From a financial perspective, leaving South Africa to work in another country (whether permanently, on a time-specific contract, or on employment secondment) is more complicated than you might think. Like many South Africans working overseas, you may not understand your tax position clearly.

Simply relocating from SA does not, on its own, terminate your South African tax obligations. Here’s what you need to know about your tax position if you’re working overseas – whether you plan to return to SA or not.

Do South Africans working overseas pay tax back home?

If you are a South African tax resident, either by way of being ordinarily resident or by way of physical presence, you are liable to pay tax in SA. The concept of ‘ordinarily resident’ is not a legal definition, and the South African Revenue Service (SARS) will determine if it applies on a case-by-case basis when deciding your tax liability. You can also become a tax resident by living physically in SA.

Even if you’re working in a foreign country to which you’re emigrating, your South African tax status doesn’t change automatically – you are considered ordinarily resident in SA (and thus liable for South African taxes) until you complete the SARS procedure to cease being a South African tax resident. Once you cease being a tax resident, SARS will no longer tax your worldwide income (including income and assets in your new country) – SARS will only tax you on South African-sourced income.

If you remain a South African tax resident when you’re out in the world working – whether you’re earning dollars, euros, or pounds – you’ll have to pay tax on this income. However, if you’ve already paid tax on your foreign salary in that country, you’ll need to use Section 6 of the South African Income Tax Act to claim relief from double tax. You’ll need to provide proof of tax payments in the foreign country when submitting your tax return and uploading your documents to SARS. Provided you meet certain requirements, this foreign tax credit prevents you being taxed twice in different countries on the same employment income. 

There is some more good news. Section 10(1)(o) of the Income Tax Act offers a list of conditions under which income earned outside SA (or a portion of it) is exempt from income tax. This exemption has been capped at R1.25 million a year from 1 March 2020.

The first condition under Section 10(1)(o) applies if you are a South African tax resident who is an employee and renders services outside SA on behalf of an employer (South African or foreign) for longer than 183 full days in any 12-month period, with a continuous period outside SA exceeding 60 full days in the same 12 months. If you qualify, you are exempt from tax on the first R1.25 million of income relating to services rendered abroad. However, this does not apply to independent contractors.

Recent amendments to tax laws regarding overseas employment

SARS recently tightened up existing legislation on taxation of overseas employment. If you’ve emigrated or have been seconded for an extended period outside SA, and are intending to return, you should have either continued to pay South African tax or changed your tax residency status when you left. If you did neither because you believed leaving the country relieved you of your tax obligations, you’re wrong.

Since 30 June 2025, SARS has updated its official notice of non-resident tax status to include not just the date you ceased to be a South African tax resident, but also the legal basis for that change, as well as introducing a formal mechanism to declare the reinstatement of South African tax residency. This means that if you return to SA after a period of non-residency, you must now inform SARS, specifying the effective date of your return, via the relevant form on eFiling.

If you haven’t done so yet, you should, because these new processes allow SARS to track non-compliance on back taxes as well. If you have not complied with the updated SARS processes mentioned above, SARS could treat the entire period when you were living and working outside SA as continued residency. They could issue backdated assessments for foreign income that you earned while abroad and impose penalties and interest for non-disclosure.

Many of these tax residency processes can be complicated to navigate, and you need to submit the correct documents through the right channels if you want changes in your tax status to be handled smoothly. You might find it safer and easier to rely on expert tax advice from a financial adviser.