Banking, Money and Taxes in South Africa

South Africa's banking system is sophisticated, making it easy and convenient to handle your banking, money, and taxes in the country. There are numerous international and local banks in South Africa, and each of these offer expats various options and competitive rates for managing their finances.

Money in South Africa

The currency in South Africa is the South African Rand, abbreviated as ZAR or R. The rand is subdivided into 100 cents.

• Notes: ZAR 10, ZAR 20, ZAR 50, ZAR 100 and ZAR 200 
• Coins: 5c, 10c, 20c, 50c, ZAR 1, ZAR 2 and ZAR 5 

Retail stores will happily give customers whatever change they need and happily take payment in the form of a debit or credit card. Street hawkers and small corner stores, on the other hand, might struggle to break large notes and may not have card machines.

Banking in South Africa

The four major banks in South Africa are Absa, First National Bank (FNB), Standard Bank and Nedbank. Although branches in airports often have extended hours, banks are typically open from 8.30am to 3.30pm Monday to Friday, closing at 11am on Saturdays. All four major banks have excellent online and mobile banking systems for customers' day-to-day banking needs. 

Opening a bank account

Opening a bank account in South Africa as an expat is quite a bureaucratic process. Requirements differ from one bank to the next, and it's often difficult to get clear information from the bank's website alone. Generally speaking, you will need your passport and a valid work permit to open a South African bank account. In some cases, they will also require a letter from your employer as proof of income.

Some expats opt to open an international bank account before relocating to South Africa. Although these may incur various charges, they do allow them to carry out their basic banking until they can get a South African bank account. 

If your existing bank from back home has a large international presence, it should be fairly easy to make the necessary arrangements. Some banks with an international presence, such as Investec and Old Mutual, are actually based in South Africa.

Foreign citizens may wish to consult with their bank about offshore account options. Many expats choose to keep a bank account open at home for mortgages and other bills, open another account in South Africa for living expenses, and open a third offshore account for savings and financial security.

ATMs

Although certain banks may be lacking in smaller towns, ATMs are plentiful throughout the country and all the main banks have their own ATMs. Customers can use any ATM no matter which bank they belong to, but fees will be slightly higher for withdrawals from other banks' ATMs.

The four main banks also provide facilities to make bill payments or to purchase airtime for their cellphones at their ATMs, and certain machines also accept cash deposits.

Taxes in South Africa

Your tax residency status will largely determine your tax obligations in South Africa. Those who are not residents for tax purposes are taxed on their South African income only. Residents for tax purposes are taxed on their worldwide income, but there are double-taxation agreements in place with some countries.

Expats are categorised as resident for tax purposes if they have been in South Africa for any of the following periods:

• 91 days or more in total during the year of assessment
• 91 days or more in each of the preceding five years
• 915 days or more in total during the preceding five years of assessment

Income tax rates in South Africa range from 18 percent to 45 percent on a progressive sliding scale. For the latest advice, consult a tax specialist who is well-versed in expat tax matters. 

Useful links

• South African Revenue Services (SARS)