Payroll and Benefits Guide South Africa
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
|
1.00%
|
Skills Development Levy (SDL), maximum 212,544 ZAR annual cap. |
|
1.00%
|
Unemployment Insurance (UIF), maximum 212,544 ZAR annual cap. |
|
Variable
|
Workers Compensation Fund (OID) – the ratio varies based on the workers’ earnings, type and field of work, risks associated with the work. The OID annual earnings limit is R597, 328.
|
| 2.00% and up |
Total Employment Cost |
| Employee Payroll Contributions | |
|
1.00%
|
Unemployment Insurance (UIF), maximum 212,544 ZAR annual cap. |
| 1.00% |
Total Employee Cost |
| Employee Income Tax | |
|
18%
|
Up to 237,100 ZAR |
|
42,678 + 26% of taxable income above 237,100 ZAR
|
taxable income above 237,101 – 370,500 ZAR
|
|
77,362 + 31% of taxable income above 370,500 ZAR
|
taxable income above 370,501 ZAR – 512,800 ZAR
|
|
121,475 + 36% of taxable income above 512,800 ZAR
|
taxable income above 512,801 – 673,000 ZAR
|
|
179,147 + 39% of taxable income above 673,000 ZAR
|
taxable income above 673,001 – 857,900 ZAR
|
|
251,258 + 41% of taxable income above 857,900 ZAR
|
taxable income above 857,901 – 1,817,000 ZAR
|
|
644,489 + 45% of taxable income above 1,817,001 ZAR
|
taxable income above 1,817,001 ZAR
|
| Annual Tax Rebates | |
| Primary | 17,235 ZAR |
|
Secondary (Persons 65 and older)
|
9,444 ZAR |
| Tertiary (Persons 75 and older) | 3,145 ZAR |
| Age | Tax Threshold |
| Below age 65 | 95,750 ZAR |
| Age 65 to below 75 | 148,217 ZAR |
| Age 75 and over | 165,689 ZAR |
For the year 2026-27
| Taxable Income (ZAR) | Rate of Tax |
|---|---|
| R0 – R245 100 | 18% of each R1 |
| R245 101 – R383 100 | R44 118 + 26% of the amount above R245 100 |
| R383 101 – R530 200 | R79 998 + 31% of the amount above R383 100 |
| R530 201 – R695 800 | R125 599 + 36% of the amount above R530 200 |
| R695 801 – R887 000 | R185 215 + 39% of the amount above R695 800 |
| R887 001 – R1 878 600 | R259 783 + 41% of the amount above R887 000 |
| R1 878 601 and above | R666 339 + 45% of the amount above R1 878 600 |
Employer taxes
Employee taxes
Minimum Wage
General
The minimum wage in South Africa is 30.23 ZAR an hour.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In South Africa, there is no set payroll cycle. The payroll cycle is typically stipulated in the employment contract, which is to be agreed upon by the employee and employer. The payroll cycle can run monthly, weekly, or bi-weekly.
13th Salary
13th-month salary payments are customary in South Africa and should be paid in December of each year.
Working Hours
General
The standard working week in South Africa can be no longer than 45 hours a week, 9 hours per day.
Overtime
Ordinary Working Hours and Overtime Limits
-
Maximum Ordinary Hours: An employee may not work more than 45 ordinary hours in any week.
-
This is limited to 9 hours a day if the employee works 5 days or less per week, or 8 hours a day if the employee works more than 5 days per week (excluding meal intervals).
-
-
Maximum Overtime Hours: Overtime work is strictly limited to a maximum of 3 hours per day or 10 hours per week.
-
Consent Required: An employer may not require or permit an employee to work overtime except in accordance with an agreement (mutual consent between the employee and employer). The employee may refuse to work overtime without a valid agreement.
-
The Earnings Threshold: The BCEA’s limitations on working hours, overtime, and Sunday work do not apply to certain categories of employees, including senior managerial employees and employees whose annual earnings exceed a pre-determined earnings threshold (this amount is adjusted periodically by the Minister of Employment and Labour).
