By Chris Herbst, Chartered Business Accountant in Practice (CBAP) with CIBA, General Tax Practitioner (GTP) with SAIT, Stellenbosch University. Team registered with SAIT, SAIPA and CIBA.
An IRP6 can be filed on time and still cost you more because the money reached SARS a day after the due date. The charge that follows is the paragraph 27 penalty, and interest runs alongside it. This guide explains how the penalty is worked out, how it differs from the other provisional tax charges, what to do once it appears on your account and when SARS can remit it.
What Is the Paragraph 27 Penalty?
The paragraph 27 penalty is a 10% charge on any provisional tax paid late for the first or second period. The SARS Guide for Provisional Tax sets it out under paragraph 27 of the Fourth Schedule to the Income Tax Act and treats it as a percentage-based penalty under Chapter 15 of the Tax Administration Act.
Which law allows SARS to charge it?
Two provisions work together. Paragraph 27 supplies the 10% rate for provisional tax. Section 213 of the Tax Administration Act requires SARS to impose a penalty equal to the prescribed percentage of the unpaid tax once it is satisfied that the tax was not paid as and when required.
Who does it apply to?
It applies to anyone registered as a provisional taxpayer, including individuals with freelance, rental, investment or business income, as well as trusts and companies. If you are unsure whether you belong in the system, read who should register for provisional tax.
Which payments does it cover?
It covers the two compulsory payments. The SARS guide limits the penalty to the first and second periods, so the voluntary third payment carries no 10% charge.
How Much Is the Penalty on a Late IRP6 Payment?
The penalty is 10% of the amount that was paid late, not 10% of your annual tax bill. Section 213 ties the charge to the amount of unpaid tax, so only the late portion counts.
What does this look like in rand?
As a worked example, take a second period IRP6 showing R60,000 payable. You pay R45,000 by the due date and the remaining R15,000 a week later. The penalty is 10% of R15,000, which is R1,500. Interest on the R15,000 is charged on top.
Does the penalty grow the longer I wait?
No. The percentage does not increase with each day or month, which is different from the monthly penalty for an outstanding ITR12 under the section 211 table. Interest is the part that keeps running until the amount is paid.
Can the penalty change after it is imposed?
Yes. Section 213(2) states that if the amount of tax behind the penalty changes, the penalty must be adjusted from the date it was imposed. The result follows the corrected tax figure.
When Does a Provisional Tax Payment Count as Late?
A provisional tax payment is late when the money reaches the SARS bank account after the due date. The SARS penalty remission page states that SARS recognises a payment only once it is received into its bank account, whichever day you instructed your bank.
What are the due dates?
For a February year end, the first payment is due six months into the year of assessment, on 31 August, and the second at the end of the year of assessment. The second IRP6 payment guide covers the February 2027 period in detail.
What if the due date falls on a weekend?
The payment must be received on the last working day before it. SARS says a payment due on a Saturday, Sunday or public holiday must be received by the Friday or the day before the public holiday. 28 February 2027 is a Sunday, so the second payment for the 2027 year of assessment must reach SARS by Friday 26 February 2027.
Do bank cut-off times matter?
Yes. SARS tells taxpayers to pay before the cut-off time of the bank product they use so that the funds reflect in time. A transfer captured on the due date after that cut-off can land the next business day, and that payment is late.
How Is Paragraph 27 Different From the Underestimation Penalty?
Paragraph 27 tests when you paid, and the underestimation penalty tests how accurate your estimate was. You can pay on time and still face the second, or estimate accurately and still face the first. Our guide to the paragraph 20 underestimation penalty covers that test.
- Paragraph 27 penalty: Basis: 10% of the late amount; Applies to: First and second periods
- Section 89bis interest: Basis: Prescribed rate; Applies to: Late payments, all periods
- Paragraph 20 penalty: Basis: Estimate too low; Applies to: Second period estimate
- Section 89quat(2) interest: Basis: Prescribed rate; Applies to: Underpayment after effective date
Can both penalties apply in the same year?
Yes, and the Act prevents a full double charge for the second period. The SARS guide explains that under paragraph 20(2B) the underestimation penalty is reduced by the paragraph 27 penalty on that period. Its example takes a R2,600 underestimation penalty, subtracts a R1,000 late payment penalty and leaves R1,600.
Is the penalty for not submitting an IRP6 still charged?
No. The SARS guide records that the paragraph 20A penalty for failing to submit an estimate on time was deleted for years of assessment commencing on or after 1 March 2015. If you do not submit, the guide states that the Commissioner may estimate your taxable income and determine the amount payable.
Does Interest Apply as Well as the 10% Penalty?
Yes. The SARS guide states that section 89bis interest is payable at the prescribed rate on late payments for the first, second and third periods. Section 213 adds that the penalty is in addition to any interest you are liable for, so one does not replace the other.
What is the current interest rate?
