South Africa Employer of Record & Payroll
Our Services in South Africa Employer of Record:
1. Employer of Record (EOR) Services:
Our EOR services cover all aspects of tax compliance for your business in South Africa. We act as the legal employer for your workforce, managing payroll, tax withholding, and other administrative tasks. This ensures that your organization operates in full compliance with South African labor and tax laws.2. Employee Tax Compliance:
We assist your employees in meeting their tax obligations. Our experts provide guidance on tax filing, deductions, and exemptions to ensure that your staff complies with South Africa’s tax regulations.3. Payroll Services:
Our comprehensive payroll services simplify your company’s tax responsibilities. We calculate and process payroll, including tax withholdings, ensuring that your employees are paid accurately and on time.4. Tax Planning and Advisory:
Stay ahead of South Africa’s ever-changing tax laws with our expert advisory services. We provide strategic guidance to optimize your tax position, reducing liabilities while remaining compliant.5. Reporting and Documentation:
We manage all tax-related paperwork, including employee tax forms and annual returns, to guarantee accurate and timely submissions.Benefits of Our South Africa EOR Services:
1. Legal Compliance:
Eliminate the risk of non-compliance with South African labor and tax laws, protecting your business from potential legal issues.2. Focus on Your Core Business:
By outsourcing your tax compliance needs to us, you can concentrate on your company’s growth and day-to-day operations.3. Cost-Efficiency:
Avoid the costs associated with hiring additional in-house staff to manage tax compliance tasks. Our services provide a cost-effective solution.4. Expertise:
Our experienced professionals are well-versed in South Africa’s complex tax regulations and can guide your business toward optimal tax strategies.5. Peace of Mind:
Rest easy knowing that your tax compliance needs are in capable hands, ensuring that you can maintain a worry-free, productive work environment.What is the main language spoken in South Africa:
There are 11 official languages in South Africa including: English, Afrikaans, Zulu, Xhosa, Northern Sotho, Southern Sotho, Venda, Tswana, Tsonga, Swati, and Ndebele.
What type of employment contracts can you offer in South Africa:
Through our employer of record (EOR) solutions in South Africa, we can offer the following types of employment contracts:
- Fixed Term [not for tasks that are permanent in nature; duration must be specified]
- Indefinite term [most common in South Africa]
Contracts and Offer Letters must:
- Be in writing
- Be in the official local language and the local currency
- Include salary/compensation, benefits and termination requirements
Full-time Employees:
- Have specific working terms and conditions
- Can be eligible for organizational perks and/or other benefits
- Tend to be more focused [as only one employer] and familiar with the specific business – due to e.g. ongoing company training etc.
- Probationary period is 3 months [standard] to 6 months [maximum]
- Probationary period must be a “reasonable time period” within the job context
WHAT INCOME IS TAXABLE IN South Africa:
South Africa has a residence-based system, which means residents are – subject to certain exclusions – taxed on their worldwide income, irrespective of where their income was earned. Non-residents are, however, taxed on their income from a South African source.
Any individual who works and lives in South Africa for more the 183 days a year will be considered a Tax Resident and is subject to local taxes in South Africa. The Taxable income is made up of salary, allowances, bonuses and benefits are considered part of taxable income and will be subject to PAYE. Certain benefits such as car allowances, medical insurance, pension or retirement annuity may apply for tax reduction in part or full.
What income is exempt from taxes in South Africa:
- Remuneration of certain non-resident employees of foreign states employed in South Africa
- Certain pensions received from sources outside South Africa by both residents and non-residents
- Lump-sum payments from qualifying life policies
- Special uniform allowances received by an employee
- Employment relocation allowances received by an employee
- Foreign employment income received by resident employees (specific time periods applicable)
- Bona fide scholarships and bursaries
- Amounts of alimony received by a spouse under a judicial separation or divorce, and
- Amounts received or accrued on tax-free investments subsequent to the introduction thereof on 1 March 2015.
Standard working hours: Overtime to be paid in South Africa?
In South Africa, the standard working hours are generally 45 hours per week for employees who work more than 5 days a week or 9 hours per day for those who work fewer than 5 days.
Mandatory contributions in South Africa?
