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Two-pot withdrawal: the tax you'll actually pay

Since September 2024 you can take money from the savings pot of your retirement fund once a tax year. The cash is real. So is the tax, and the dent in your retirement, and most people underestimate both.

Updated 15 June 2026 · THL Property Group

The two-pot system started on 1 September 2024. Every new contribution to your retirement fund now splits in two: one third goes to a savings pot you can reach before retirement, and two thirds go to a retirement pot that stays locked until you retire. You can take from the savings pot once per tax year, with a minimum withdrawal of R2,000.

That early access is the point of the reform, and it has carried people through real emergencies. It also has two costs that the fund's withdrawal screen does not put in front of you.

The tax myth

Here is the part that catches almost everyone. A savings-pot withdrawal has no tax-free portion. Not the first rand.

SARS adds the full amount to your taxable income for the year and taxes it at your marginal rate, the rate that applies to your top rand of earnings. Many people expect a tax-free slice, the way an old resignation withdrawal used to give one. The two-pot savings withdrawal does not work like that. It is taxed from the first rand, at your own rate.

What a R30,000 withdrawal really costs

The same R30,000 leaves very different amounts in your hand, depending on what you already earn:

At R180,000 a year you sit in the 18% bracket, so the withdrawal costs R5,400. At R600,000 it is 36%, or R10,800. The R360,000 earner is the one to watch: the withdrawal pushes part of itself over the R383,100 bracket line into the 31% band, so the R8,145 bill works out to about 27% of the cash, more than the 26% their salary alone attracts. A large enough withdrawal lifts your tax rate for the whole year.

Your fund deducts the tax before you see anything. SARS issues a tax directive, the fund pays SARS first, and the balance lands in your account. Any SARS debt from a past year is settled out of the same directive, so the payout can come in smaller than the table suggests.

If your total income for the year stays under the tax threshold (R99,000 for under-65s in 2026/27), a withdrawal can come out tax-free, because the rebate still covers you. That is the one real exception, and it is the reverse of what most people assume.

The cost you cannot see

The tax is the visible cost. The quiet one is bigger.

Money in the savings pot is invested and growing. Take R30,000 out at 35 and you do not lose R30,000. You lose what that R30,000 would have grown into by the time you retire. At a 9% return over 25 years, it would have reached about R258,692. The withdrawal swaps roughly a quarter of a million rand at 60 for about twenty thousand rand today.

Sometimes that swap is worth it. Clearing a credit card running at 24%, covering a real medical bill, or keeping your household afloat through a retrenchment can beat a projected return, because the alternative is worse. A phone upgrade or a holiday does not come close.

Before you withdraw

• Work out the actual tax, not a guess. The withdrawal screen shows the gross figure, never the tax or the retirement cost.
• Check what rate it lands at, and whether it tips you into a higher bracket for the year.
• Weigh the net cash against the future value you are giving up, and against whatever the money is actually solving.

The savings pot earns its keep in the year a genuine emergency arrives. Used that way, the maths usually holds. Used as a bonus account, you are paying your highest tax rate to take money from your sixty-year-old self.

Put your own figures into the Two-Pot Withdrawal calculator to see the tax, the net cash and the retirement value you would forgo, side by side.

Money Cat is an information tool, not financial or tax advice. Figures use the 2026/27 tax tables for a taxpayer under 65. Your fund, your other income and any SARS arrears change the result. Confirm with your fund or a registered tax practitioner before you withdraw.