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    How to make a two-pot savings withdrawal

    By TMP Team · Updated

    Quick answer

    Apply to your retirement fund, not to SARS. You can withdraw from your savings pot once every tax year, at least R2 000 at a time, and you must be registered for tax. Your fund asks SARS for a tax directive, and the payout is taxed at your marginal rate, with any tax you owe SARS taken off first.

    An older person's hand dropping a coin into a yellow piggy bank, next to small stacks of coins on a wooden table

    Ways to do this

    Official channels only. We don't run any of them.

    Since 1 September 2024, retirement funds in South Africa split your retirement savings into parts, often called pots. You can take money from one of them, the savings pot, while you still work and belong to the fund. You don’t have to resign.

    How the two-pot system works

    Part of your savings What goes in When you can take it
    Savings component (the savings pot) From 1 September 2024, one-third of your contributions, plus a once-off amount your fund moved from your older savings when the system started Once every tax year, before you retire
    Retirement component From 1 September 2024, two-thirds of your contributions Only at retirement, usually as a pension. If you leave the fund before then, it must go to another fund
    Vested component What you saved before 1 September 2024, and its growth Under the old rules. For example, when you resign you can still take it in cash or transfer it

    Your fund can tell you how much is in each part.

    Who can make a savings withdrawal

    The two-pot system covers members of pension funds, provident funds, preservation funds and retirement annuity funds, in the private and the public sector. Government employees who belong to the Government Employees Pension Fund (GEPF) are included.

    It doesn’t apply to:

    • pensioners who already receive a pension from the fund
    • older retirement annuity policies that the Financial Sector Conduct Authority (FSCA) has exempted
    • members of a provident fund who were 55 or older on 1 March 2021, unless they chose to join the two-pot system. National Treasury says that choice can’t be reversed.
    • funds with no active members, such as a fund being wound up

    The rules for a withdrawal

    • Once every tax year. The tax year runs from 1 March to the end of February. If you have more than one contract in the same fund, you may make one withdrawal a year from each contract.
    • At least R2 000. The minimum applies before the fund’s charges. There is no maximum: you can take up to everything in your savings pot.
    • Fund charges. Your fund may charge for a withdrawal. Ask what it charges before you apply.
    • No need to withdraw. What you leave in the savings pot keeps growing. When you retire, you can take what is left in cash.
    • Final once it reaches SARS. SARS says you can’t cancel a withdrawal once your fund has sent the tax directive request to SARS.

    Before you apply: sort out your tax

    SARS has to issue a tax directive before your fund can pay you, and it checks your tax record first.

    1. Check that you are registered for tax. SARS won’t issue a directive without a tax number. Find yours on the SARS Online Query System, on SARS WhatsApp at 0800 11 7277 or by dialling *134*7277#. If you don’t have one, see how to get a SARS tax number.
    2. Submit any outstanding tax returns. SARS won’t issue a directive while you have returns outstanding. You can check on eFiling, the SARS Online Query System or *134*7277#.
    3. Check whether you owe SARS. SARS takes any tax debt from your payout first, unless you have a payment arrangement with SARS. A garnishee order on your salary is not a payment arrangement. Ask for a statement of account on eFiling, the SARS MobiApp or *134*7277#.
    4. Give your fund the same details SARS has. Your names, ID or passport number and tax number must match, or SARS can reject the directive.
    5. Estimate your payout. SARS’s two-pot calculator shows roughly what you could get after tax. It is also on eFiling, the SARS MobiApp and SARS WhatsApp.

    How to apply

    1. Apply to your retirement fund. National Treasury says members apply to their own fund, and each fund explains its process. If you don’t know which fund you belong to, ask your employer’s payroll or HR office, or check your benefit statement. GEPF members apply to the GEPF: see its two-pot page.
    2. Choose the amount. It must be at least R2 000 and no more than the balance of your savings pot.
    3. Your fund asks SARS for a tax directive. The directive tells the fund how much tax to keep back and whether to pay a tax debt over to SARS.
    4. Follow up if you want to. You can see whether SARS has processed the directive on SARS eFiling.
    5. Your fund pays you the amount less the tax, any SARS debt and its charges.

    How the withdrawal is taxed

    You didn’t pay tax on the money you put into the fund, so you pay tax when you take it out.

    • SARS works out the tax like the tax on a bonus: the withdrawal is added to your income for the year and taxed at your marginal rate. SARS doesn’t use the retirement tax rates or any tax-free amount for it.
    • If your income is low, SARS may decide that no tax is due on the withdrawal.
    • SARS can only work out your exact tax for the year when it assesses your tax return, so the tax on your withdrawal is SARS’s best estimate. See who must file a tax return.

    SARS publishes the income tax rates for each tax year on its rates of tax for individuals page.

    Think before you withdraw

    National Treasury advises members to use the savings pot sparingly:

    • Money you take out now, and the growth it would have earned, won’t be there when you retire.
    • If you leave the money in the savings pot until you retire, it attracts less tax.
    • Don’t let anyone pressure you into a withdrawal. If you aren’t sure, ask your fund or an accredited financial adviser.

    If you are taking money out to pay debt, check what the debt costs first: our loan cost check compares a small loan’s interest and fees with the legal limits. If you have lost your job, see whether you can claim UIF.

    Common problems

    SARS rejected the tax directive

    SARS rejects a directive if you aren’t registered for tax, if you have outstanding returns, or if the details your fund sent don’t match SARS’s records. Fix the problem with SARS first, then ask your fund what to do next.

    The payout is less than you expected

    Tax, any SARS debt and the fund’s charges come off the amount you asked for. If SARS took a debt you have already arranged to pay, contact SARS with your payment arrangement details.

    You want to cancel the withdrawal

    You can’t once your fund has sent the directive request to SARS. Before that, ask your fund.

    You left your job

    National Treasury says you can still take money from your savings pot after you resign. The retirement pot can’t be paid out in cash and must be transferred to another fund. The vested pot follows the old rules. If you think an old fund from a previous job still owes you money, see how to find unclaimed pension money.

    Stay safe

    • Only your retirement fund can pay a savings withdrawal. Apply directly to your fund. Get its contact details from your employer or from a statement the fund sent you, not from an SMS, an email or a social media post.
    • Don’t pay anyone to apply for you, and never share your fund login, passwords or one-time PINs.
    • If a message asks you to change or confirm your banking details for a withdrawal, call your fund on its official number before you act.

    Next step

    How to get or find your SARS tax number

    General information, not financial advice. Check fees and rules with the provider. Terms and disclaimer.