South Africa Employment Law & Compliance Guide for Employers
Key employment laws in South Africa: what employers need to know
Employment in South Africa is governed mainly by the Basic Conditions of Employment Act (BCEA), the Labour Relations Act (LRA) and the Employment Equity Act, with payroll taxes collected by SARS. Foreign employers are most often surprised that almost any dismissal, even during probation, can be challenged at the CCMA [Commission for Conciliation, Mediation and Arbitration], and that work visas follow a points-based test. This page summarises the core employer rules as of October 2026, with links to official sources.
South Africa employment rules at a glance
| Topic | What the rule is | Official source |
|---|---|---|
| Minimum wage | R30.23 per ordinary hour from 1 March 2026 (up from R28.79), under the National Minimum Wage Act. Farm and domestic workers get the same rate. Employers that cannot afford it may apply for an exemption. | SAnews (Government News Agency): National Minimum Wage increase 2026 |
| Standard working hours | Maximum 45 ordinary hours a week: 9 hours a day on a 5-day week, 8 hours a day on a longer week. Employees earning above the BCEA earnings threshold are excluded from the hours and overtime limits. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
| Overtime pay | At least 1.5 times normal pay, only by agreement, capped at 3 hours a day and 10 hours a week. Sunday work is paid at double (1.5 times if the employee ordinarily works Sundays). Public-holiday work is paid at least double. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
| Paid annual leave | 21 consecutive days per 12-month leave cycle (15 working days on a 5-day week), or by agreement 1 day per 17 days worked. Leave must be granted within 6 months after the cycle ends. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
| Public holidays | 12 public holidays a year under the Public Holidays Act 36 of 1994. A holiday that falls on a Sunday moves to the Monday. Work on a public holiday is by agreement only. | South African Government: Public holidays |
| Sick leave | Paid sick leave equal to the days normally worked in 6 weeks per 36-month cycle (30 days on a 5-day week). In the first 6 months: 1 day per 26 days worked. A medical certificate can be required for absences over 2 consecutive days. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
| Maternity and parental leave | At least 4 consecutive months of maternity leave, unpaid by the employer; UIF pays benefits. Since the Constitutional Court's Van Wyk judgment (3 October 2025), parents share 4 months and 10 days between them, pending legislation. | Constitutional Court: Van Wyk v Minister of Employment and Labour [2025] ZACC 20 (SAFLII) |
| Probation period | No fixed statutory length. The Code of Good Practice: Dismissal (in force 4 September 2025) requires a period that is reasonable for the job, and the employee must be heard before probation is extended or ended. | DLA Piper summary of the Code of Good Practice: Dismissal 2025 (professional source) |
| Notice period | Minimum written notice: 1 week in the first 6 months, 2 weeks from 6 months to 1 year, 4 weeks after 1 year (also for farm and domestic workers after 6 months). Pay in lieu is allowed. | Basic Conditions of Employment Act 75 of 1997, section 37 (gov.za) |
| Severance pay | At least 1 week's pay per completed year of continuous service when dismissed for operational requirements (retrenchment). Not owed for misconduct or incapacity dismissals, or if the employee unreasonably refuses alternative employment. | Basic Conditions of Employment Act 75 of 1997, section 41 (gov.za) |
| Employer social contributions | About 2% of payroll plus COIDA: UIF 1% on earnings up to R17,712 a month, Skills Development Levy 1% (if annual payroll exceeds R500,000) and a Compensation Fund (COIDA) assessment set by industry. No mandatory employer pension. | SARS: Unemployment Insurance Fund |
| Employee social contributions | UIF 1% of remuneration, capped at R177.12 a month (ceiling R17,712). No mandatory state pension contribution; retirement fund contributions apply only if the contract or a bargaining council requires them. | SARS: Unemployment Insurance Fund |
| Income tax on salaries | PAYE is withheld each payroll and paid with the EMP201 within 7 days after month-end. 2026/27 rates run from 18% to 45% in 7 bands; 45% applies above R1,878,600. Tax threshold R99,000 (under 65). | SARS: Rates of tax for individuals |
| Mandatory bonuses and 13th-month pay | None required by law. A 13th cheque or annual bonus is common, but it is owed only if the contract, a policy, established practice or a bargaining council agreement provides for it. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
| Work permits for foreign nationals | Main types: Critical Skills Work Visa, General Work Visa and Intra-Company Transfer Work Visa, issued by the Department of Home Affairs. The employee applies with employer documents. General and critical skills visas use a 100-point test. | South African Government: How do I obtain a work permit? |
| Employment contract requirements | Written particulars of employment are required when work starts (BCEA section 29): job, pay, hours, leave, notice. They must be explained in a language the employee understands. Contracts are not registered, but the employer registers for PAYE, UIF and COIDA. | Basic Conditions of Employment Act 75 of 1997 (gov.za) |
Employer obligations in South Africa, topic by topic
Filter by primary service relevance
Does an employment contract in South Africa have to be in writing, and how long can probation last?
What are the maximum working hours and overtime rules in South Africa?
What is the minimum wage in South Africa and how must salaries be paid?
How much annual, sick and parental leave must employers give in South Africa?
What payroll taxes and social contributions does an employer pay in South Africa?
How can an employer dismiss an employee in South Africa, and what does it cost?
Can a company in South Africa hire foreign nationals, and which work visa do they need?
Is it risky to treat workers as independent contractors in South Africa?