Employee
| Contribution Type | Contribution Rate | Threshold |
|---|---|---|
|
Unemployment Insurance Fund |
1% of monthly remuneration |
Capped at the Monthly Threshold |
|
Skills Development Levy |
Not applicable (paid by employers) |
Not applicable |
|
Pension and Provident Funds |
Varies based on fund or scheme |
Based on employee’s earnings and fund rules |
Employer
| Contribution Type | Contribution Rate | Threshold |
|---|---|---|
|
Unemployment Insurance Fund |
1% of employee’s monthly remuneration |
Capped at the Monthly Threshold |
|
Skills Development Levy |
1% of total remuneration |
Not applicable |
|
Compensation for Occupational Injuries and Diseases Act (COIDA) |
Varies based on industry and employee’s earnings |
No specific threshold |
Social
| Contribution Type | Employers | Employees |
|---|---|---|
|
Unemployment Insurance Fund |
1% of employee’s monthly remuneration |
Capped at the Monthly Threshold |
|
Skills Development Levy |
Not applicable (paid by employers) |
Not applicable |
|
Compensation for Occupational Injuries and Diseases Act (COIDA) |
Varies based on industry and employee’s earnings |
No specific threshold |
What is the Maternity and Paternity policy within South Africa:
Maternal leave:
- In most cases:
- 16 weeks minimum [4 consecutive months minimum]
- Ideally minimum of 4 weeks to be pre-birth*
- Minimum of 6 weeks to be post birth*
- Medical certification may be required here*
Paternal leave:
- No specific policy in place currently
- 3 days per year [not cumulative] of family responsibility leave may be allocated here
Unpaid leave may also be negotiated [normally ±10 days]
Do I need to pay a mandatory bonus annually OR is it discretionary in South Africa:
In South Africa a performance bonus is not statutory or mandatory, but is normally paid for good performance, hence it is common for this to be incorporated as a condition of employment.
Such a bonus would usually be a percentage of the employee’s renumeration, and paid annually.
What Gratuity / Severance payments do you need to provide for South Africa:
In South Africa, employers are not legally obligated to offer a fixed gratuity or severance payment to employees upon the termination of their employment. However, it’s important to note that severance pay may be applicable in certain circumstances, such as when a company shuts down or undergoes significant workforce reductions. The specific amount of severance pay is typically determined through negotiations between the employer and employee or outlined in collective bargaining agreements within specific industries. It is advisable to carefully review employment contracts, agreements, and consult with professionals to ascertain whether severance pay applies to a particular situation.
Mandatory Probation period of South Africa
In South Africa, there is no set probation period required by law. It varies depending on the agreement between the employer and the employee. During this time, both parties assess if the job is a good fit before committing long-term. It’s important to have clear terms in the employment contract for everyone’s understanding.
What are the Corporate and VAT / Sales tax rates in South Africa?
Corporate Tax Rates: 27% [in general]
VAT / Sales Tax Rates: 15% [on most goods and services]
Public Holidays in South Africa:
- January 1 - New Year's Day
- January 2 - New Year's Day
- March 21 - Human Rights Day
- April 7 - Good Friday
- April 27 - Freedom Day
- May 1 - Workers' day
- June 16 - Youth Day
- August 9 - National Women's Day
- September 24 - Heritage Day
- September 25 - Heritage Day
- December 16 - Day of Reconciliation
- December 25 - Christmas Day
- December 26 - Day of Goodwill
What Industries we support in South Africa:
- Non-Governmental Organization’s (NGO) / Non- profit
- Engineering & Construction
- Government / Development Agencies
- Oil & Gas
- FMCG & Manufacturing
- Private Equality, Finance, Insurance & Banking
- Mining
- Agriculture
What Double Tax Treaties are in place in South Africa:
The information provided above is for an “informative decision” and may change at any given time without prior notice. We always suggest speaking to one of our Sales Consultants before engaging in country.
Contact Us:
Let us handle your South Africa employer and employee tax compliance needs, so you can focus on what matters most – growing your business. Contact us today to learn more about our Employer of Record services and how we can tailor a solution to suit your specific requirements.
Don’t let tax compliance concerns hinder your business’s success. Partner with Africa Deployments for comprehensive South Africa Employer of Record services and experience the freedom to thrive in the South African market.
