How to hire and pay EMPLOYEES IN

South Africa

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Before hiring

EMPLOYEES IN
South Africa

Before hiring employees in South Africa, there are a few important things you’ll need to know. Firstly, in South Africa, non-compete agreements are typically enforced for periods between six and 12 months. 

It’s also important for employers to know that employees in South Africa are entitled to four months of unpaid maternity leave, which must begin at least four weeks before birth. The employee must give the employer one month’s notice of the commencement of maternity leave.

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in South Africa below.

At a Glance

CURRENCY

ZAR

OFFICIAL LANGUAGE

11 official languages including English, Afrikaans, Xhosa, and Zulu

PAYROLL FREQUENCY

MONTHLY, BI-WEEKLY, WEEKLY

PUBLIC HOLIDAYS

UP TO 14

(based on region;
see here
)

EMPLOYER TAXES

2%

of gross salary

13th / 14th SALARY

Non-mandatory customary 13th salary is generally paid in December

Good to know

  • Many companies in South Africa have a shutdown period over December. They can ask employees to take their annual leave to coincide with this period. Should an employee take their annual leave at another time during the year, then the shutdown period is treated as unpaid leave.
  • VAT of 15% if required on the total cost of employment in South Africa if the new hire's main areas of work are based in South Africa (e.g. managing team in South Africa, business interactions are mainly in South Africa). If they are not, and their business activities are outside South Africa, then VAT does not apply.
  • Parental leave is unpaid in South Africa. But parents can claim payment from the Department of Labour’s Unemployment Insurance Fund (UIF) if they have contributed to it.

Employment in

South Africa

Working hours and overtime

Employees in South Africa work nine hours daily, 45 hours weekly.

In South Africa, up to 10 hours overtime per week is permitted.

Employees earning below a threshold of 205,433.30 ZAR per year are paid 150% of their normal wage for overtime worked on weekdays and 200% for Sundays. Employees cannot opt out of these provisions.

Employees earning in excess of the threshold are not subject to overtime pay, but cannot be forced by their employer to work overtime without compensation without prior agreement.

Employment contracts
Probationary period

In South Africa, the probationary period is typically three months. 

Pensions
Notice period

The notice period for both dismissals and resignations depends on the length of the employment relationship. The breakdown is as follows:

  • Six months or less: One weeks’ notice
  • Six months to less than a year: Two weeks’ notice
  • More than a year: Four weeks’ notice
IP protection and non-compete agreements

Non-compete agreements are typically enforced for periods between six and 12 months. Employers do not need to pay employees separately for these agreements to be enforceable.

Employment cost calculator

Holidays

01 Jan

New Year's Day

16 Jun

Youth Day

21 Mar

Human Rights Day

09 Aug

National Women's Day

22 Mar

Human Rights Day Holiday

24 Sep

Heritage Day

02 Apr

Good Friday

16 Dec

Day of Reconciliation

05 Apr

Family Day

25 Dec

Christmas Day

27 Apr

Freedom Day

26 Dec

Day of Goodwill

01 May

Workers' Day

27 Dec

Day of Goodwill Holiday

01 Jan

New Year's Day

21 Mar

Human Rights Day

22 Mar

Human Rights Day Holiday

02 Apr

Good Friday

05 Apr

Family Day

27 Apr

Freedom Day

01 May

Workers' Day

16 Jun

Youth Day

09 Aug

National Women's Day

24 Sep

Heritage Day

16 Dec

Day of Reconciliation

25 Dec

Christmas Day

26 Dec

Day of Goodwill

Employer tax

An employer’s social contributions in South Africa total 2% and includes contributions for Skills Development Levy (SDL), unemployment insurance, and workers compensation. 

VAT of 15% is also required on the total cost of employment in South Africa if the employee's main areas of work are based in South Africa (e.g. managing team in South Africa, business interactions are mainly in South Africa). If they are not, and their business activities are outside South Africa, then VAT does not apply.

Individual tax

In South Africa, employees pay between 18% and 45% depending on their income bracket. They also pay a social security tax of 1%. 

Termination of employment

In South Africa, if the employee is terminated due to operational requirements, their employer is obligated to pay the employee one week’s severance pay for every year employed. No severance pay is payable for dismissal for other reasons.

Start hiring employees in

South Africa

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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