When you leave your employer before retirement, your Fund Value becomes payable to you. This is a sum that represents the total contributions made, together with the investment returns achieved, less expenses.
When withdrawing from the Funds, you have the following options:
Any portion of your benefit that you choose to take in cash will be taxed as follows:
Lump sum Amount | Rate of Taxation |
R0-R25000 | 0% of taxable income |
R25 001 - R660 000 | 18% of taxable income above 25 000 |
R660 001 - R990 000 | R114 300 + 27% of taxable income above R660 000 |
You may only receive a total of R25 000 tax free once before retirement. Therefore, if you withdraw again from another fund, the amount already received as a tax-free portion previously will be taken into account.
If you transfer your Fund Value to a retirement annuity, another retirement fund, or a preservation fund, it will not be taxed.
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