2. Overtime Compensation Rates
Overtime is compensated at a premium rate, which can be paid as money or as time off, by agreement.
| Day/Condition | Minimum Compensation Rate (Money) | Time Off in Lieu (Minimum) |
| Normal Overtime (Mon–Sat) | 1.5 times (Time and a half) the employee’s normal hourly wage. | 90 minutes of paid time off for every hour of overtime worked. |
| Sunday Work (Not a normal working day) | 2 times (Double) the employee’s normal hourly wage. | Not applicable; time off for Sunday work must be agreed upon. |
| Sunday Work (A normal working day) | 1.5 times (Time and a half) the employee’s normal hourly wage. | |
| Public Holiday (Voluntary) | 2 times (Double) the employee’s normal hourly wage. | Not applicable; the employee is entitled to their ordinary day’s pay plus the double rate for hours worked. |
Note on Sunday/Public Holiday Work:
-
If an employee works on a Public Holiday, they must be paid at least double their normal wage for the time worked.
-
For Sunday work, the rate is double only if the employee does not normally work on a Sunday. If the Sunday is part of the employee’s ordinary shift roster, the rate is 1.5 times the normal wage.
Leave
Annual Leave (vacation)
A full-time employee in South Africa is entitled to 21 consecutive days (15 working days) of paid annual leave; this is the minimum mandatory leave entitlement. The employee can accrue paid annual leave monthly at the rate of 1.25 days per month (1 day for every 17 days worked).
PTO carryover
In South Africa, statutory annual leave cannot be forfeited. Leave should be taken within 6 months after the end of the leave cycle, but unused leave does not automatically expire.
Note:
- For Zapeo, Leave accrued in one cycle is allowed to be used up to 6 months after the cycle or it will be forfeited
Public Holidays
When a public holiday falls on a Sunday, the following Monday shall be a public holiday in lieu.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 21 March 2026 | Saturday | Human Rights Day | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Family Day | Standard holiday |
| 27 April 2026 | Monday | Freedom Day | Standard holiday |
| 1 May 2026 | Friday | Workers’ Day | Standard holiday |
| 16 June 2026 | Tuesday | Youth Day | Standard holiday |
| 9 August 2026 | Sunday | National Women’s Day | Standard holiday |
| 10 August 2026 | Monday | Public Holiday | |
| 24 September 2026 | Thursday | Heritage Day | Standard holiday |
| 16 December 2026 | Wednesday | Day of Reconciliation | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | Day of Goodwill | Standard holiday |
Sick Days
Sick leave is paid at 100% pay of the employee’s regular salary rate and granted on a three-year cycle of 30 sick days for a 5 day working week and 36 sick days for a 6 days working week.
During the first 6 months of employment, the employee accrues only 1 day of paid sick leave for every 26 days worked. From the seventh month of employment the full entitlement is granted to the employee. Any sick leave days that were taken during the first six months of employment will be deducted from the full 3 year cycle.
Any days not used within the 3 years cycle will be lost and the days will reset under a new accrual cycle.
If the employee is absent for more than two consecutive days, they must produce a medical certificate.
Maternity Leave
A pregnant employee is entitled to 4 months of unpaid maternity leave. The leave can be taken anytime from four weeks before the due date, and the employee must not return to work until six weeks after the delivery date. This is relevant for any job role unless the employee works less than 24 hours a month.
If the employee has been contributing to UIF, they would be eligible for a maternity benefit of up to a maximum of 60.00% of the regular salary rate, depending on the level of income/insurance coverage. These maternity benefit payments are made for a maximum of 121 days.
The Employee shall notify in writing of the date of commencement of maternity leave and the date of return to work after the maternity leave at least four weeks in advance.
A recent judgment was issued by the High Court of South Africa on October 2023. The ruling stated that all parents, regardless of gender, should be entitled to four months of parental leave from their employers. This also applies to adoptive parents, specifically those adopting a child younger than two years. While this ruling is still under review, it has already been implemented by many employers.
Paternity Leave
Fathers are entitled to leave through the Parental Leave policy.
Parental Leave
New parents, including fathers, adopting parents, and surrogates, are entitled to Parental Leave of 10 consecutive calendar days, unpaid, when their children are born/given to the parent(s).
This entitlement only applies if the employee is not eligible for maternity leave, adoption leave or commissioning parental leave.
Adoption Leave
Leave of 10 consecutive weeks is in place for the adoption of a child below the age of 2. A single parent is entitled to 10 consecutive weeks’ adoption leave. If there are two adoptive parents, only one can benefit from this leave, however, the other can use the regular Parental Leave.
Commissioning Parental Leave
This leave is in place for the primary parent who will take care of the child when subject to being a commissioning parent in a surrogate motherhood agreement. The entitled length is at least 10 weeks consecutive leave. Where there are two commissioning parents, only one would be entitled to 10 consecutive weeks’ commissioning parental leave. The other parent is entitled to use the 10 consecutive calendar days’ regular Parental Leave.
