Employer of Record in South Africa

Businesses can only operate smoothly in South Africa if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in South Africa below, to avoid any compliance issues.

Employment Contract Requirements

When employing an individual in South Africa, the Basic Conditions of Employment Act (No. 75 of 1997 – the BCEA) compels an employer to give an employee a host of prescribed employment details in writing when they start work. The employer should also provide a contract of employment that is signed by both parties detailing:

• The companys disciplinary codes
• The date of commencement of employment
• The employees ordinary working days and work hours
• The employees wage rate and method of calculating wages

Onboarding Process

We can help you get a new employee started in South Africa quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in South Africa

Probationary periods in South Africa, are optional, but are often used to help mitigate risk in hiring. Employees can be subject to a probationary period that enables the employer to assess employees skills. General practice is 3-months.

In South Africa, the Basic Conditions of Employment Act (BCEA) establishes a standard workweek of 45 hours, with limits on daily and weekly overtime hours. Employees are permitted to work a maximum of 9 hours or day. Additionally, an employee is entitled to a 60 minute meal interval after 5 hours of continuous work. Typical weekday working hours are 9 am to 5:30 pm.

In South African employment, employees are not permitted to work more than 10 hours of overtime per week. Overtime compensation is required at 1.5 times the normal hourly rate, and double the rate for work on Sundays and public holidays.

Employment contracts usually specify overtime rates and calculations for transparency, promoting fair and mutually beneficial working relationships in line with South African employment norms.

Growing your team in South Africa is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Fiscal Year in South Africa

1 March - 28/29 February is the 12-month accounting period that businesses in South Africa use for financial and tax reporting purposes.

Payroll Cycle in South Africa

The payroll cycle in South Africa is usually monthly, with employees being paid by the 25th of the month.

Minimum Wage in South Africa

As of March 1, 2025, South Africa’s minimum wage is ZAR 28.79 per hour, or ZAR 4,606 per month, representing a 4.4% increase from the 2024 rate. 

Workers employed on Expanded Public Works programs and workers on learnership agreements are entitled to a lower minimum wage of ZAR 15.83 per hour.

The minimum wage rates in South Africa are subject to periodic review, usually annually or as legislated, to adjust for inflation and economic factors.

Bonus Payments in South Africa

13th-month salary payments in South Africa are not legally required but are customary, and are typically paid in December of each year.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 2% on top of the employee salary in South Africa.

Employee Payroll Tax Contributions

In South Africa , the typical estimation for employee payroll contributions cost is around 1%.

Individual Income Tax Contributions

Income tax in South Africa is 'Pay As You Earn'. The individual income tax ranges from 18% to 45%. Income tax is calculated according to progressive rates.

Pension in South Africa

No mandatory pension contributions in South Africa.

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in South Africa, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in South Africa:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In South Africa, employers hiring foreign nationals must navigate a structured system of work permits and visas. The primary visa types are the General Work Visa, Critical Skills Work Visa, Intra-Company Transfer Work Visa, and Corporate Visa. Each requires specific documentation, fees, and compliance with the Department of Home Affairs regulations. Employers must ensure proper sponsorship processes, meet eligibility criteria, and support their employees through the application and renewal processes to remain compliant.

Mandatory Leave Entitlement in South Africa

The annual leave entitlement in South Africa is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In South Africa

South Africa has 12 mandatory national public holidays in a year.

Paid Time Off in South Africa

South African employees who work 5 days a week are entitled to a minimum of 15 days of annual leave. This is accrued in the following way:

• Annual leave is accrued over a leave cycle, which is a period of 12 months commencing from the first day of employment or the end of the previous leave cycle.
• The accrual rate for annual leave is typically 1.25 days per month for a five-day week worker (1 day for every 17 days worked) and 1.5 days per month for a six-day week worker.

Maternity Leave In South Africa

Eligible employees can take up to 16 weeks of maternity leave. Leave can begin at any time from 4 weeks before the expected date of birth or on a doctor recommended date. Maternity leave is unpaid, unless stipulated otherwise in the employment agreement.

Paternity Leave In South Africa

Eligible employees can take up to 10 days of parental leave.

Sick Leave In South Africa

Sick leave in South Africa is paid depending on the following:

• South African employees who work 5 days a week are entitled to 10 days of sick leave.
• Employees who work 6 days a week are entitled to 12 days of sick leave.
• During the first 6 months of employment, an employee is entitled to one day paid sick leave for every 26 days worked.

Parental Leave In South Africa

South Africa has recently introduced a shared parental leave policy. In October 2024, the Johannesburg High Court ruled that both parents are entitled to share four months of parental leave. This landmark decision allows fathers to share the previously exclusive four-month maternity leave with their partners.

In South Africa, employers are mandated to provide several key benefits to their employees, including paid time off (PTO), maternity leave, and contributions to the Unemployment Insurance Fund (UIF). Supplemental benefits, such as health insurance and a 13th-month bonus, are also commonly offered to enhance employee satisfaction and retention.

Employers in South Africa are required by law to offer mandatory benefits to their employees, which encompass paid time off (PTO), maternity leave, and contributions to the Unemployment Insurance Fund (UIF). To attract and retain top talent, many employers also provide supplemental benefits such as health insurance and a 13th-month bonus. It is crucial for employers to ensure compliance with South African labor laws when designing their benefits packages to avoid legal complications and promote a supportive work environment.

In South Africa, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in South Africa is running as it should.

Termination Process in South Africa

In South Africa, any terminations of employment must be for a fair reason and in accordance with a fair process. An employee may be terminated fairly for one of the following reasons:

• Misconduct
• Poor work performance
• Ill health
• Operational requirements

Notice Period in South Africa

In South Africa, unless a longer notice period is stipulated in the Employment agreement, the legislative minimum notice period is:

• 1 week for employees with less than 6 months service
• 2 weeks for employees with 6 to 12 months service.
• 4 weeks for employees with 12 or months service

Severance in South Africa

Severance pay is only mandatory when terminating an employee for operational requirements. Minimum severance pay is equal to 1 weeks pay for every completed year of service.