South African workforces devote one-third of salary and time to TAX 

The Free Market Foundation (FMF) has revealed some sobering statistics about South African workforces and their tax burden in 2025 …

May 21, 2025 - 06:00
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South African workforces devote one-third of salary and time to TAX 

South African workforces are being completely buried by their tax obligations in 2025. Even with the National Treasury’s VAT increases successfully sidestepped in the High Court, South African workforces are still under the pump.

This is according to the Free Market Foundation (FMF), which recently released some sobering statistics as part of unofficial ‘Tax Freedom Day.’ The day it marked for this campaign was Friday 16 May 2025. And for very good reason …

SOUTH AFRICAN WORKFORCES ARE BURIED

South African workforces
Thanks to this man and his department, 136 days of your year are devoted to their inconsequential government spending. Image: File

The FMF says 37% of South African workforces’ time and money goes towards government taxes. That equates to 136 days given purely to fulfilling tax obligations and government spending. And that is why Friday 16 May is unofficial ‘Tax Freedom Day’ in South Africa.

You have effectively worked the whole year so far just to fund government spending. And you only start earning money for yourself from this week (19 May 2025) onwards. The FMF calculates this amount by adding up taxes like VAT, PAYE, fuel levies, and all other forms of indirect taxation … including inflation.

DEBT REPAYMENT AND SOCIAL GRANTS

South African workforces
The Finance Minister’s entire premise for increasing VAT was to fund increasing SASSA grants. But what now with Budget 3.0? Image: File

Moreover, by taking government’s total expenditure as a percentage of the country’s economic output (GDP), and multiplying it by 365 days, you get a brilliant illustration of the total tax burden facing South African workforces. The two highest spends of government budget currently are debt financing of deficits and social welfare grants.

“Effectively, every Rand you earn until mid-May goes to taxes, before you can spend it on your family, home, or hopes and dreams. Taxes don’t just take money away, they shrink opportunities. Taxing earnings and buying reduces jobs and drives up prices, hitting South African workforces hardest,” says FMF Senior Associate Professor Richard Grant.

TRACKED FOR 40 YEARS

South African workforces
Planning for retirement is harder than before, because South Africans are poorer than they were in 1995. Image: File

Fascinatingly, the FMF has tracked ‘Tax Freedom Day’ for four decades. And it is occurring later each year. For example, in 1995, if fell on 23 April, significantly earlier than the 16 May of this year. This equates, in tax burden terms, to a jump from 30% in 1995 to 37% in 2025.

“Higher tax means less money for South African workforces. And our tax burden is already among the highest for a developing country. Meanwhile, economic growth is slowing and many feel they’re getting little in return for their efforts. For four-and-a-half months’ work we do for the state – and trillions of Rands handed over without question – what do we have to show for it?” Grant questioned.

CAN YOU BELIEVE MORE THAN A THIRD OF YOUR YEAR GOES TO TAX?

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