All types of Parental Leaves are unpaid, however, employees can claim 66% of their earnings subject to the maximum income threshold from the Unemployment Insurance Fund (UIF). In order to qualify an employee must have at least 13 weeks continuous service.
Other Leave
Study leave: The Labour law does not specify a study leave entitlement. Each employer can decide its own policy on if to provide study leave, and if it will be paid or unpaid.
Work-related injury leave: If an employee is injured at work and takes more than 4 days of leave due to the injury, they are entitled to 75% of their regular pay for up to 3 months. After 3 months of leave, the employee must claim compensation from the compensation fund and receives 75% of their normal pay. In addition, for the first 3 months, the employer is able to request payment from the compensation fund.
Family Responsibility Leave: Workers with at least 4 months service may take up to 3 days of paid leave during each 12 monthly cycle. a year to attend to certain family responsibilities such as:
- Birth of their child
- Child sickness
- in the event of the death:
- Of their spouse or life partner
- Parent or adoptive parent
- Grandparent
- Child or adopted child
- Grandchild
- Sibling.
Employees must provide proof of the circumstances necessitating the absence in order to receive payment.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
The termination process varies according to the employment agreement or collective agreement in place and is based on the type of contract and reason for termination.
| Salary payment interval / date | Final payment on termination | Bank account/payment method requirement |
|---|---|---|
| Wages must be paid at agreed intervals (daily, weekly, fortnightly, monthly) according to contract or practice; there is no specific statutory day of the month for all employees. | On termination, the employer must pay the employee for any unpaid leave and remuneration due (see Basic Conditions of Employment Act 75 of 1997 s 40). Severance pay may apply in cases of retrenchment (s 41). | Wages must be paid in money/legal tender and the employer must provide a payslip. The law doesn’t mandate only payment via bank account in all cases — payment method is by agreement or practice. |
Notice Period
The notice period for employees can differ and is stipulated in the employment contract/collective bargaining agreement. If the notice period is not mentioned in the employment contract, the minimum required by law is dependent on the employee’s length of service as below:
- 0 – 6 months of service: 1 weeks’ notice
- 6 months – 1 year of service: 2 weeks’ notice
- 1+ years service: 4 weeks’ notice
If a longer notice period was agreed in the employment contract, it must be honored.
Severance Pay
Severance pay in South Africa is only payable in the event of a dismissal for operational requirements. In general, employees are entitled to one week’s severance pay for every year of completed service unless the employment contract has been terminated due to poor performance or misconduct; in this case, no severance payment is due.
if the termination is procedurally unfair or reinstatement is not practical, the employee might be entitled to compensation equal to up to 12 months.
Probation Period
Probation or trial periods are generally set within the employee’s employment contract; however, standard practice in South Africa is three months. It is possible to use a longer probation period provided the length is deemed reasonable given the circumstances of the job.
The duration of the probation period must be reasonable in regard to the period it is required to determine the employee’s suitability for the job. The common practice is a probation period of 3-6 months.
An employer cannot terminate the employment at the end of the probation period and will be required to follow a fair performance management process and provide the employee with reasonable guidance and training before termination their employment.
Setting Up a Business
Setting up a legal entity
New companies should register with the Companies and Intellectual Property Commission (CIPC), it can be done through the eService system (for private and non-profit companies with standard memorandum of incorporation) or manually using the forms available on http://www.cipc.co.za/.
A foreign company can only be registered manually
The steps to register a company are as follows:
- Register online as a CIPC client (you will be asked for your ID/passport number, a valid email address and a mobile phone number) after the registration is completed, the CIPC customer code will be send to your mobile phone and email address.
- Add credit to your customer code- Make a deposit into the CIPC bank account. Using your customer code as reference. The bank details may be found here. Customers are urged to only deposit funds that are required for the transaction. Bulk deposits are discouraged.
- Fill in the required forms. The compulsory forms for a foreign company are CoR 20.1, CoR20.1A, CoR21.2.
- Submit the documents to E-mail: companydocs@cipc.co.za, The following supporting documents must be included in your e-mail:
- Certified identity copy of the applicant
- Certified identity copy or passport of all incorporators, directors and representative
Power of attorney (if applicable) - All forms required
- Lodgement of a passport copy is only accepted as proof of identity for non-residents of South Africa. For South African residents a green bar-coded/ smart ID copy must be lodged. In addition, the company should register with the South African Revenue Service (SARS), Unemployment insurance Fund (UIF), Compensation fund, B-BBEE Commission (Broad-Based Black Economic Empowerment) and open a company bank account.
