The end of February is not just a date on the calendar; for the South African business community, it is the finish line of the financial year. While most people are focused on the final weeks of summer, smart directors and individuals are looking at their spreadsheets.
In the world of tax, what you don’t know won’t just hurt you; it will cost you. Between Provisional Tax, FICA Compliance, and the looming SARS Deadlines 2026, there is a lot of noise to filter through.
At TFS Holdings, we don’t believe in overcomplicating the inevitable. Here is the straight-talking breakdown of your February obligations and how to navigate them without the usual year-end panic.
1. The Big One: Second Provisional Tax Payment
If you earn income other than a standard salary (remuneration), you are likely a provisional taxpayer. By 28 February 2026, your second provisional tax payment is due.
What you need to know: This isn’t a “guesstimate.” SARS requires a realistic projection of your total taxable income for the year (1 March 2025 to 28 February 2026).
- The Risk: If your estimate is too low (less than 80% or 90% of your actual taxable income, depending on your bracket), SARS will levy an under-estimation penalty.
- The Strategy: We calculate based on year-to-date performance plus a realistic forecast for the final weeks. Accuracy now prevents a massive, non-deductible penalty later.
2. VAT Management: Closing the Gap
For businesses registered for Value Added Tax, the end of the financial year often coincides with a VAT period.
- Reconciliation is Key: Ensure your output tax (what you charged) and input tax (what you spent) are reconciled against your ledger before the year closes.
- The TFS Tip: Don’t leave your February VAT filing to the last minute. Year-end adjustments often uncover missed invoices or errors that are much easier to fix before the books are officially closed.
3. EMP501 and Payroll Clean-Up
While the final employer reconciliation (EMP501) usually happens later, February is the final month to ensure your PAYE, UIF, and SDL contributions are perfectly aligned.
- Check your payroll records for the full 12-month cycle.
- Ensure that any fringe benefits or bonuses paid during the year have been correctly taxed.
- A clean February payroll makes the upcoming tax season a non-event rather than a crisis.
4. FICA Compliance: The Silent Red Flag
Financial Year End is the best time to audit your FICA Compliance. With South Africa’s grey-listing status keeping regulators on high alert, financial institutions and SARS are more stringent than ever regarding “Know Your Customer” (KYC) documentation.
Note: If your business structure has changed—new directors, new trustees, or a change in shareholding—your FICA profiles must be updated immediately. Ignoring this can lead to frozen bank accounts and halted transactions.
5. Why the Feb-Rush Happens (And How to Avoid It)
Most businesses fail their year-end because they treat it as an administrative task rather than a strategic one. Financial Year End is your opportunity to assess the health of your enterprise.
- Write off bad debts: Do this before 28 February to ensure you aren’t paying tax on money you’ll never see.
- Stock-takes: Conduct a physical count. Discrepancies between your system and your warehouse are tax-deductible losses if handled correctly.
The TFS Perspective: Complexity is a Choice
The “noise” surrounding tax deadlines usually comes from a lack of preparation. SARS isn’t looking to catch you out; they are looking for compliance. When you have a mentor who has already read the rulebook, these deadlines become simple checkboxes rather than existential threats.
Your Year-End Checklist:
- Submit the IRP6 return and pay the second provisional tax instalment.
- Reconcile VAT and ensure all input claims are valid.
- Review B-BBEE spend to ensure your certificates remain valid for the new year.
- Update FICA and Statutory records.
Stop treating the end of February like a surprise. It happens every year. The difference between a stressful year-end and a strategic one is the partner you have in your corner.
Simplify Your Year-End
Contact TFS Holdings today to ensure your Provisional Tax and Compliance are handled with precision.