South Africa at a glance
Taxes in South Africa
Employer Contributions
| Contribution | Rate |
|---|---|
| Unemployment Insurance Fund (UIF) | 1% of employee salary |
| Skills Development Levy (SDL) | 1% of employee salary |
| Compensation Fund (COIDA) | Annual assessment — based on earnings and work risk category |
| Contribution | Rate |
|---|---|
| Unemployment Insurance Fund (UIF) | 1% of employee salary |
| Skills Development Levy (SDL) | 1% of employee salary |
| Compensation Fund (COIDA) | Annual assessment — based on earnings and work risk category |
| Contribution | Rate |
|---|---|
| Unemployment Insurance Fund (UIF) | 1% of salary |
| Income Tax (PAYE) | 18% – 45% (progressive) |
| Annual Gross Income (ZAR) | Tax |
|---|---|
| R0 – R237,100 | 18% |
| R237,101 – R370,500 | R42,678 + 26% above R237,100 |
| R370,501 – R512,800 | R77,362 + 31% above R370,500 |
| R512,801 – R673,000 | R121,475 + 36% above R512,800 |
| R673,001 – R857,900 | R179,147 + 39% above R673,000 |
| R857,901 – R1,817,000 | R251,258 + 41% above R857,900 |
| Above R1,817,001 | R644,489 + 45% above R1,817,000 |
Employer of Record in South Africa
What Is an Employer of Record?
An Employer of Record is the legal employer of your worker in South Africa. Remote& assumes all compliance obligations under the Basic Conditions of Employment Act (BCEA) and Labour Relations Act (LRA) — employment contracts, UIF and SDL filings, payroll, PAYE withholding, and statutory benefits — so you can hire in South Africa without a local entity.
How Remote& EOR Works
| Party | Role |
|---|---|
| Your Company | Recruits the worker, assigns tasks, manages performance |
| Remote& | Signs the employment contract, registers with SARS and UIF, processes payroll, withholds PAYE, manages statutory contributions |
| Employee | Fulfills their role for your company under a South African-law-compliant employment contract |
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"Hire a Data Scientist in Cape Town — R80,000/month, starting in 6 weeks" Remi handles contract drafting, SARS registration, UIF and SDL setup, payroll configuration, and leave management — all in one conversation.
Benefits in South Africa
Unemployment Insurance Fund (UIF) Both employer and employee contribute 1% of salary to the UIF, which provides short-term unemployment, illness, maternity, and dependants' benefits.
Skills Development Levy (SDL) Employers contribute 1% of payroll to the SDL, funding national training initiatives via the Sector Education and Training Authorities (SETAs).
Compensation Fund (COIDA) Employers pay an annual assessment fee to the Compensation Fund, which covers employees for occupational injuries and diseases.
- Medical aid / private health insurance (not statutory but common)
- Group life and disability insurance
- Pension or provident fund contributions
- Annual performance bonus
- Transportation allowance
- Flexible working hours
- Professional development and wellness budget
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Annual Leave | 21 consecutive days (or 1 day per 17 days worked) + 12 public holidays |
| Sick Leave | 30 days over every 3-year cycle |
| Maternity Leave | 4 months unpaid |
| Adoption Leave | 10 consecutive weeks |
| Parental Leave | 10 days |
Employment conditions
Working Hours
The standard working week is 45 hours (9 hours per day for a 5-day week; 8 hours for a 6-day week). Overtime may not exceed 10 hours per week and must be compensated at 1.5 times the regular rate, or 2 times on Sundays and public holidays.
Probation
The LRA does not mandate a specific probation length. Employers may include reasonable probation periods in contracts to assess job performance. Dismissals during probation must still be procedurally and substantively fair.
Employee Records
Employers must retain accurate records of personal information, employment history, and remuneration for at least three years after employment ends.
Payments
End of employment in South Africa
Terminations in South Africa must comply with both the LRA and the BCEA. The LRA recognises three grounds for dismissal (misconduct, incapacity, and operational requirements/redundancy), and all dismissals must be substantively justified and procedurally fair. Written notice must meet BCEA minimum periods or the contractual notice period, whichever is longer.
Unfair dismissal claims may be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA). Remedies include reinstatement or compensation of up to 12 months' salary. Retrenchments require a prescribed consultation process.
Frequently asked questions
The main approaches are: home-country payroll (suitable only for very short-term arrangements), independent contractor engagements (for genuine project-based work), establishing a local South African entity, or using Remote& as your Employer of Record. The EOR route delivers a fully compliant employment structure — PAYE, UIF, SDL, and statutory leave — without entity costs.