Bracket creep is the phenomenon where a state collects increased revenue without making increases to the tax rate. Instead the state relies on inflation to bring more individual taxpayers into higher tax brackets, resulting in an increased revenue collection. While South African individual taxpayers have been spared an increase in tax rates in the recent past, this was based on the intention that bracket creep would provide the additional revenue required by the state.
The Minister has announced that the tax thresholds and seven tax brackets for individuals will be raised by 5%. The two tables below demonstrate the brackets for 2020/21 and 2021/22:
2022 tax year (1 March 2021 – 28 February 2022)
| Taxable Income (R) | Rates of Tax (R) |
| R1 – R216,200 | 18% of taxable income |
| R216,201 – R337,800 | R38,916 + 26% of taxable income above R216,200 |
| R337,801 – R467,500 | R70,532 + 31% of taxable income above R337,800 |
| R467,501 – R613,600 | R110,739 + 36% of taxable income above R467,500 |
| R613,601 – R782,200 | R163,335 + 39% of taxable income above R613,600 |
| R782,201 – R1,656,600 | R229,089 + 41% of taxable income above R782,200 |
| R1,656,601 and above | R587,593 + 45% of taxable income above R1,656,600 |
| Taxable Income (R) | Rates of Tax (R) |
| R1 – R205,900 | 18% of taxable income |
| R205,901 – R321,600 | R37,062 + 26% of taxable income above R205,900 |
| R321,601 – R445,100 | R67,144 + 31% of taxable income above R321,600 |
| R445,101 – R584,200 | R105,429 + 36% of taxable income above R445,100 |
| R584,201 – R744,800 | R155,505 + 39% of taxable income above R584,200 |
| R744,801 – R1,577,300 | R218,139 + 41% of taxable income above R744,800 |
| R1,577,301 and above | R559,464 + 45% of taxable income above R1,577,300 |
The primary, secondary and tertiary rebates will similarly increase by 5% to R14,958, R8,199 and R2,736 respectively. While the medical schemes tax credit will see an inflationary increase to R322 for the first two members and R224 for all subsequent members.
The increase in the tax brackets for individuals means there will be no bracket creep this year. The Budget projects that this will provide R2,2 billion worth of relief to individual taxpayers. On the other hand, the Budget projected that had the tax brackets not been raised, bracket creep would have resulted in an additional R11,2 billion in collected revenue. The bracket increase therefore brings a welcome outcome for all taxpayers in the wake of the COVID-19 pandemic.