Primary briefing · Gazette
high impact 54750 · R. 314 of 2026 · 2026-05-27
SMME classification reset: Final regulations set new employee and turnover thresholds across eleven sectors
Effective from
27 May 2026
Proclamation R. 314 of 2026 brings section 8 of the National Small Enterprise Amendment Act 21 of 2024 into operation on 27 May 2026. Simultaneously, the Minister of Small Business Development publishes final regulations under section 20(20) of the National Small Enterprise Act 102 of 1996 setting updated criteria — based on total full-time equivalent paid employees and total annual turnover — for classifying enterprises as micro, small or medium across eleven sectors including agriculture, mining, manufacturing, construction, retail, wholesale, financial intermediation, and others. For example, a medium manufacturing enterprise may now have up to 250 employees and up to R350 million annual turnover. The regulations include a cautionary note for regulated industries such as the fuel industry, where up to a third of turnover may consist of taxes and mandatory government levies, requiring care when applying turnover thresholds.
Who is affected
Micro, small and medium enterprises across all sectorsIn-house counsel and commercial advisors on SMME classificationGovernment procurement participants relying on SMME statusFinancial institutions providing SMME-targeted financeIndustry bodies and associationsFirms in regulated industries (e.g. fuel) where embedded levies affect turnover calculations What this means for practitioners
Reassess enterprise classification against the new sector-specific employee-count and turnover thresholds immediately — the regulations are effective now.
Review eligibility for SMME-targeted procurement preferences, incentives, and regulatory treatment under the updated criteria.
For clients in regulated industries (particularly fuel), adjust turnover calculations to account for embedded taxes and mandatory government levies before applying thresholds.
Update internal compliance and reporting frameworks to reflect the new classification bands.