South Africa is Africa’s most developed business hub, with an English-speaking workforce and low statutory employer costs. Several changes now shape how employers hire and manage staff. New Employment Equity targets took effect on 15 April 2025. A new Code of Good Practice on dismissal applied from 4 September 2025. On 3 October 2025 the Constitutional Court gave all parents a shared parental leave of 4 months and 10 days. From 1 March 2026 the national minimum wage rose to R30.23 an hour and tax brackets were indexed for inflation. The BCEA earnings threshold rose to R269,600.90 a year on 1 May 2026.
Currency: South African Rand (R ZAR)
Language: English (business); 12 official languages
Regulatory Authority: Department of Employment and Labour, SARS, the Unemployment Insurance Fund, the Compensation Fund and the CCMA
Last updated: October 2026
R30.23 per ordinary hour from 1 March 2026, including farm and domestic workers. Sectoral determinations and bargaining council agreements can set higher minimums in some industries.
Written particulars of employment are required from day one. For employees below the BCEA earnings threshold, fixed-term contracts longer than 3 months are treated as permanent unless there is a valid reason, such as a project or temporary cover.
No fixed length in law; it must be reasonable for the job, and 3–6 months is common. The 2025 Dismissal Code requires guidance and feedback during probation.
About 2–3% on top of gross salary for statutory costs (UIF, SDL and COIDA). About 10–25% once the usual retirement fund and medical aid contributions are included, which are common but not mandatory.
21 consecutive days of annual leave a year (15 working days for a 5-day week). Sick leave of 30 days per 3-year cycle and 3 days of family responsibility leave a year.
Up to 45 hours a week and 9 hours a day for a 5-day week. These limits apply to employees earning below R269,600.90 a year.
UIF 1% (capped at R177.12 a month), Skills Development Levy 1% of payroll if annual payroll exceeds R500,000, and COIDA at an industry rate on earnings up to R668,000 a year.
PAYE at progressive rates from 18% to 45% for 2026/27. Employees under 65 pay no tax on income up to R99,000 a year.
1.5 times the normal rate, by agreement, up to 10 hours a week. Sunday work pays double (1.5 times if Sunday is a normal workday), and public holiday work pays double. Applies below the earnings threshold.
Notice is 1 week (up to 6 months' service), 2 weeks (up to 1 year) or 4 weeks (over 1 year). Severance of at least 1 week's pay per completed year applies only to retrenchments.
All amounts due, including accrued leave pay, must be paid by the next ordinary pay day, and no later than 7 days after it. Issue a certificate of service and UIF documents.
Employers with 50 or more employees must prepare an Employment Equity plan aligned to their sector's 2025–2030 targets and report each year by 15 January. All employers must avoid unfair discrimination.
2025–2026 updates
Give every employee written particulars of employment on their first day, covering role, hours, pay, leave, notice and deductions, and explain them in a language the employee understands. For employees earning below the BCEA threshold, use fixed-term contracts longer than 3 months only for a valid reason, as they are otherwise treated as permanent. Set a reasonable probation period, usually 3–6 months, and give regular feedback during it, as the 2025 Dismissal Code requires.
Register for PAYE, UIF and SDL with SARS, and register with the Compensation Fund for COIDA. Each month, pay PAYE, UIF and SDL through the EMP201 return by the 7th of the following month. Submit the EMP501 reconciliation twice a year and the COIDA Return of Earnings annually. UIF is 1% each from employer and employee, capped at R177.12 a month each. SDL is 1% of payroll and does not apply where annual payroll is R500,000 or less.
Employees get 21 consecutive days of annual leave a year, 30 days of sick leave per 3-year cycle on a 5-day week, and 3 days of family responsibility leave. Since October 2025, all parents share 4 months and 10 days of parental leave. This leave is unpaid by law, but employees can claim UIF benefits. Retirement fund and medical aid are not mandatory, but most competitive packages include them. There is no statutory 13th cheque.
Every dismissal needs a fair reason, such as misconduct, poor performance or operational requirements, and a fair procedure under the 2025 Dismissal Code. Notice ranges from 1 to 4 weeks depending on service, and pay in lieu is allowed. Retrenchments require consultation and at least 1 week’s pay per completed year of service. Employees can refer unfair dismissal claims to the CCMA within 30 days. Pay all final amounts, including accrued leave, promptly and issue a certificate of service.
Under POPIA, register an Information Officer with the Information Regulator, process employee data lawfully, restrict cross-border transfers and report data breaches. Respond to data requests within 30 days under the 2025 Regulations. Employers with 50 or more employees must consult staff, prepare an Employment Equity plan aligned to sectoral targets and report each year. Keep retirement fund contributions correct under the two-pot system, which splits new contributions between savings and retirement components.
Download the full South Africa Payroll & Employment Guide 2026 (PDF)
For detailed hiring information, customised employment guidance or support with your South Africa hiring, please reach out to our team. We provide compliant employment contracts, payroll processing and tax remittance, social security registration and reporting, benefits administration, and onboarding and offboarding support. See our EOR pricing: flat from $349 per employee, per month.
FAQ
Yes. An Employer of Record such as StratEdge Global becomes the legal employer and handles contracts, payroll, PAYE, UIF, SDL and compliance, while you direct the day-to-day work. For employees below the BCEA earnings threshold, the arrangement and any fixed-term use should be structured carefully.
Statutory costs are low, at about 2–3% of gross salary: UIF 1% (capped at R177.12 a month), SDL 1% and COIDA. Most competitive packages also include retirement fund and medical aid contributions, taking the total to about 10–25%.
Notice is short, at up to 4 weeks, but every dismissal needs a fair reason and a fair procedure. Employees can refer claims to the CCMA within 30 days. Retrenchments require consultation and at least 1 week’s pay per completed year of service.
Planning and reporting duties apply only to employers with 50 or more employees. They must consult staff, prepare a plan aligned to their sector’s 2025–2030 targets and report each year by 15 January. Every employer must avoid unfair discrimination.
