How does the tax deductibility on retirement fund contributions work for me?

From 1 March 2016, you can get a total tax deduction on contributions to all types of retirement funds of up to 27.5% of your salary (or taxable income).  The same tax rules apply to pension funds, provident funds and retirement annuities.

You may contribute more than 27.5% of your salary to your retirement savings, but you can only claim a tax deduction up to the maximum of 27.5% of your salary and limited to a maximum tax deduction of R350 000 per year.

If your contributions exceed 27.5% and/or R350 000 in a tax year, you will be able to claim the balance (which you couldn’t claim in the current year) the following year(s). Any balance remaining when you retire or withdraw from service may be taken as a tax-free lump sum or be deducted from the tax payable on your annuity (pension).