Overview

Capital
Pretoria
Currency
South African Rand
Date Format
dd/mm/yyyy

calendar icon Public holidays calendar

Taxes

Employer
1.00% - Skills Developemnt Levy (SDL)
1.00% - Unemployment
Employee
18% - Up to 195,850
35,253 + 26% taxable income above 195,850 - 195,850 - 305,850
305,850 + 31% taxable income above 305,850 - 305,850 - 423,300
100,263 + 36% taxable income above 423,300 - 423,300 - 555,600
147,891 + 39% taxable income above 555,600 - 555,600 - 708,310
207,448 + 41% taxable income above 708,310 - 708,310 - 1,500,000
532,041 + 45% taxable income above 1,500,000 - Above 1,500,000

Minimum Wage

General

Typically, minimum wage in South Africa is 20 ZAR an hour.  The minimum wage is subject to change based on the hours worked.  In addition, there are some types of work where the minimum wage is 15 ZAR per hour.

Payroll

Payroll Cycle

There is no set pay date in South Africa, this typically is something that the employee and employer come to an agreement on. The payroll cycle can be done monthly, weekly, or bi-weekly.   

Working Hours

General

Full-time employment is considered 45 hours weekly, and 9 hours daily. This amount is subject to contractual agreement, and oftentimes is less).

Overtime

Overtime is voluntary and must be agreed upon by employer and employee in advance. The max overtime allowance is 3 hours daily or 10 hours in one week. If agreed on, overtime is paid at 150% of the normal rate. For Sunday and public holidays, the rate for overtime is 200% the normal rate.  

Payroll Contributions

Social Security

In South Africa, there are no social security contributions.

Pension Fund

27.5% of workers wage is contributed to the pension funds.

Unemployment Insurance

In South Africa, the amount of the contribution due by an employee and employer to the Unemployment Insurance Fund (UIF) is 1% of the remuneration.  The maximum earnings ceiling is 14,872 ZAR per month or 178,464 ZAR annually. For employees who earn more than this amount, the contribution is calculated using the maximum earnings ceiling amount. The maximum contribution which can be deducted, for employees who earn more than 14,872 ZAR per month, is 148.72 ZAR per month.

Leave

Public Holidays

There are 13 public holidays in South Africa.  

Maternity Leave

In South Africa, a woman is entitled to 4 consecutive months of maternity leave.  This entitlement can begin from at least 4 weeks before the birth.  However, If the woman is not able to work due to her medical condition, it is possible that the leave be taken earlier. 

The woman cannot return to work for at least 6 weeks after birth, unless otherwise approved by a doctor.

The employer is not obligated to pay the employee for maternity leave. Instead, a claim can be made from the Maternity Benefit Fund if contributions have been made to the Unemployment Insurance Fund (UIF).  The maximum the employee is able to receive from this benefit is 60% of their regular pay and are paid for 121 days.   

Paternity Leave

Paternity falls under Parental leave.    

Parental Leave

Fathers are entitled to 10 days of parental leave, paid by the UIF at a rate of 66% of the regular pay.  For the father to exercise parental leave, they must inform their employer in writing at least one month before the expected due date of the child. This leave also applies to adoptive fathers. 

Other Leave

Study leave: At the employer’s discretion, an employee who is in school can take 2 paid days per subject per year with a maximum of 10 days a year.  After the 10 days, any additional leave for the purpose of studying would have to be taken as unpaid leave.   

Work related injury leave: If an employee is injured at work and take 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.

Termination

Termination Process

In South Africa, employers are not able to terminate an employee at will, but can be dismissed for the following:

  • Misconduct– usually given without notice
  • Incapacity (health or poor performance)- termination due to poor performance is usually given after the employee receives an opportunity to meet his or her performance standards.
  • Operational requirements of the company

When the employee and employer would like to separate amicably, a separation agreement is common. 

Notice Period

Both the employee and employer must follow the same notice period based on the length of the employment relationship:

  • 6 months or less – 1 weeks’ notice
  • 6- less than 1 year – 2 weeks’ notice
  • More than 1 year- 4 weeks’ notice

For farm and domestic employees, the above notice periods must be followed and may not be shortened. 

It is possible, however, to shorten the notice of 4 weeks to no less than 2 if stated under a collective bargaining agreement for other types of employees. 

Severance Pay

If the employee is terminated due to poor performance or misconduct, the employee is not entitled to pay severance pay.

If the employee is terminated due to operational requirements, the company is obligated to pay the employee one week’s severance pay for ever year employed. 

VAT

General

15% standard rate.