The rate on outstanding taxes is 10.50% a year from 1 September 2026, according to SARS Interest Rates Table 1. It changes when the rate under the Public Finance Management Act changes, so read the current table for the months in question.
How is section 89bis interest different from section 89quat interest?
Section 89bis interest relates to payments made after the due date. Section 89quat(2) interest applies where your normal tax for the year exceeds the credit amount, which is your provisional payments, employees' tax and allowable foreign tax credits, and an individual's taxable income exceeds R50,000. It runs from the day after the effective date, which is seven months after a February year end. Our guide to the IRP6 third payment explains how a top-up reduces it.
How Do I Fix a Late IRP6 Payment on eFiling?
Pay the outstanding amount first, then check your statement of account and, if you qualify, submit a Request for Remission. Remission of a percentage-based penalty requires that the capital amount for the period has been paid, so the payment comes before the request.
- Open the IRP6 work page. On eFiling, open the provisional tax return for the period. The SARS guide to eFiling your provisional tax return shows fields for penalty and interest on late payment on the return.
- Make the payment. Select Payments, Pay Now and Create Additional Payment. Choose Provisional Tax (PROV) as the tax type and Provisional Tax Period Payment as the type of payment. Capture your tax reference number, the tax period in CCYY/NN format and the amount.
- Request a statement of account. Use Request Statement of Account to see how SARS has allocated the payment and what penalty and interest it has charged.
- Submit the RFR01. Under Returns, open Dispute\Suspension of Payment and select New. Choose the tax type and period, then capture the Request for Remission on form RFR01 with your reasons and supporting documents.
- Follow the outcome. If SARS disallows or partly allows the request, the next step is a Notice of Objection, followed by a Notice of Appeal.
What happens to the penalty on the second period IRP6?
An unpaid first period penalty carries forward. The eFiling guide lists penalty outstanding from the first period and interest outstanding from the first period as lines on the second period return, so the amount stays visible until it is settled.
For a field-by-field walk through the return itself, see how to complete an IRP6 on eFiling.
Can SARS Remit the Paragraph 27 Penalty?
Yes, SARS can remit it when the first incidence or the amount test is met, together with reasonable grounds and payment of the tax. A separate route applies in exceptional circumstances. Both are set out in Chapter 15 of the Tax Administration Act and summarised on the SARS remission page.
What are the conditions for a first incidence remission?
Section 217(3) of the Act allows SARS to remit the penalty or part of it where all of these are met:
- The penalty relates to a first incidence of non-compliance, or it involves an amount of less than R2,000.
- Reasonable grounds for the non-compliance exist.
- The non-compliance has been remedied, which SARS describes as paying the capital amount outstanding for that period.
What counts as a first incidence?
The Act defines a first incidence as non-compliance where no penalty assessment under Chapter 15 was issued in the preceding 36 months, whether for the same or a different kind of non-compliance. A penalty assessment fully remitted under section 218 is disregarded. An administrative penalty issued in that period for an outstanding ITR12 therefore counts against you on an IRP6.
What are exceptional circumstances?
Section 218 requires SARS to remit where listed circumstances made you incapable of complying. The list covers a natural or human-made disaster, a civil disturbance or disruption in services, a serious illness or accident, serious emotional or mental distress, specified acts by SARS such as a capturing error or processing delay, serious financial hardship and anything of analogous seriousness.
What must the request contain?
SARS asks for a description of the circumstances that prevented you from complying, each period and amount, and the transaction code on the penalty assessment. The request goes through eFiling or a SARS branch.
What Are the Common Mistakes With the Paragraph 27 Penalty?
The most common mistake is treating the submission date as the payment date. Filing the return and paying the tax are separate steps, and the penalty looks at the second.
Paying to the wrong period or reference
The SARS guide states that provisional tax payments cannot be refunded or reallocated to different periods, and cannot be allocated to different taxpayers. It also requires the 19-digit payment reference number from the payment advice when paying through a bank. Check the period and reference before you release the money.
Assuming the third payment protects the first two
A top-up after the year end reduces interest on underpayment. It does not change the date on which the first and second payments fell due, so a penalty already charged on those periods stands.
Leaving the penalty unpaid
SARS may appoint an agent, such as your employer, to collect an unpaid penalty or interest. That is how a provisional tax balance can turn into an AA88 deduction on your salary. If you cannot pay in one sum, SARS accepts a request for a deferred arrangement, and section 167 of the Act allows an instalment payment agreement where its conditions are met.
Disputing before asking for remission
SARS states that the objection process cannot be used before the RFR has been submitted and considered. The SARS dispute guide sets the sequence for the paragraph 27 penalty and section 89bis interest as RFR, then objection, then appeal.
Do You Need Help With the Paragraph 27 Penalty?
If a penalty has appeared on your provisional tax account, we can read your statement, check whether the first incidence test is met and prepare the request. Our provisional tax service calculates and files your IRP6 returns, and the provisional tax guides cover the rest of the cycle. Book a call with our team to talk through your own position.