Key employment laws in South Africa and official sources
- Basic Conditions of Employment Act 75 of 1997 (BCEA) — Sets minimum terms: working hours, overtime, leave, written particulars, notice and severance pay.
- Labour Relations Act 66 of 1995 (LRA) — Governs unfair dismissal, retrenchment consultation, the CCMA, collective bargaining and the presumption of employment.
- Employment Equity Act 55 of 1998 — Bans unfair discrimination and requires designated employers (50 or more employees) to file employment equity plans and reports.
- Unemployment Insurance Act 63 of 2001 — Creates the UIF and its unemployment, illness, maternity and parental benefits, funded by 1% employer and 1% employee contributions.
- Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA) — Requires employers to register with the Compensation Fund and pay annual assessments covering work injuries and diseases.
- Income Tax Act 58 of 1962, Fourth Schedule (PAYE) — Requires employers to withhold employees’ tax, file the EMP201 monthly and reconcile on the EMP501.
- Immigration Act 13 of 2002 — Sets the work visa categories and bars employing foreign nationals who lack the right to work.
- Employment Services Act 4 of 2014 — Regulates private employment agencies and the employment of foreign nationals, including employer checks on work authorisation.
FAQs: hiring employees in South Africa
Can a foreign company hire employees in South Africa without a local entity?
Yes, in practice through an Employer of Record (EOR), which employs the worker locally and runs PAYE, UIF, SDL and COIDA under its own registrations. A foreign company can also register as an employer with SARS directly, but it then carries all payroll and labour law duties itself and may create a taxable presence. Opening a branch or subsidiary through the Companies and Intellectual Property Commission (CIPC) is the usual route for larger teams.
How much does an employee cost in South Africa on top of gross salary?
Statutory employer costs are about 2% of payroll plus a COIDA assessment. The employer pays UIF at 1% on pay up to R17,712 a month (maximum R177.12), the Skills Development Levy at 1% if annual payroll exceeds R500,000, and an annual Compensation Fund assessment set by industry. There is no mandatory employer pension. Many employers add retirement fund and medical aid contributions to compete for staff, which can raise the real cost well above the statutory minimum.
What is the minimum wage in South Africa in 2026?
The national minimum wage is R30.23 per ordinary hour from 1 March 2026, up from R28.79. That is about R241.84 for an 8-hour day or R1,209.20 for a 40-hour week. It applies to farm and domestic workers too. Some bargaining council agreements and sectoral determinations set higher rates for their sectors. The rate is reviewed every year, with changes normally taking effect on 1 March.
How much notice and severance does an employer owe when dismissing an employee in South Africa?
Minimum notice under the BCEA is 1 week in the first 6 months, 2 weeks from 6 months to 1 year and 4 weeks after 1 year; pay in lieu is allowed. Severance of at least 1 week’s pay per completed year of service is owed only on retrenchment for operational requirements. The dismissal must also be fair in reason and procedure, or the CCMA can award up to 12 months’ pay as compensation.
Can a company hire a foreign national in South Africa, and what permit is needed?
Yes. The employee needs a work visa from the Department of Home Affairs before starting work. The main options are the Critical Skills Work Visa (for occupations on the critical skills list), the General Work Visa and the Intra-Company Transfer Work Visa. General and critical skills visas use a 100-point test that rewards salary, qualifications, experience and a Trusted Employer offer. The employer must give written undertakings and must not employ anyone without valid work authorisation.
Is it risky to engage contractors instead of employees in South Africa?
Yes. For people earning below the BCEA threshold, the LRA presumes employment if any one of seven factors applies, such as working under the client’s control, working only for one client or using its equipment. A misclassified worker can claim unfair dismissal, leave and notice, and SARS can recover unpaid PAYE, UIF and SDL with penalties. Use a contractor agreement only where the worker runs an independent business with several clients.
Related NNRoad resources for South Africa: Employer of Record in South Africa · Payroll in South Africa · Hiring foreign employees in South Africa · Contractors and on-demand talent in South Africa · South Africa employer cost calculator
Interested In Learning More?
Talk to our local compliance specialists to discuss your specific situation:
Including employment, payroll, tax, and ongoing regulatory obligations.
Regulation Updates in South Africa
Labour Relations Act: Metal and Engineering Industries Bargaining Council: Renewal and Extension of the Pension Fund Collective Agreement
What it is: The Pension Fund Collective Agreement for the Metal and Engineering Industries Bargaining Council has been renewed and extended, maintaining employer obligations under the agreement and affecting social contributions for covered employers.
What it changes: The renewal and extension imposes continued employer obligations under the Pension Fund Collective Agreement and affects social contributions for covered employers.
Who is affected:
- Employers covered by the Metal and Engineering Industries Bargaining Council Pension Fund Collective Agreement
What employers should do:
- Continue compliance with the Pension Fund Collective Agreement obligations as required by the renewal and extension.
- Review current social contributions to ensure alignment with the extended agreement.
Notes: Effective month: 2026-05.
Dec 2025: South Africa Labour Law Amendment Act 2025: Key Updates
Stay informed about the latest changes in South Africa’s employment legislation with the Labour Law Amendment Act 2025. This update introduces important provisions for remote work and wage regulations, impacting employers, employees, and legal professionals alike. Understanding these reforms is essential to ensure compliance and protect workers’ rights in the evolving workplace landscape.
Update first published on NNRoad in Dec 2025. The current rules are summarised in the sections above.
Discover the latest employment and compliance updates in South Africa — helping you stay ahead in a changing regulatory landscape.