How the projection works
The calculator runs month by month. Each month the balance earns one twelfth of the yearly return, compounded, and your debit order is added at the end of the month. Every projection year is a SARS tax year from 1 March to the end of February, because that is the period the annual limit applies to. Once a year's contributions reach R46,000, or your total contributions reach R500,000, further payments are left out so the result never includes money that would be penalised. The growth maths is the same as our compound interest calculator, which is the better tool for savings outside a TFSA.
TFSA limits for 2026/27
| Annual contribution limit | R46,000 per tax year (R36,000 before 1 March 2026) |
|---|---|
| Lifetime contribution limit | R500,000 |
| Tax on contributions over either limit | 40% of the excess |
| Unused annual allowance | Forfeited, not carried forward |
| Withdrawals | Tax-free, but the allowance used is not restored |
| Tax on returns inside the account | None: no income tax, dividends tax or CGT |
At the full annual amount it takes 10 years 11 months of contributions to reach the lifetime limit. Under the old R36,000 limit it took 13.9 years.
Worked example: maxing out the allowance
Naledi opens a TFSA in March 2026 and sets a debit order of R3,833.33 a month, the most that stays inside the annual limit. She invests in an equity unit trust and assumes 10% a year after fees.
- She reaches the lifetime limit in year 11, month 11, having paid in R500,000.
- At the end of that tax year the account is worth R909,614.
- With no further contributions, it grows to R3,667,330 by the end of year 25.
Of that final balance, R3,167,330 is growth that will never be taxed, whether she withdraws it as a lump sum or a little at a time.
How long to reach the lifetime limit
Starting from nothing, with returns at the 9% set in the calculator:
| Monthly debit order | Time to pay in R500,000 | Balance at the end of that tax year |
|---|---|---|
| R1,000.00 | 41 years 8 months | R5,622,938 |
| R1,500.00 | 27 years 10 months | R2,258,429 |
| R2,000.00 | 20 years 10 months | R1,482,079 |
| R3,000.00 | 13 years 11 months | R999,547 |
| R3,833.33 | 10 years 11 months | R853,321 |
Going over the limit
The 40% charge is normal tax, added to your assessment after you file. SARS's own example: contribute R50,000 in one tax year and the excess of R4,000 costs R1,600. The limit is per person, so it covers all your tax-free accounts together. Two situations deserve a check before February: holding TFSAs at two providers in the same tax year, and adding a lump sum, such as part of a bonus, while a full debit order keeps running.
Withdrawals and switching providers
You can take money out of a TFSA at any time without tax, but the contribution room you used is gone for good. If you withdraw R30,000 and later pay it back, that R30,000 counts again against your annual and lifetime limits. The same is true of returns: if you withdraw interest or dividends and reinvest them, they are a new contribution. To move to a cheaper provider, ask for a transfer between tax-free investment accounts, which has been allowed since 1 March 2018.
Choosing a return to project
A TFSA is a tax wrapper, not an investment in itself, so the return depends on what you hold inside it. SARS lists the qualifying products: fixed deposits, unit trusts, ETFs that are collective investment schemes, linked investment products and certain endowment policies from long-term insurers. They can be offered by banks, long-term insurers, unit trust managers, the National Government and a few other licensed providers. A fixed deposit TFSA will track interest rates, so use a rate close to what the bank quotes. For an equity unit trust or ETF held for 15 years or more, a higher long-run assumption is reasonable, but run the calculator at a lower rate as well. Enter the return after the provider's fees, because fees compound against you in the same way that growth compounds for you.
What a TFSA saves you
Outside a TFSA, interest above the annual exemption is taxed at your marginal rate, local dividends lose 20% to dividends tax, and gains above the annual exclusion are subject to CGT. Inside a TFSA none of these apply. The dividends tax calculator shows what 20% costs on a dividend-paying portfolio. A TFSA does not give you a deduction for contributions, unlike a retirement annuity; the retirement calculator is the place to model that.
Frequently asked questions
What is the TFSA limit for 2026/27?
R46,000 a tax year from 1 March 2026, up from R36,000, and R500,000 over your lifetime. The limits apply per person across all your tax-free accounts together, not per account or per provider.
What happens if I contribute more than R46,000 in a year?
SARS adds a 40% tax on the excess to your assessment. Put R50,000 in during one tax year and the excess is R4,000, so you pay R1,600. The same applies to anything above the R500,000 lifetime limit.
Can I carry over unused TFSA allowance?
No. Any part of the annual limit you do not use by the end of February is forfeited. If you only contributed R20,000 this tax year, you cannot put R72,000 in next year; the limit is still R46,000.
If I withdraw money, can I put it back?
You can, but it counts as a new contribution against both the annual and the lifetime limit. Withdrawals are tax-free, but they do not give you back the allowance you used. That is the main reason to keep a TFSA for long-term money rather than an emergency fund.
Does growth count towards the R500,000 lifetime limit?
No. Only the money you pay in counts. Interest, dividends and capital growth that stay in the account are not contributions, so the balance can grow well beyond R500,000. In the worked example the account is worth R3,667,330 after 25 years on R500,000 of contributions.
Can I open a tax-free savings account for my child?
Yes. A parent can invest on behalf of a minor child, and those contributions use up the child's own annual and lifetime limits. Money paid in while they are young therefore reduces what they can contribute as adults.
Can I move my TFSA to another provider?
Yes. Transfers between tax-free investment accounts have been allowed since 1 March 2018. Ask the new provider to arrange a transfer instead of withdrawing and paying in again, because a withdrawal followed by a deposit is treated as a new contribution.