Payroll Services in South Africa

Q: How does payroll work in South Africa?

All Employers in South Africa are required to contribute to the Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF). Both schemes require a 1% contribution from the employer. The SDL was founded to fund education and training for the workforce in South Africa.

Q: What are the general employment rules?

Every employee is entitled to 21 days of consecutive leave in each cycle. These 3 weeks are fully paid and are equivalent to 15 working days based on a 5-day working week or 18 working days based on a 6-day working week. Employees are also entitled to 12 public holidays throughout the year, fully-paid.

Q: What about dismissing an employee?

There are minimum notice periods based on the employee’s length of service. For up to six months of employment, only 1 week is required. For six months to one year’s service, 2 weeks are required. For more than one year’s service, a minimum of 4 weeks are required. In addition to the notice period, a minimum of one week’s pay per one year of service will be required as remuneration for a standard dismissal. In some instances no severance pay is required.

Hiring employees in South Africa

Currency

South African Rand (ZAR)

Population

59,622,350

Capital

Pretoria

Official language(s)

English and 10 others

Date format

dd/mm/yyyy

Fiscal year

1 April – 31 March

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Employing in South Africa

In 2025, the National Minimum Wage rate increased to ZAR 28,79 per hour.

In South Africa, individual tax rates and thresholds vary depending on an employee’s salary. The tax rates in 2025 are:

Income (ZAR)	Tax on column 1 (ZAR)	Tax on excess (%)
0 to 237,100	0	18
237,101 to 370,500	42,678	26
370,501 to 512,800	77,362	31
512,801 to 673,000	121,475	36
673,001 to 857,900	179,147	39
857,901 to 1,817,000	251,258	41
1,817,001 and above	644,489	45

Employers typically contribute between 5% and 15% to an employee’s pension.

South Africa operates the Government Employee’s Pension Fund (GEPF) which both the employer and employee contributes to. All eligible GEPF members pay 7.5% of their pensionable salary towards the Fund, while employers pay 13%.

Working hours in South Africa are governed by the Basic Conditions of Employment Act, which states:

The maximum weekly hours is 45 hours
The daily maximum hours is 9 hours per day (5-day work week), or 8 hours per day (more than 5 days)
Overtime is capped at 10 hours per week, and cannot exceed 12 hours per week including overtime
Overtime is compensated at 1.5 times the employee’s wage, and double for Sundays and public holidays

Employee’s leave consists of several types:

Statutory time off or paid leave, which is 21 days per year for full-time employees
Public holidays (there are 12 public holidays in South Africa)
Maternity, Paternity and Parental leave
Sick leave

In South Africa, employment termination must adhere to the Labour Relations Act and requires both substantive and procedural fairness. Reasons for dismissal could include:

Misconduct
Operational requirements/redundancy
Incapacity

Minimum notice periods are required, typically these are:

1 week for 6 months of service or less
2 weeks for between 6 and 12 months of service
4 weeks for more than 1 year of service

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Frequently Asked Questions

All Employers in South Africa are required to contribute to the Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF). Both schemes require a 1% contribution from the employer. The SDL was founded to fund education and training for the workforce in South Africa.

Every employee is entitled to 21 days of consecutive leave in each cycle. These 3 weeks are fully paid and are equivalent to 15 working days based on a 5-day working week or 18 working days based on a 6-day working week. Employees are also entitled to 12 public holidays throughout the year, fully-paid.

There are minimum notice periods based on the employee’s length of service. For up to six months of employment, only 1 week is required. For six months to one year’s service, 2 weeks are required. For more than one year’s service, a minimum of 4 weeks are required. In addition to the notice period, a minimum of one week’s pay per one year of service will be required as remuneration for a standard dismissal. In some instances no severance pay is required.

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