Country Payroll Guide South Africa

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Key Facts

Capital
Pretoria, Cape Town and Bloemfontein
Date format
yyyy-mm-dd
Currency
South African Rand (ZAR)
VAT
the standard rate is 15%

Contributions

Employers

Unemployment Insurance Fund
Unemployment Insurance Fund - 1%
Skills Development Levy (SDL)
Skills Development Levy (SDL) - 1%
Total Employment Cost
Total Employment Cost - 2%

Employees

Unemployment Insurance
Unemployment Insurance - 1%
Total Employee Cost
Total Employee Cost - 1%

Minimum Wage

Minimum Wage
The minimum wage in South Africa is 21.69 ZAR per hour.

Payroll

Payroll Cycle
Monthly
13th Salary

Paid at the end of the year.

Income Tax

Employee Income Tax (1)
Up to 205,900 ZAR - 18%
Employee Income Tax (2)
205,900 - 321,600 ZAR - 37,062 + 26% taxable income above 195,850
Employee Income Tax (3)
321,601 - 445,100 ZAR - 67,144 + 31% taxable income above 305,850
Employee Income Tax (4)
445,101- 584,200 ZAR - 105,429 + 36% taxable income above 423,300
Employee Income Tax (5)
584,201 - 744,800 ZAR - 155,505+ 39% taxable income above 555,600
Employee Income Tax (6)
744,801 - 1,577,300 ZAR - 218,139 + 41% taxable income above 708,310
Employee Income Tax (7)
Over 1,577,300 ZAR - 559,464 + 45% taxable income above 1,500,000

Working Hours

General Working Hours

45 hours per week.

This is 9 hours per day (excluding lunch break) for a five day week, and 8 hours per day (excluding lunch break) if work week is longer than five days.

Overtime

The maximum permissible overtime is 10 hours in any 1 week.

Leave

Paid Time Off

15 days per year, 1.25 days per month of employment.

Public Holidays

13 public holidays.

Sick Days

If employees work 5 days per week, they are entitled to 30 days every 36 months. If employees work 6 days per week, they are entitled to 36 days leave every 36 months. If an employee works five days a week and also every second Saturday, the employee is entitled to 33 days sick leave.

Maternity Leave

Employees are entitled to 4 months unpaid maternity leave. Maternity leave should commence one month before the expected date of birth of the child, and the employee is obliged to give the employer one month’s notice of their intention to take maternity leave.

Maternity leave is unpaid and the employee must claim maternity benefits through the Department of Labour 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.

Parental Leave

An employee who is a parent of a child will be entitled to 10 consecutive days’ parental leave. This applies irrespective of the gender and therefore includes parents in same sex relationships. The UIF will pay those workers 66% of their salary up to the BCEA (Basic Conditions of Employment Act) earnings cap of R205,433.30 per annum.

Other Leave

Study Leave

This benefit is available to permanent employees who have been employed by the Company for at least one year and who undertake part-time studies in line with their career plan and approved for by the company. All study leave is granted on management’s discretion. Policy The company will grant two days study leave per subject per annum with a maximum of no more than 10 days study leave in total per annum. Any additional leave required for study purposes will have to be taken as unpaid leave.

Termination

Termination Process

Employers are not permitted to terminate an employee at will, but can be dismissed for the following: misconduct by the employee, for example, if the employee is guilty of theft, being absent without authorisation, refusing to obey employer’s instructions and so on; incapacity of the employee, for example, when an employee fails to meet the employer’s performance standard or when an employee fails to perform the work s/he was employed to do because of his/her ill health; or operational requirements of the employer, for example, if the employer had a drop in sales and cannot afford the employee any longer.

Notice Period
  • One week, if the employee has been employed for six months or less
  • Two weeks, if the employee has been employed for more than six months but less than a year
  • Four weeks, if the employee has been employed for one year or more or, in the case of a farmworker or domestic worker, employed for more than six months.
Severance Pay

Employees terminated due to poor performance or misconduct are not entitled to severance pay. Employees terminated due to operational requirements are entitled to one week’s severance pay for every year employed.

Probation Period

A standard probation period is normally 3 months but can be extended for up to another 3 months. The probation period should not be longer than 6 months at most.

Visa

Employment Visa
  • General Work Visa: In order to get a General Work Visa, an applicant has to secure a position with a South African business. The business has to advertise the position and only when there are no qualified applicants, turn to the foreign worker, who also has to demonstrate qualification. If and when the visa is approved, it is valid for the length of the employment contract, up to a limit of 5 years.
  • Critical Skills Work Visa: Applicants who possess certain skills listed by The South African Department of Home Affairs can apply for a Critical Skills Work Visa. It is not necessary to secure employment prior to the visa but it is necessary for the applicant to prove that he or she has the necessary skills. The visa lasts five years but it is possible to apply for permanent residency in South Africa under some conditions.
  • Intra-Company Transfer Visa: An applicant who works at a branch of a company outside of South Africa and gets transferred to a South African branch of the company can apply for an Intra-Company Transfer Visa. The visa is valid for 4 years and cannot be renewed.
  • Corporate Visa: A corporate visa can only be issued to South African registered company or branch (the applicant) and it offers the possibility to hire a pre-determined number of foreign workers for a period of 3 years, all under the remit of one application.