Do You Pay Tax on Lottery Winnings in South Africa?

The short answer: if you win the South African National Lottery, you don't pay tax on the prize. A R100 million PowerBall jackpot is paid in full. But tax doesn't disappear entirely — it can apply to winnings from abroad, and to what your money does once it's in the bank.

This is general information, not tax advice. For a large win, speak to a registered tax practitioner.

Why National Lottery prizes are tax-free

South Africa doesn't treat a lottery prize as income for an ordinary player — it's a windfall, treated as capital. And the Income Tax Act then disregards capital gains from gambling, games and competitions that are authorised and run under South African law. SARS gives the National Lottery as its example of what's covered (paragraph 60 of the Eighth Schedule).

So PowerBall, PowerBall Plus, Lotto, Lotto Plus 1 and 2, and Daily Lotto prizes are all tax-free for individuals, whatever their size.

Two exceptions to know about:

• Companies, close corporations and trusts don't get this exclusion. It applies to individuals.
• Professional gamblers, whose gambling is effectively a business, can be taxed on winnings as income.

Winning a foreign lottery

This is where many people get caught out. The exclusion only covers gambling authorised in South Africa. SARS's own guidance says gains from foreign lotteries, games and competitions are subject to capital gains tax, and uses UK Lotto winnings as its example.

For a South African resident individual, that means:

• 40% of the gain is included in your taxable income, which gives a maximum effective rate of 18%;
• the cost of your ticket counts as your base cost;
• the annual capital gains exclusion (R50,000 from 2 March 2026) applies first.

The same thinking would apply if you win a big overseas game such as US Powerball or EuroMillions through an online service. The country where the lottery is run may also tax the prize. If you win abroad, declare it and get professional advice.

Tax on what your winnings earn

Once the prize is in your account, the money it earns is taxed like anyone else's:

• Interest is taxable. The first R23,800 a year is exempt if you're under 65, or R34,500 if you're 65 or older (2026/27).
• Dividends from shares you buy with the money are subject to dividends tax.
• Growth on investments is subject to capital gains tax when you sell.

Giving money away

Sharing a win with family is common, but gifts can trigger donations tax:

• 20% on donations up to R30 million in total, and 25% above that;
• individuals can give away up to R150,000 a year tax-free (from 2 March 2026);
• gifts to your spouse are exempt.

A large win also grows your estate. Estate duty is charged at 20% on the first R30 million and 25% above that, after a R3.5 million deduction.

Didn't South Africa plan a tax on lottery wins?

Yes. In the 2011 Budget the government proposed a 15% tax on gambling winnings over R25,000, including National Lottery prizes. It was shelved and never implemented. More recent proposals target gambling operators' revenue, not players' winnings.

Next steps

Check your numbers on our SA PowerBall and SA Lotto results pages, then see how to claim a lottery prize in South Africa.

You must be 18 or older to play. Play responsibly.