Hire in South Africa
South Africa PEO &
Employer of Record
Hire & manage teams remotely in South Africa without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
English, Afrikaans
Salary Currency
South African Rand (ZAR)
Payroll tax
2.00%
Payroll Cycle
Monthly
Time zone
UTC +2
Capital city
Pretoria
Hire Employees in South Africa
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in South Africa
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in South Africa
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in South Africa
Employee Income Taxes:
Tax Brackets
26%: 266,001 – 353,000 ZAR
31%: 353,001 – 488,700 ZAR
36%: 488,701 – 641,400 ZAR
39%: 641,401 – 817,600 ZAR
41%: 817,601 – 1,731,600 ZAR
45%: Over 1,731,601 ZAR
Sample Calculation
0.18 * 266,000 = 47,880
0.26 * (353,000 – 266,001) = 22,620.74
0.31 * (488,700 – 353,001) = 42,006.69
0.36 * (641,400 – 488,701) = 54,971.64
0.39 * (817,600 – 641,401) = 68,637.61
0.41 * (1,000,000 – 817,601) = 74,723.59
Yearly income tax = 47,880 + 22,620.74 + 42,006.69 + 54,971.64 + 68,637.61 + 74,723.59 = 310,840.27 ZAR
Employer Costs in South Africa
Employer Contribution
1% – Skills Development Levy (SD)
1% – Unemployment insurance (UIF)
Total employment cost: 2%
Employee Contribution
1% – Unemployment insurance (UIF)
Total employment cost: 1%
Benefits & Insurance in South Africa
Pension Fund
The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption and parental leave, or illness. It also provides relief to the dependents of a deceased contributor.
Healthcare Insurance
South African citizens and permanent residents get free primary healthcare, however, it is means-tested and mostly provided to individuals with lower earnings. Those who earn more than the poverty line will have to pay for some or all of the treatment they receive from the government health system.
Working Hours in South Africa
Working Hours Per Week
The Basic Conditions of Employment Act (BCEA) stipulates that the maximum weekly regular working time is 45 hours. If the employee works a five-day week, this is nine hours per day (excluding lunch), and if the employee works more than five days per week, this is eight hours per day (excluding lunch). This does not imply that the employee must work normally for 45 hours per week. The amount of typical time worked is determined by a contract between the employer and the employee.
Overtime
All overtime is optional, and it can only be worked if both the company and the employee agree. The maximum amount of overtime that can be worked in a single day is three hours or ten hours in a week. Except for Sunday and public holiday labor, which must be paid at twice the standard wage rate, remuneration must be 1.5 times the normal salary rate.
Termination Laws in South Africa
An employee has the right to a fair dismissal under the Labour Relations Act 66 of 1995 (“LRA”).
A fair dismissal must be equitable in both substance and procedure.
In terms of the LRA, there are three recognized fairgrounds of dismissal:
Misconduct;
1. Operational Requirements (redundancy/retrenchment); or
2. Incapacity (this is inclusive of ill health, poor work performance and incompatibility).
Severance
In South Africa, severance pay usually consists of 1 week’s salary for every year of service. This is usually only given for redundancy, not for other types of dismissals.
Notice Period
The notice period for termination depends on the length of service:
1 week – in case the employee has been with the company for 6 months or less
2 weeks – in case the employee has been with the company for more than 6 months but less than one year
4 weeks – in case the employee has been employed for more than one year
Employment Contract in South Africa
Employment Contract
It is critical that an employee’s status – permanent, fixed-term, temporary, and so on – be determined from the start of the employment relationship. Section 29 of the Basic Conditions of Employment Act mandates that certain written employment particulars be provided as a minimum, and every employer is legally obligated to disclose these minimum particulars in writing to all employees no later than the first day of employment. Even if there isn’t any legal requirement to give a written contract, it is strongly advised for employers to provide a written contract to the employees, so to avoid potential problems in case of labor disputes.
Probation Period
Probationary durations should be kept to a minimum. This will be determined by the nature of the job, which will determine how long it takes to evaluate whether or not the employee is functioning properly. As a general rule, the longer the probation time, the more complicated the task is.
Types of Leaves in South Africa
Annual Leave
An annual leave cycle is a 12-month period with the same company, beginning with the employee’s first day on the job or ending with the employee’s previous leave cycle. In each annual leave cycle, an employee is entitled to 21 consecutive days of paid annual leave; if an employee works a five-day week, this equates to 15 working days; if an employee works a six-day week, this equates to 18 working days.
Sick Leave
In South Africa, paid sick leave is calculated on a three-year cycle (at 100% of the employee’s usual rate of pay). For every 26 days worked during the first six months of employment, the employee is entitled to one day of paid sick leave.
From the first day of the 7th month, the employee receives:
Maternity Leave
A pregnant employee is entitled to four months of unpaid maternity leave under South African labor legislation. The employee can take the leave starting four weeks before the due date and must not return to work until six weeks after the due date. If the employee has paid into UIF, they may be eligible for a maternity benefit of up to 60% of their usual salary rate, depending on their income and insurance coverage.
Paternity Leave
There isn’t any statutory paternity leave for father but when their children are born/given to the parent, all new parents, including fathers, adopting parents, and surrogates, are entitled to ten days of unpaid parental leave (s).
Unpaid Childcare Leave
In South Africa, mothers are entitled to up to four months of unpaid leave within four weeks after giving birth, or sooner if a medical expert deems it appropriate. In the contract between the employer and the employee, more liberal terms can be negotiated.
Study Leave
An employee in school can take two paid days per topic per year, up to a total of ten paid days per year, at the employer’s option. Any additional absence taken for the purpose of studying after the ten days must be taken as unpaid leave.