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How to hire and pay employees in South Africa
Slasify
Jun 21, 2025
Before Hiring in South Africa
Discover the global hiring and employment landscape in South Africa—strategically positioned in the African continent and providing access to the Southern African Development Community, South Africa is a prime choice for investors entering the broader African market.
Explore the employment essentials including payroll, personal income tax, statutory contributions, annual leaves, minimum wage, terminations, visa requirements, and more. Gain valuable compliance insights for a smooth entry into the dynamic South Africa market with Slasify's global premium HR platform.
At a Glance
| Capital | Cape Town, Pretoria and Bloemfontein |
| Currency | South African Rand (ZAR) |
| Payroll Cycle | Monthly |
| Minimum Wage | ZAR 28.79 per hour |
| Annual Leave | 21 days |
| Personal Income Tax | 18%–45% |
Personal Income Tax
Employees shall be liable to pay taxes on their income if they earn over a certain tax threshold that varies depending on their age, as follows:
| Age | Tax Threshold (ZAR) |
|---|---|
| Under 65 | 95,750 |
| 65 and older | 148,217 |
| 75 and older | 165,689 |
Taking into account the above tax threshold, their income will be taxed progressively in accordance to the following table:
| Taxable Income (ZAR) | Progressive Tax Rate (%) |
|---|---|
| Up to 237,100 | 18 |
| 237,101–370,500 | 26 |
| 370,501–512,800 | 31 |
| 512,801–673,000 | 36 |
| 673,001–857,900 | 39 |
| 857,901–1,817,000 | 41 |
| Over 1,817,000 | 45 |
Local Taxes
There are no local taxes on employment income in South Africa.
Statutory Contributions
The contributions made for the Unemployment Insurance Fund and the Compensation Fund shall be calculated based on the employee's remuneration as follows:
| Contribution Base | |
|---|---|
| Unemployment Insurance Fund | Up to ZAR 17,712 per month or ZAR 212,544 per year |
| Compensation Fund | Up to ZAR 597,328 per year for the period March 1, 2024 to February 28, 2025 |
Employer Contributions
| Contribution Rate | Note | |
|---|---|---|
| Unemployment Insurance Fund | 1% | |
| Skills Development Levy | 1% | Small employers with an annual payroll of less than ZAR 500,000 are exempted |
| Compensation Fund | Varies | Actual rate varies across industries |
Employee Contributions
| Contribution Rate | |
|---|---|
| Unemployment Insurance Fund | 1% |
Payment of Wages
Employers may pay their employees daily, weekly, fortnightly or monthly, provided that the remuneration is paid no later than 7 days after the completion of the pay period.
Minimum Wage
Effective March 1, 2025, the minimum wage in South Africa is set at ZAR 28.79 per hour.
Statutory Bonus
There is no statutory bonus in South Africa.
Termination
For dismissals to be fair, the employer must follow the proper procedure and prove that they have a justified reason for the dismissal. The employer must prove that their dismissal decision is backed by reasons related to the employee's conduct or capacity, or based on the employer's operational requirement.
Generally, the employer is expected to conduct an investigation to establish grounds for dismissal. The merits of each case shall be judged in accordance with any internal rules, performance standards or applicable collective agreements.
| Reason for dismissal | General overview |
|---|---|
| Misconduct | It is not appropriate to dismiss an employee for their first offence, except if the misconduct is especially serious and made the employment relationship intolerable. |
| Incompetence | Employees must be given the appropriate evaluation and guidance, and reasonable time to improve. Only when other remedies have been exhausted can the employer proceed with the dismissal. |
| Ill-health or injury | Employers must consider all the possible alternatives short of dismissal. The degree of incapacity is relevant to the fairness of any dismissal |
A detailed guideline of what a proper dismissal process should be like can be accessed under Schedule VIII of the Labor Relations Act.
Employers who seek to dismiss their employees due to operational requirements shall consult the workplace forum, the employees affected or the relevant trade union, as the case may be.
Notice Period
In the event of a termination of an employment relationship, the terminating party shall observe the following notice period or pay the other party in lieu of notice:
| Length of service | Notice period |
|---|---|
| 6 months or less | 1 week |
| More than 6 months, but no more than year | 2 weeks |
| 1 year or more | 4 weeks |
In any case, no agreement can be made where the employee's notice period is longer than the employer's notice period.
Severance Pay
Employees who are dismissed due to an employer's operational requirement or in terms laid out under Section 38 of the Insolvency Act are entitled to a severance equivalent to at least a week's remuneration for each completed year of service. However, an employee who unreasonably refuses to accept their employer's offer of alternative employment is not entitled to receive any severance.
"Operational requirement" here refers to the requirement based on the economic, technological, structural or similar needs of the employer.
Probationary Period
An employer may require newly-hired employees to serve a probationary period to evaluate their performance before confirming their employment.
There are no explicit regulations surrounding the statutory length of probationary periods, though they should be determined in advance and be of reasonable duration. If the employee's performance is consistently below the employer's standards despite the employer's advice and guidance, they can be dismissed for incompetence.
The dismissal of employees on probation shall be done after the employer has invited the employee to make representations and has considered these representations made.
Work Time Rules
Employees who earn over the annual earnings threshold of ZAR 241,110.59 shall not be beholden to the regulations surrounding working hours covered under this section. More exemption conditions, including for senior managerial employees and the performance of urgent work, are covered under Section 6 of the Basic Conditions of Employment Act.
Standard Working Hours
Ordinary working hours are subject to a weekly maximum of 45 hours and the following daily maximum:
| Maximum ordinary hours per day | |
|---|---|
| Employee works 5 days or less per week | 9 hours |
| Employee work more than 5 days per week | 8 hours |
The daily working hours may, by agreement, be extended by up to 15 minutes per day, but no more than 60 minutes per week, for employees whose work involves serving members of the public.
