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Mercans CountryIntel ® South Africa Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in South Africa

Resource-rich and with access to a large local market and growing regional market, South Africa is an attractive country boasting robust infrastructure and efficient logistics. It remains the destination of choice for many multinationals (over 180 Fortune Global 500 are present here). Foreign companies who seek to tap into the local talent pool see favorable market access to global markets, thanks to the African Continental Free Trade Area.

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Doing Business in South Africa

The Global Innovation Index ranks South Africa as number one in innovation in Africa. Backed by a sophisticated banking sector, the country is also a financial hub in Africa. Businesses will find South Africa fast becoming a tech hub in Africa, offering technical expertise and finance support for local businesses.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in South Africa is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 9.00 am to 4:00 pm from Monday to Friday and on Saturday (8:00 am to 1:00 pm)

Working Week

The standard working week is from Monday to Friday from 8:00 am - 5:00 pm

Labor Law

One of the primary sources of law is the Labor Relations Act, which provides protection for employees against unfair dismissal. Minimum conditions of employment are regulated by the Basic Conditions of Employment Act (BCEA).

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Main Industries

Mining, automobile manufacturing, metalworking, technology

GDP Growth

1.9%

Dates & Numbers

dd/mm/yyyy

Official State Name

the Republic of South Africa

Population

59.3 million

Capital

Pretoria

Currency

South African Rand (ZAR)

Internet Domain

.za

International Dialing Code

+27

Major Languages

Afrikaans, English, Xhosa, Zulu, Southern Sotho, Northern Sotho, Tswana, Tsonga, Venda, Swati, Ndebele

South Africa
Pretoria, ZA
11:22 am, December 2, 2022
26°C
scattered clouds

Payroll

The national minimum wage is an instrument used to lift more South Africans out of poverty. Adjustments are made to provide exceptions or different rates for several worker groups including domestic workers, farmworkers and those employed in a public works program.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 5 years

Reports

Employees receive paid annual leave of 15 days

Annual Leave

Employees receive paid sick leave of 10 days

Sick Leave

An employee is entitled to four months of unpaid maternity leave and 10 days of unpaid paternity leave

Maternity & Paternity Leave

An employee’s employment can be terminated with 14 days’ notice

Employee Termination

This salary is customary by law and payable at the end of the year

13th month salary

23.19 ZAR an hour

Minimum Wage

Overtime payment is set at 1.5x the employee's ordinary rate of pay for the weekdays and 2x for the work completed on weekends

Overtime

Employees paid monthly are entitled to 7 days’ severance pay for each year of employment

Severance Pay

Tax and Social Security

South African residents are taxed on their worldwide income. Non residents are taxed on their South African sourced income and the same rates of tax apply to both residents and non residents. The social security system is not comprehensive.

Tax

Enterprise businesses can access the LBC (Large Business Center) for one-stop services to meet their tax obligations. Small businesses can access the SARS (South African Revenue Service) website for advice and support.

28%

Corporate Income Tax

45%

Personal Income Tax

15%

Sales Tax

15%

VAT

Social Security

An employee’s contribution is withheld by the employer and both employer and employee are obligated to contribute towards unemployment insurance.

2%

Social Security Rate

1%

Social Security Rate for Employers

1%

Social Security Rate for Employees

Employment Law

Generally, employers must comply with anti-discrimination laws and respect a candidate’s right to privacy.

Employment Agreement

Most employees are employed under employment contracts. The BCEA stipulates that employers must provide written particulars of employment conditions once an employee commences work. Contracts of employment may be for either a fixed or indefinite term.

Working condition

The minimum conditions of employment are regulated by the BCEA and cover working time, leave, record-keeping, termination of employment and more. Generally, an employee may not work for over 45 ordinary hours per week, total working hours per day not to exceed 12.

Leaves

Parental leave is provided for 10 consecutive days (unpaid) on the birth of a child. This can also apply if the child is legally adopted or placed by a court in an individual’s care. Employees are generally granted at least three working weeks of paid annual leave.

Employment termination

Dismissals for certain reasons are automatically unfair. Some other dismissals may be unfair if the employer fails to prove that the reason is fair based on the individual’s conduct or capacity or based on the employer’s operational requirements.

7 days

Minimum notice period for terminating an employee

13 days

Total number of public holidays

45

Working hours per week

3 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Foreign workers cannot generally be employed unless a relevant visa has been granted such as a general work visa or critical skills work visa.

Residency permits

Stays for less than 90 days can be allowed on a business visitor’s visa, which may be extended for a further 90 days. Longer placements require a temporary residence work visa, a general work visa, critical skills visa or corporate worker visa.

Work Permit Validity

Five years

Required Documents

passport valid for at least one month after the applicant’s intended return date

proof of the applicant’s employment in South Africa

Medical documentation, such as vaccination records and radiology reports

Bank statements of the applicant to demonstrate sufficient funds

Proof of medical insurance for the duration of time to be spent in South Africa

Compliant, reliable, error-free and touchless payroll in South Africa

Build the best team and hire top talent compliantly in South Africa. Get in touch with South Africa payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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