Income deductions come before tax calculations; rebates and credits are applied after.
Donations to approved charities can only be deducted up to 10% of taxable income, not the full donation amount.
Medical aid contributions are not deducted directly from taxable income; instead, a medical tax credit is applied to the calculated tax.
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Mr. Hambury explains income deductions using a hypothetical case where someone earns 240,000 rand annually and donates 12% to charity. Only 10% of taxable income, 24,000 rand, can be deducted. He calculates tax using the 2024-2025 tax table, subtracting a primary rebate and applying a medical tax credit, resulting in a final tax payable of 17,277 rand.
“The donation deduction is generally limited to 10% of taxable income before that donation deduction.”
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