Two-Pot Withdrawal Tax — Marginal Rate, Not the Lump-Sum Table

How it is taxed

The two-pot system started 1 September 2024. A withdrawal from the savings component is included in your taxable income and taxed at your marginal rate. It is not taxed on the retirement lump-sum tables. SARS Budget 2026 FAQs and the fund directive process say the same thing. IRP5 source code: 3926.

The directive can be short

The fund asks SARS for a tax directive before it pays you. Outstanding SARS debt can come off the payout. If you have other income the directive did not fully see, the assessment can show a shortfall. That is why people who “already paid tax at the fund” still owe on eFiling.

How often and how much

Typically one savings withdrawal per tax year (1 March – 28 February), subject to fund rules. Minimum is commonly R2,000. There is no extra “bonus table” that makes a large withdrawal cheap. Higher taxable income means a higher marginal slice on that withdrawal.

Retirement contributions are a different rule

What you contribute is still section 11F: lesser of 27.5% of the greater of remuneration or taxable income, or R430,000 for the 2027 year of assessment. Withdrawing from the savings pot does not create a matching deduction.

Questions

Is a two-pot withdrawal tax-free?

No. Savings-component withdrawals are taxed at your marginal income tax rate.

What is IRP5 code 3926?

The source code for a two-pot savings component withdrawal.