Break Period
Employees who work continuously for more than 5 hours shall be granted at least a continuous hour of break time for meals. For the purpose of determining an employee's break period entitlement, work is deemed continuous unless it is interrupted by an interval of at least 60 minutes.
These break periods shall be unpaid unless it is interrupted with work, which can only be done if the work cannot be left unattended and cannot be performed by another employee. In addition to the above, any portion of the break period that is in excess of 75 minutes shall be remunerated unless the employee lives on the premises where the workplace is situated in.
Note: A written agreement may be concluded to reduce the break time down to 30 minutes or to dispense with a break time for an employee who works less than 6 hours per day.
Overtime
Any work in excess of an employee's ordinary hours of work is deemed overtime and shall be paid at 150% of their regular wage. Overtime cannot be done without the employee's agreement.
As an alternative to paying the overtime premium, the employer and employee can come to an agreement to either of the following alternatives:
| Option 1 | Normal wage for overtime, plus 30 minutes of paid time off per hour of overtime |
|---|---|
| Option 2 | 90 minutes of paid time off per hour of overtime |
These compensatory time off shall be given within a month of the employee becoming entitled, or within up to 12 months if there is a written agreement to that effect.
Weekly Rest Days
Employees shall be entitled to a daily rest period of at least 12 consecutive hours and a weekly rest period of at least 36 consecutive hours, which unless otherwise agreed, must include Sunday as a day off.
Employees required to work Sundays must be paid at 200% their wage per hour worked or 150% if they ordinarily work Sundays. If an employee works less than their ordinary hours on a Sunday and receive a pay that is less than their ordinary daily wage, they shall be paid at their ordinary daily wage for that Sunday.
As an alternative to paying the above premium, the employee may agree to be compensated with equivalent time off instead.
Note: Work performed on Sundays by employees who do not ordinarily work Sundays shall count towards their weekly overtime maximum.
Holiday and Leave Entitlements
Public Holidays
Public holidays that fall on a day an employee would ordinarily work shall be paid as if they are working that day. There are 13 days of public holiday in South Africa for 2025.
| Holiday | Day |
|---|---|
| New Year's Day | January 1 |
| Human Rights Day | March 21 |
| Good Friday | April 18 |
| Family Day | April 21 |
| Freedom Day | April 27 |
| Freedom Day—observed | April 28 |
| Labor Day | May 1 |
| Youth Day | June 16 |
| National Women's Day | August 9 |
| Heritage Day | September 24 |
| Day of Reconciliation | December 16 |
| Christmas Day | December 25 |
| Day of Goodwill | December 26 |
Employers shall not require their employees to work during public holidays unless there is an agreement stating otherwise, and they shall be paid at least double their usual wage.
Employees working on public holidays that fall on days on which they would not ordinarily work shall be paid their ordinary daily wage, plus any amount earned for the work performed that day.
Annual Leave
Employees shall be entitled to at least 21 consecutive days of paid annual leave for every completed year of service. By agreement, annual leave may be accumulated as follows:
| Option 1 | A day of paid annual leave for every 17 days on which the employee worked or was entitled to be paid |
|---|---|
| Option 2 | An hour of paid annual leave for every 17 hours on which the employee worked or was entitled to be paid |
Annual leave must be taken in accordance with the agreement between the employer and employee or, if there is no such agreement, at a time determined by the employer. In any case, employers must grant their employees annual leave not later than 6 months after the end of the annual leave cycle.
Sick Leave
Employees are entitled to paid sick leave equivalent to the number of days they would normally work in a 6-week period.
An employee's entitlement to sick leave is calculated per sick leave cycle, i.e. a 36-month period of employment immediately following an employee's commencement of work or the completion of the previous leave cycle. It is important when determining an employee's sick leave entitlements that the following is observed:
| Employee's first 6 months of employment | 1 day of sick leave per 26 days of work |
|---|---|
| Employee's first sick leave cycle | Sick leave entitlement during the cycle can be reduced by the days of sick leave taken in their first 6 months of employment |
Employers are not required to pay their employees if they have been absent for more than 2 consecutive days or on more than 2 occasions in an 8-week period without producing any medical certificate upon request.
Maternity Leave
Employees are entitled to at least 4 consecutive months of maternity leave, which may, unless otherwise agreed, commence at any time from 4 weeks before the expected date of birth. In any case, no employee shall work for 6 weeks after the birth of their child unless they have been certified fit to do so by a medical practitioner.
In the event of a miscarriage during the third trimester or when the employee bears a stillborn, they shall be entitled to 6 weeks of maternity leave from after the miscarriage or stillbirth.
Parental Leave
Employees shall be entitled to at least 10 consecutive days of parental leave, which can start on the day their child is born. This leave can be taken when adopting a child as well, though it only applies to one adoptive parent, while the other takes the 10-week adoption leave.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Adoption Leave | Unpaid | 10 weeks | An employee may be entitled to either this leave or the 10-day parental leave. This leave shall be taken consecutively and adoption benefits will be determined in accordance to the provisions of the Unemployment Insurance Act. Adoption leave only applies to the adoption of a child below 2 years old. |
| Commissioning Parental Leave | Unpaid | 10 weeks | The same conditions regarding adoption leave shall apply mutatis mutandis to this leave as well, which can be taken by a commissioning parent under a surrogate motherhood arrangement from the day the child is born. |
| Family Responsibility Leave | Paid | 3 days per year | For employees with at least 4 months of service and who work at least 4 days per week. This can be taken when the employee's child is sick or in the event of a family member's death. |
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