South Africa Payroll Guide
HR & Payroll in South Africa
Good to know
- Local Currency: South African Rand (ZAR)
- Minimum Salary: The minimum hourly wage has been increased to R 27,58 in 2024.
- Salary Calculation: gross to net
- Legal Working Hours: working hours must not exceed 45 hours per week.
- Paid Leave: the employee is entitled to 21 continuous days’ annual leave on full pay in every leave cycle.
- “Leave cycle” means a period of 12 months commencing from the first day of employment or commencing from the end of the previous leave.
About South Africa
South Africa is the southernmost country in Africa.
South Africa is the second largest African power in terms of GDP. The country is known worldwide for producing gold. According to the latest statistics, in 2021, South Africa produced an estimated of 100 tons of gold. Agriculture is also of major importance in South Africa. The country has a highly diversified agricultural sector.
Fun fact: South Africa is the only country in the world with 3 capital cities. These are: Cape Town, the legislative capital, Pretoria, the executive capital, and Bloemfontein, the judicial capital.
Are you looking to settle in South Africa? Do you need help with payroll or human resources management? Our South Africans payroll and HR experts will provide you with a fast and accurate service in full compliance with local legislation.
The South African social security system
South Africa has made good progress in broadening social assistance and expanding health
care and social insurance since 1994. However, there is still no public fund to finance all welfare programs. A large number of private occupational and voluntary schemes have been established but not everyone is covered.
Administrative Organisation
South African Social Security Agency (SASSA)
The mission of the Agency is to administer social security services to eligible children, older persons and people with disabilities.
South African Revenu Service (SARS)
The mandate of the South African Revenue Service (SARS) is to collect all revenues due, ensure optimal compliance with tax and customs legislation, and provide a customs and excise service that will facilitate legitimate trade as well as protect the economy and society.
Unemployment Insurance Fund (UIF)
The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption and parental leave, or illness. It also provides relief to the dependents of a deceased contributor.
Contributions
Currently, the only contribution is for the UIF – The Unemployment Insurance Fund – which is only the social security program financed by both employers and employees.
Employees and employers are each obligated to make contributions to an unemployment insurance fund at the rate of 1% of gross remuneration. The employer must pay a total contribution of 2% (1% contributed by the employee and 1% contributed by the employer) within the prescribed period.
Income Tax
The employer must be registered for PAYE (Pay as you earn) with SARS. The employee has to register for income tax with SARS.
It’s the employer responsibility to obtain the employee’s income tax reference number before any payments. The employee also is liable for calculating taxes as per the statutory tax tables and to withhold those taxes from the employee’s salary.
Income tax must be transferred by the employer to SARS before/on the 7th day of the following month.
| Taxable Income (ZAR) | Rate of Tax |
|---|---|
| 1 – 237 100 | 18% of taxable income |
| 237 101 – 370 500 | 42 678 + 26% of taxable income above 237 100 |
| 370 501 – 512 800 | 77 362 + 31% of taxable income above 370 500 |
| 512 801 – 673 000 | 121 475 + 36% of taxable income above 512 800 |
| 673 001 – 857 900 | 179 147 + 39% of taxable income above 673 000 |
| 857 901 – 1 817 000 | 251 258 + 41% of taxable income above 857 900 |
| 1 817 001 and above | 644 489 + 45% of taxable income above 1 817 000 |
Individual tax tables are updated each year; the fiscal year begins on March 1 and ends on February 28.
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in South Africa.
Our Payroll and HR services in South Africa
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
- Highly secure
Sources
- https://wageindicator.org/salary/minimum-wage/minimum-wages-news/2022/minimum-wage-increased-in-south-africa-february-23-2022
- https://www.westerncape.gov.za/general-publication/basic-conditions-employment-act#:~:text=45%20hours%20in%20any%20week,days%20or%20less%20a%20week.
- https://taxsummaries.pwc.com/south-africa/individual/other-taxes
- https://static.pmg.org.za/161128Comprehensive_Social_Security_in_South_Africa.pdf
- https://nationalgovernment.co.za/units/view/40/south-african-revenue-service-sars
- https://www.sars.gov.za/types-of-tax/unemployment-insurance-fund/
- https://nationalgovernment.co.za/units/view/152/road-accident-fund-raf
- https://www.social-protection.org/gimi/gess/ShowWiki.action?wiki.wikiId=852
- https://www.activpayroll.com/global-insights/south-africa
- https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/
- https://www.sars.gov.za/types-of-tax/personal-income-tax/
- https://www.sars.gov.za/types-of-tax/pay-as-you-earn/
- https://www.gov.za/services/uif/uif-unemployment-benefits#:~:text=To%20qualify%20for%20benefits%2C%20you,benefits%20or%20contact%20the%20UIF