Question:
Hi. I have resigned from my company and my pension fund is sitting at 248 000. This will be my second time withdrawing from pension fund. What percentage will be taxed? And how long does the payout take. Thanks
Answer:
Thobile, You are taxed per the withdrawal lump sum tax table. The first R25 000 is not taxed, the balance to R660 000 is taxed at 18%, the balance to R990 000 at 27% and the remainder at 36%. This table is applied to the aggregate of your retirement lump sum benefits since 1 October 2007. The tax calculated in this way that relates to previous lump sums is deducted from the total tax payable to arrive at the tax payable on the current lump sum. Assuming your tax affairs are in order, a pay-out usually takes around 4-8 weeks once the fund administrator has received both your final contribution and the fully completed withdrawal forms. If you belong to an industry (bargaining council fund) then there is usually a mandatory waiting period which can be up to six months long.
