South Africa Employer of Record & Payroll

South Africa Employer of Record

Africa Deployments South Africa offers our clients Africa Employer of Record solutions in South Africa covering all of the regions within.  We offer full-time employment or fixed terms contracts based on your requirements in South Africa for local hires.  ADS will issue local work contracts to your contractors.  We will also advise our client’s on best Human Resource (HR) practices when setting up the employee’s locally in South Africa.

ADS takes care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law.  We will also ensure that their salaries are paid on time monthly and issue them with their pay slips.

In addition to our services we can offer you the employee in South Africa, Medical, Disability, Life, and Workmen’s Compensation Insurances.

South Africa is a country on the southernmost tip of the African continent, marked by several distinct ecosystems. Inland safari destination Kruger National Park is populated by big game. The Western Cape offers beaches, lush Winelands around Stellenbosch and Paarl, craggy cliffs at the Cape of Good Hope, forest and lagoons along the Garden Route, and the city of Cape Town, beneath flat-topped Table Mountain.

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 type of leave is allowed in South Africa:

  • Annual leave – 1.25 days minimum per month over a 12-month period totaling 15 days. Leave can be set according to company policy for up to 25 days per annum.

  • Sick leave – entitled to 30 days every 36 months

  • Family responsibility (Compassionate) leave – Employee is entitled to 3 days of paid leave per year

  • Parental leave – 10 consecutive leave days (calendar days not working days) unpaid. Claims through Unemployment Insurance Fund (UIF) can be claimed in advance.

  • Maternity leave – Female employee is entitled to 4 months of maternity leave.

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.

Can you give Fringe Benefits in South Africa:

Yes, you can but keep in mind that certain Fringe Benefits will be subject to employee PAYE tax.

What are the Employer & Employee contributions in South Africa:

  • Employee PAYE progressively up to 45% monthly
  • Unemployment Insurance Fund – Employee & Employer contributions 1% of gross salary, capped at R177.12 monthly
  • Skills Development Levy – Employer contribution at 1% of the Gross salary monthly
  • COIDA (Compensation for Occupational Injuries & Diseases Act) – ranges from 1% to 3.5% depending on the industry risk of the total cost of salary monthly by Employer

Is there Gratuity / Severance payments for termination in South Africa:

There is no Gratuity paid in South Africa.  Severance is applied at 5 days of pay for every one year of service, plus the final salary payment and any leave pay or bonuses promised to the employee (pro-rata).

What Double Tax Treaties are in place in Nigeria:

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