Value Added Tax (VAT) is an indirect tax on the consumption of goods and services in South Africa. The standard
VAT rate in South Africa is 15%, collected by SARS-registered vendors on all taxable supplies. All
businesses with taxable turnover above R1 million must register as VAT vendors.
VAT is governed by the VAT Act 89 of 1991. The rate increased from 14% to 15% in April 2018. Refer to the official SARS website for the latest regulations
and filing requirements.
How VAT Calculations Work in South Africa
Adding VAT (VAT Inclusive)
Formula: Add VAT
Total = Amount × 1.15
Worked Example — Adding VAT
A product costs R800 before VAT. Multiply R800 × 1.15 = R920. The VAT amount is R120. The VAT inclusive price is
R920.
Removing VAT (VAT Exclusive)
Formula: Remove VAT
Amount excl. VAT = Total ÷ 1.15
Worked Example — Removing VAT
A receipt shows R1,150 including VAT. Divide R1,150 ÷ 1.15 = R1,000. The price before VAT is R1,000. VAT paid was
R150.
Reverse VAT Calculation
Formula: Reverse VAT
Original Amount = VAT Amount ÷ 0.15
Worked Example — Reverse VAT
VAT paid was R225. Divide R225 ÷ 0.15 = R1,500. The original price before VAT was R1,500.
VAT Rates in South Africa
Type
Rate
Example
Standard Rate
15%
Most goods and services
Zero Rated
0%
Brown bread, milk, eggs, rice
VAT Exempt
N/A
Financial services, residential rent
The standard 15% rate applies to the majority of goods and services. Zero-rated items are taxable at 0%, allowing
vendors to claim input VAT. Exempt supplies fall outside the VAT system entirely. See our full guide on zero-rated items and VAT exemptions in South Africa.
Frequently Asked Questions
What is the VAT rate in South Africa?
The standard VAT rate is 15% since April 2018, set by SARS under the VAT Act 89 of 1991.
How do I add VAT to a price?
Multiply the amount by 1.15. Example: R500 × 1.15 = R575. The VAT portion is R75.
How do I remove VAT from a price?
Divide the total by 1.15. Example: R575 ÷ 1.15 = R500. The price excluding VAT is R500.
What is VAT inclusive and VAT exclusive?
VAT inclusive means the price already includes the 15% VAT. VAT exclusive means the 15% must still be added to the
price.
Is VAT 15% on everything in South Africa?
No. Basic foods such as brown bread, milk, and eggs are zero-rated at 0%. Residential rent and some financial
services are entirely VAT exempt.
Do I need to register for VAT?
Registration is compulsory when annual turnover exceeds R1 million. Voluntary registration is allowed from R50,000
in taxable turnover.
Sarah van der Merwe CA(SA)
Updated April 2026 | Sarah is a Chartered Accountant with 12 years of experience in VAT compliance for South African businesses. This tool is reviewed regularly to ensure SARS compliance.
