fixed amount every month it stays outstanding, and the bill is set by what you earned. Here is how SARS penalties work, and why records kept through the year keep them away.
Ask most self-employed South Africans what happens if a tax return is late and the answer is usually a shrug and a guess at a small fine. The reality is different. SARS charges a fixed penalty for every month a return stays outstanding, and the amount grows with your income.
This guide covers the penalty for a late or missing return, the penalties that apply when a return is wrong, what SARS can waive, and the habit that stops all of it from starting.
When an income tax return is not submitted, SARS can charge what it calls an administrative non-compliance penalty. This is a fixed amount, not a percentage of the tax you owe. In fact, it applies even if you would have owed no tax at all.
Since 1 December 2022, SARS can apply this penalty to an individual who has just one outstanding return. Before that change, it was reserved for people with more than one return outstanding, which is why older advice online often understates the risk.
The monthly amount is set by your assessed loss or taxable income for the preceding year. SARS uses the following table:
| Assessed loss or taxable income for the preceding year | Penalty per month |
|---|---|
| Assessed loss | R250 |
| R0 to R250,000 | R250 |
| R250,001 to R500,000 | R500 |
| R500,001 to R1,000,000 | R1,000 |
| R1,000,001 to R5,000,000 | R2,000 |
| More than R5 million, up to R10 million | R4,000 |
| More than R10 million, up to R50 million | R8,000 |
| Above R50 million | R16,000 |
The important word is month. Because the penalty repeats, a return left outstanding for a long time becomes expensive quickly, even at the lowest band.
Submitting the outstanding return stops the penalty from growing. It does not cancel the months that have already been charged.
For more on who is required to file in the first place, and why it is not optional, see Not filing a tax return is a criminal offence, not just a missed deadline.
A late return and a late payment are treated separately. If you are a provisional taxpayer and your first or second provisional payment reaches SARS after the due date, SARS can charge a penalty of 10% of the amount unpaid by that date.
On top of any penalty, interest accrues on tax that is paid late, at a rate SARS prescribes and adjusts from time to time. Not sure whether provisional tax applies to you? Our guide Provisional or non-provisional taxpayer: which one are you explains the difference.
Filing on time does not protect you if the return understates what you owe. Where SARS finds an understatement, it can charge an understatement penalty, worked out as a percentage of the shortfall. The percentage depends on the behaviour behind it:
| Behaviour | Standard case | Obstructive or repeat case | Voluntary disclosure after audit notice | Voluntary disclosure before audit notice |
|---|---|---|---|---|
| Substantial understatement | 10% | 20% | 5% | 0% |
| Reasonable care not taken in completing the return | 25% | 50% | 15% | 0% |
| No reasonable grounds for the tax position taken | 50% | 75% | 25% | 0% |
| Impermissible avoidance arrangement | 75% | 100% | 35% | 0% |
| Gross negligence | 100% | 125% | 50% | 5% |
| Intentional tax evasion | 150% | 200% | 75% | 10% |
For most freelancers and sole proprietors, the row that matters is reasonable care not taken. A return built from guesses, missing receipts or a year rebuilt from memory is exactly the kind of return that is hard to defend as having been completed with reasonable care.
It works in the other direction too. Deductions you could not prove get left off, and that money is simply lost. We covered that side in Why South African freelancers lose money at tax time.
SARS does allow taxpayers to ask for a penalty to be remitted, but the grounds are specific:
Being busy, not knowing the rules, or not having your records together are not listed grounds. Remission is a safety net for genuine exceptions, not a plan.
A return is only as fast and as accurate as the records behind it.
For self-employed people, a late return is rarely a decision. It is usually the result of a job that feels too big to start: twelve months of income, receipts and trips to piece together before a single figure can go on the form. The longer that job waits, the more months the penalty can run.
Records kept through the year change that in three ways:
The vehicle logbook follows the same rules, and the same logic applies: the easiest record to defend is the one kept on the day. Our guide Who the SARS mileage rate is really for covers what a SARS logbook needs to show. If you are unsure which costs count in the first place, Can I claim it? walks through how to tell a business expense from a personal one.
SARS penalties grow every month a return waits. Records kept as you go are what stop the waiting.
The 2026/27 tax year runs from 1 March 2026 to 28 February 2027, and it is still open. Every expense, invoice and business trip from now until the end of February belongs to it. Starting your records now means the return for this year is assembled as the year happens, not reconstructed after it ends.
The administrative non-compliance penalty ranges from R250 to R16,000 per month, depending on your assessed loss or taxable income for the preceding year. It repeats every month the return is outstanding, for up to 35 months where SARS has your address.
Yes. Since 1 December 2022, the penalty can apply to an individual with one or more outstanding returns for years of assessment from 2007 onwards.
Submitting stops new monthly penalties. Penalties already charged remain unless SARS agrees to remit them on one of its listed grounds.
Five years from the date you submit the return. If a required return has not been submitted, the records must be kept until it is.
MyExpense lets South African freelancers and sole proprietors capture receipts, income and business trips as they happen, sorted the way the ITR12 asks for them, so this year's return is already organised when you need it. Start on the free tier today.
This article is general information about SARS penalties and record-keeping, based on SARS's published guidance as checked in November 2026. It is not personalised tax or legal advice. Penalty amounts and rules can change. Confirm your position with SARS or a registered tax practitioner.