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Prize calculator for South African winners

Reviewed

Example

An advertised US$500 million jackpot, taken as cash (≈46%) in a state with no lottery tax, is about US$230 million gross. With the standard 30% federal withholding that leaves about US$161 million; if treaty relief applies in full, the federal part can be reclaimed.[1]

1Calculator

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An estimate for information only. It does not include South African tax and is not tax advice.

2How it works

  1. Gross: the cash option is a percentage of the advertised jackpot, published by the lottery for each draw (usually 45–50%). For the annuity, the first payment is roughly the jackpot divided by 30; later payments grow 5% a year.
  2. Federal withholding: 30% for non-residents under IRS Publication 515; treaty relief may reduce it.[1]
  3. State tax: depends on the state where the ticket was sold, not on where you live.[2]
  4. Rand: today's USD/ZAR rate from open.er-api.com, with an approximate rate if offline.

3Frequently asked questions

Why is the cash option so much smaller than the advertised jackpot?

The advertised jackpot is the total of an annuity: one payment now and 29 yearly payments growing 5% a year. The cash option is the money that funds that annuity today, usually 45–50% of the advertised amount.

How much does the US withhold from a South African winner?

Normally 30% of the prize as federal withholding for non-residents. South Africa has a tax treaty with the US, and residents may be able to reclaim this on gambling winnings by filing a US non-resident return. Get professional advice.

Which states do not tax lottery prizes?

California, Florida, Texas, Washington, South Dakota, Tennessee, Wyoming and New Hampshire do not tax lottery winnings. Elsewhere state tax can reach around 11%.

Does the calculator include South African tax?

No. How SARS treats a foreign lottery prize depends on your circumstances. Use the result as a guide and speak to a registered tax practitioner.

Sources

  1. IRS. Publication 515, "Withholding of Tax on Nonresident Aliens and Foreign Entities": 30% withholding and treaty exemptions. irs.gov
  2. Powerball. "FAQs": draw time, non-resident purchases and claiming prizes. powerball.com