Employing in South Africa

Known as the ‘Rainbow Nation’ due to its multiculturalism, South Africa is one of the most promising and vibrant emerging market economies across the world and has immense potential as a global expansion destination. Boasting one of the largest economies in Africa (second to Nigeria), South Africa is also one of the continent’s most industrialised countries, and many multinational companies have a South African branch — particularly in the populous urbanised areas of Cape Town, Johannesburg and Durban.

With a potential market of about one billion people, South Africa serves as a gateway to the rest of the African continent, providing additional market opportunities for the countries along its borders. Several excellent seaports and other entry and access points also create opportunities to reach markets further afield, including South America, Central America, the Far East and South Asia.


Our Expertise

Managing a global workforce in South Africa

Managing a workforce in South Africa poses unique challenges due to its diverse cultural landscape and complex employment laws. With TopSource Worldwide's expertise in global employer services, we ensure compliance with South Africa's Basic Conditions of Employment Act and other relevant regulations. Our services include staying informed about sectoral determinations and adhering to the nation's Income Tax Act, ensuring a smooth operational process for businesses looking to establish or maintain their presence in this vibrant and diverse country.


Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.


Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.


Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 


Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.


Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

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Hear from our clients about our EOR solutions in South Africa

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Client based in Ft Worth, Texas, USA

Personalised Employer of Record services in South Africa

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in South Africa. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your South Africa-based employees.

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End-to-end South African payroll services

Looking to expand into South Africa? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your South African expansion initiatives.

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Global entity management

Venturing into the South African market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in South Africa

Entering the South African market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in South Africa.


South African Insights

Key insights into South Africa's landscape


VAT rates: South Africa has a standard Value Added Tax (VAT) rate of 15%, with some goods and services exempt or subject to a zero-rate.


Ease of Doing Business rank: South Africa ranks 84th in the World Bank's Ease of Doing Business Index, indicating a moderately challenging business environment.


Consumer Confidence Index: As of 2022, South Africa's Consumer Confidence Index was 35.3, reflecting cautious economic sentiment.


Employee maternity/paternity leave: Maternity leave is 4 months, and paternity leave is 10 days, aiming to support new parents in the workforce.


Employee termination period: Standard notice for termination varies but is typically 1 to 4 weeks, depending on employment contract terms and duration.


Employee salary pay date: Wages are commonly paid monthly, with specific pay dates stipulated in employment contracts and subject to labour laws.


Bank holidays: South Africa observes public holidays, including New Year's Day, Human Rights Day, and Christmas, with a total of 12 public holidays in a year.

An Overview of Employing in South Africa

Salary Information

Salary currency

South African rand (ZAR).

Salary pay date

The usual standard pay dates are either the 25th or the 28th of the month for monthly salaries.


There are no statutory annual increases. If the employee is entitled to a bonus or commission, their eligibility should be stated in the contract and amounts should be detailed in the offer letter.

Social security system

The South African Social Security Agency (SASSA) is a public scheme independent of employment relationships. There are no monthly or annual contributions to this fund by the employer or employee.

Employer Information

Unemployment Insurance Fund (UIF)

Employers are required to register all employees with the Unemployment Insurance Fund (UIF). (Unemployment Insurance Act, 63, 2001). The monthly contribution for UIF is 2% of an employee’s gross salary per month.

The employer must deduct 1% of an employee’s gross salary per month and must match this contribution with an additional 1%. This is capped at R14, 872 per month or R178,464 annually. For employees who earn more than this amount, the contribution is calculated using the maximum earnings ceiling amount. Therefore, the maximum contribution which can be deducted for employees who earn more than R14,872 per month is R148.72 per month.

Skills Deployment Levy (SDL)

An employer is liable to pay 1% of an employee’s gross salary (including any leave or overtime pay, bonuses, commissions or lump-sum payments). This must be paid to SARS on submission of a monthly employer declaration (EMP201) within seven days after the end of the month.

Employer cost
Employer contribution
Employee contribution
Monthly threshold
Maximum monthly contribution

Public Healthcare

South Africa operates a two-tier healthcare system: a large public sector (subsidising up to 40% of healthcare costs) and a private sector.

Private Healthcare

It’s recommended that all employees take out a private healthcare plan, as all medical expenses are payable upfront.

TopSource Worldwide can offer a range of coverage through a local provider. It should be noted:

  1. The medical aid policies are taken out in the employee’s name.
  2. If the client wishes to pay for the medical aid, it’ll be considered a benefit, and this will be taxed.
  3. With regard to covering the costs for dependents, there’s no particular standard in South Africa. However, it’s not uncommon for companies to cover 50% of the total medical aid  contribution.

Contractual Provisions

Probationary Period

There’s no prescribed time limit set for a probation period. The probation period must be reasonable, given the circumstances of the job.

The preferred practice in South Africa is six months probationary period for a new employee and three months probationary period for an internal transfer. Extensions to the probationary period are permissible if performance is not satisfactory.