Registration as an employer
According to law, an employer must register with the South African Revenue Service (SARS) within 21 business days after registering as an employer and prior to employing employees.
Where an employer expects that the total salaries will be more than R500 000 over the next 12 months, that employer becomes liable to pay SDL. In this situation, the employer must register with SARS and show the jurisdiction of the Skills Education and Training Authority in South Africa (SETA) within which they must be classified. (Even though some employers are exempt from paying SDL, all employers must be registered). Where an employer is liable to pay UIF contribution, the employer must register with either SARS or the UIF office (whichever is applicable) for the payment of the contributions.
New Employee Registration
South African regulations dictate that all employers– whether part-time or full-time – must register themselves and their employees with the Compensation commissioner, the relevant SARS, and insurance companies prior to the start date of employment.
Immigration
Any foreigner who wishes to work in South Africa has several options of temporary work visas. These include general employment, inter-company transfer, highly skilled migrant, or business entrepreneur.
As South Africa has a growing economy and manufacturing sector, the country has many job opportunities for skilled workers in various positions, and foreigners are increasingly finding work in South Africa as detailed in reported critical skills lists. However, there are fewer opportunities for employment in South Africa in unskilled or semi-skilled positions.
There is also an emphasis on attracting entrepreneurs in South Africa, particularly where this will result in:
- capital being brought into South Africa from abroad
- the manufacture of goods for export
- the employment of South Africans
The various types of South African work visas depend on the applicant’s employment/financial/skills position.
Two of the most commonly requested visas are:
- Critical Skills Work Visa: The South African Department of Home Affairs periodically publishes a list of critical skills in demand by the government. Applicants who possess these skills can apply for a Critical Skills Work Visa. It is not necessary to secure employment before the visa, but the applicant must prove that they possess the essential skills. The duration of the visa is five years, though it is possible to apply for permanent residency in South Africa under some conditions.
- Corporate Visa: A Corporate Visa is granted to a corporate entity, allowing the company to hire a pre-determined number of foreign workers for three years.
VAT
General
The standard rate of VAT in South Africa is 15.00%.
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Payroll and Benefits Guide
in South Africa
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 21 March 2026 | Saturday | Human Rights Day | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Family Day | Standard holiday |
| 27 April 2026 | Monday | Freedom Day | Standard holiday |
| 1 May 2026 | Friday | Workers’ Day | Standard holiday |
| 16 June 2026 | Tuesday | Youth Day | Standard holiday |
| 9 August 2026 | Sunday | National Women’s Day | Standard holiday |
| 10 August 2026 | Monday | Public Holiday | |
| 24 September 2026 | Thursday | Heritage Day | Standard holiday |
| 16 December 2026 | Wednesday | Day of Reconciliation | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | Day of Goodwill | Standard holiday |
Hi, is employee allowed to take vacation during their notice period?
Hi Kiera, annual leave may not be taken by an employer during a notice period. Since the employee may use leftover leave during this period, the employer is required to pay the employee for the unused vacation days.
Hi good people actually what is the tax percentage must I pay when earning R14700
Up to 226,000 ZAR has an 18% tax rate applied.
Hey Team, wondering whether there is any guidance from Papaya on tax treatment of reimbursable expenses, specifically benefits like work from home allowance, wellness allowance and personal development?
Hi Paddy, thank you for your question. I will have your CSM directly contact you to assist you with this as this is something that we can give you guidance on.
is the employees UIF contribution 1% of gross salary
Yes, the employer deducts it from the employee’s gross salary.
hi if we dont get our 13th cheque what can i do
A 13th salary in South Africa is not required.
There is also the ICT Work Visa in South Africa
More can be seen at https://www.ibn.co.za/south-africa/intra-company-transfer-visas/
Can an employer change a wage pay date without consent? South Africa
An employer must disburse remuneration within 7 days after the end of the relevant pay period. If a specific pay date is specified in an employment contract or any other agreement, the employer is obligated to follow those stipulated conditions. For further guidance, we recommend consulting with local HR professionals or legal advisors.
Kudos points are encashed, please provide whether it is fully taxable or exempted to a certain maximum ceiling limit in South Africa.
Any monetary value provided to employees will be taxable. Otherwise, it depends on what form the Kudo is e.g. a gift card would be considered a fringe benefit and thus taxable.