Tax-Free Savings (TFSA) Calculator ☆ Stoor
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The limits, and the one that really binds
- R46,000 per tax year (raised from R36,000, effective 1 March 2026);
- R500,000 lifetime — this is the one that matters most;
- All growth is tax free — no tax on interest, dividends or capital gains inside the account, and nothing to declare when you withdraw.
At R46,000 a year you reach the lifetime cap in just under eleven years. After that you cannot contribute more — but the money already inside keeps growing tax free indefinitely, which is where the real benefit lives.
The rule that costs people the most
Withdrawals do not restore your allowance. If you contribute R46,000 this year, withdraw R20,000, then put it back, that R20,000 counts as a new contribution — and you have now exceeded the annual limit.
Excess contributions are taxed at 40% of the amount over the limit. That is not a small penalty, and it is entirely avoidable: treat a TFSA as one-way money.
Why the tax saving compounds into something large
The benefit is small in year one and substantial over decades, because you are not just saving tax — you are keeping the money that tax would have taken, and that money compounds too.
Outside a TFSA, interest above the annual exemption (R23,800 under 65, R34,500 at 65 and over) is taxed at your marginal rate; dividends attract 20% dividends tax; and gains attract CGT above the R50,000 annual exclusion. Inside a TFSA, none of that applies.
Run the same contribution through the compound interest calculator and compare — the gap widens sharply the longer the horizon.
How to use it well
- Treat it as long-term money. Because withdrawals permanently consume your lifetime allowance, a TFSA is a poor emergency fund and an excellent multi-decade vehicle;
- Use growth assets, not cash. The benefit is proportional to the growth you shelter. Holding a TFSA in a low-interest cash account wastes most of the advantage — the tax you avoid on 2% interest is negligible;
- Watch the fees. Fee drag over decades is real, though frequently overstated in marketing — compute it on your own numbers rather than trusting a soundbite. A percentage point of fees on a long horizon is worth checking;
- Track contributions across providers. The limits are per person, not per account. If you hold two TFSAs, you are responsible for the combined total — SARS aggregates them;
- Start early rather than large. Time matters more than the amount, and the lifetime cap means the earlier you begin, the longer everything inside compounds.
TFSA or retirement annuity?
They solve different problems and most people benefit from both:
- A retirement annuity gives you a deduction now — up to 27.5% of income, capped at R430,000 a year — but the money is locked until retirement and the eventual income is taxed. Test the refund it produces in the tax refund calculator;
- A TFSA gives you no deduction now, but everything comes out tax free and you can access it if you must (at the cost of the allowance).
A common ordering: employer fund first (especially if matched), then use the RA deduction if your marginal rate is high, then fill the TFSA. See the retirement calculator.
Frequently asked questions
What happens if I over-contribute?
The excess is taxed at 40%. Track contributions across every account you hold — the limits are per person.
Can I withdraw whenever I want?
Yes, and it is tax free — but the withdrawal does not restore your allowance. Once used, that portion of your R500,000 lifetime cap is gone permanently.
Can I open one for my child?
Yes. Each person has their own R500,000 lifetime limit, and a child's long horizon is exactly where tax-free compounding does the most work. Just remember the allowance is the child's, not an extension of yours.
Should I hold cash or shares in it?
The shelter is worth most on higher growth. Cash in a TFSA shelters very little tax, so many people use growth assets here and keep short-term cash elsewhere.
Is a TFSA better than a normal savings account?
For long-term money, generally yes — but a normal account is the right home for an emergency fund, because withdrawing from it costs you nothing permanent.
Limits are R46,000 per tax year from 1 March 2026 and R500,000 lifetime; excess contributions are taxed at 40%. Interest exemptions, dividends tax and CGT figures are the 2026/27 values. General information, not financial advice — confirm with SARS or a registered adviser.