Understanding contribution limits

What are TFSA contribution limits?

Tax-Free Savings Accounts have government-mandated limits on how much you can contribute. These limits ensure the tax benefits are used for long-term savings rather than tax avoidance.

• Annual limit: R36,000 per tax year (March to February)

• Lifetime limit: R500,000 total contributions across all your TFSAs

• Per person: Limits apply to you individually, not per account or provider

Understanding these limits is essential because exceeding them results in a 40% tax penalty on the excess amount. Fynbos tracks your contributions automatically to help you stay within the limits.

Annual contribution limit

You can contribute up to R36,000 to your Tax-Free Savings each tax year. The tax year runs from 1 March to the end of February.

Key points about the annual limit:

• The limit resets on 1 March each year

• Unused allowance does not carry over to the next year

• The limit applies across all your TFSAs combined, not per account

• Investment returns do not count towards the limit

For example, if you contribute R20,000 in one tax year, you cannot add the remaining R16,000 to next year's allowance. Each year starts fresh with a R36,000 limit.

The Contributions card on your Tax-Free Savings page shows your progress towards the annual limit, including the tax year dates and how much you can still contribute this year.

Lifetime contribution limit

Your total contributions to all Tax-Free Savings accounts cannot exceed R500,000 over your lifetime. This is the maximum you can ever contribute, regardless of how many tax years it takes.

What counts towards the lifetime limit:

• Every rand you contribute to any TFSA

• Contributions made to TFSAs at other providers

• Contributions made in previous years

What does not count:

• Investment growth (dividends, interest, capital gains)

• Returns reinvested within the account

This means your TFSA balance can grow well beyond R500,000 through investment returns without penalty. Only the money you put in counts towards the limit.

The Historical contributions section shows your total lifetime contributions across all tax years, helping you track how much of your R500,000 limit remains.

How Fynbos tracks your contributions

Fynbos automatically tracks every contribution you make to your Tax-Free Savings account. Your Contributions card shows:

• Current year contributions: Total contributed this tax year

• Remaining allowance: How much you can still contribute this year

• Fynbos contributions: Money invested through Fynbos

• External contributions: Amounts you have contributed elsewhere

Tracking contributions made elsewhere:

If you have a TFSA at another provider, you should record those contributions in Fynbos to get an accurate picture of your limits.

1. Navigate to Tax-free investments

2. Tap the menu icon (three dots) in the Contributions card

3. Select Add external contributions

4. Enter the amount contributed elsewhere

5. Select the tax year for the contribution

6. Tap Continue

Recording external contributions helps Fynbos prevent you from accidentally exceeding your limits when transferring money.

What happens if you over-contribute

Exceeding your contribution limits results in a 40% tax penalty on the excess amount. This penalty is imposed by SARS and added to your annual tax assessment.

Example: If you contribute R40,000 in a tax year (R4,000 over the limit):

• Excess amount: R4,000

• Penalty: R4,000 x 40% = R1,600 payable to SARS

How SARS monitors contributions: Financial institutions report all TFSA contributions to SARS. Even if you have accounts at multiple providers, SARS aggregates your total contributions to check against the limits.

Important: Fynbos prevents over-contributions by checking your remaining allowance before processing transfers. If a transfer would exceed your limit, it will be blocked with an explanation.

Withdrawals and re-contributions:

If you withdraw money from your TFSA and later contribute it back, the new contribution counts towards your limits. There is no special treatment for replacing withdrawn funds. Contributing back the same amount you withdrew could push you over your annual limit.

Viewing your contribution history

Fynbos keeps a complete record of your contributions organised by tax year. This history helps you understand your lifetime limit usage and plan future contributions.

1. Navigate to Tax-free investments

2. Scroll to the Historical contributions card

3. Tap any year to expand the details

Each year shows:

• Total amount contributed

• How much was contributed through Fynbos

• How much was contributed elsewhere

Your lifetime total appears at the top of the Historical contributions card, showing your progress towards the R500,000 lifetime limit.

Tax year dates

The South African tax year for TFSA contributions runs from 1 March to the end of February the following year. Tax years are named by their end date.

When you view your contributions in Fynbos, the tax year dates are displayed on the Contributions card so you know exactly which period applies.

Planning your contributions:

• Start contributing early in March to maximise your investment time

• Do not wait until February as processing delays could push contributions into the next year

• If you have unused allowance in late February, consider contributing before month-end