Being on probation doesn’t give an employee any specific legal rights. An employee can be dismissed with one week’s notice while on probation.

Working Hours

The maximum normal working time allowed (section 9 BCEA) is 45 hours weekly. This is nine hours per day (excluding lunch break) if the employee works a five-day week, and eight hours per day (excluding lunch break) if the employee works more than five days per week.

It’s important to note that employees earning in excess of the earnings threshold are excluded from the BCEA provisions which regulate ordinary hours of work, overtime, compressed working weeks, averaging of hours of work, meal intervals, daily and weekly rest periods, Sunday pay, pay for night work and pay for work on public holidays.

The current threshold in effect from 1 March 2021 is an annual amount of R211,596.30.


There are no mandatory pension contributions in South Africa. The employee can choose to have a private pension which would be under their own personal remit and would remain separate to their employment.

Rest breaks

Meal and rest breaks are unpaid and are, therefore, not included in the calculation of working hours. The statutory meal break is one hour, but by agreement between the employee and employer, this may be reduced to 30 minutes.

Workers’ compensation (employer liability)

Employers are required to pay into the Workers’ Compensation Fund once a month to provide compensation for workers who get injured at work, contract occupational diseases, or for death as a result of these injuries or diseases. The contribution is solely the employer’s responsibility and money mustn’t be deducted from a worker’s salary.

The annual assessment fee is calculated on workers’ earnings and an assessment tariff based on the risks associated with the type of work being done.
Assessment fee = total workers’ pay ÷ 100 x assessment tariff. Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.

The amount of R506, 473.00 per employee per annum is the maximum amount on which an assessment of an employer shall be calculated on with effect 1 March 2021.


Overtime can only be required when there’s an agreement between the employer and the employee, and such agreement may not require the employee to work more than 12 hours in any day. An employee may not work more than 10 overtime hours in a week cycle.


A contract may not be terminated without a justified reason as outlined by the Labor Relations Act (LRA). The Basic Conditions of Employment Act (BCEA – Section 37) outlines the minimum notice period based on the length of service.

Length of service
Minimum notice period
> Six months
One week
< Six months > one year
Two weeks
One year +
Four weeks

An employer may not require an employee to take annual leave owed during the notice period. This must instead be paid out as part of the employee’s salary.

Holiday entitlement

An employee will accrue 1.25 days per month of paid holiday. This is calculated from the start of their employment and recalculated every 12 months. Employees are entitled to carry holiday forward to the following year. An employer must grant annual leave within six months after the end of the annual leave cycle.

South Africa has 12 public holidays as determined by the Public Holidays Act (Act No 36 of 1994). This act determines that whenever any public holiday falls on a Sunday, the Monday following it shall be a public holiday.

Public holidays

1st January
New Year’s Day
21 March
Human Rights Day
15 April
Good Friday
18 April
Family Day
27 April
Freedom Day
1 May
Workers’ Day
16 June
Youth Day
9 August
National Women’s Day
24 September
Heritage Day
16 December
Day of Reconciliation
25 December
Christmas Day
26 December
Day of Goodwill

Sick Leave

In the first six months of employment, an employee will accrue one day of paid sick leave for every 26 days of paid work. Thereafter, during each sick leave cycle of 36 months’ employment, the employee shall be entitled to an amount of paid sick leave equal to the number of days the employee normally would normally work during a period of six weeks. For the duration of sick leave, the employee is to be paid in full.

Maternity & Paternity Leave

Pregnant employees are required to take maternity leave by law. They may not return to work within six weeks after the birth unless cleared by a medical professional. Employees are entitled to four months’ (121 days) unpaid maternity leave in total.

Employers in South Africa are not legally obliged to pay their employees during maternity leave; however, it’s common practice for employers to provide some maternity benefits.

All employees who have contributed to UIF (Unemployment Insurance Fund) are eligible for maternity benefit to cover any shortfall from their salary. The UIF benefit is between 38–60% of an employee’s gross salary (up to a maximum of R14,872)

Parental Leave

Parental leave entitles an employee to 10 days of consecutive leave for the purposes of birth, adoption and surrogacy.
This leave is unpaid from the date of birth or when an adoption order is granted. Employers are not obliged to pay their employees during this period. Employees will be able to claim UIF for the 10 consecutive days (eight working days) and are entitled to an amount up to 66% of their regular earnings, subject to the maximum income threshold as per the Unemployment Insurance Act.

It’s important to note that the new amendments as stated above are gender neutral (both male and female employees may apply for and be granted the leave).

Family responsibility leave (employer liability)

Family responsibility leave covers special leave (to care for a child) and compassionate leave.

100% of the employee’s daily earnings is paid for up to three days each year.

To qualify for this leave, the employee must have been employed for a minimum of four months and must work more than four days a week for the same employer.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in South Africa

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about South African employment solutions

What is an Employer of Record in South Africa?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in South Africa. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in South Africa?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in South Africa. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in South Africa?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in South Africa. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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