Guide to employment, payroll and benefits in

South Africa

Rivermate offers complete payroll, benefits and compliance services for

South Africa

01. Overview

Last updated: 

August 19, 2021

Currency
South African Rand
Capital
Cape Town
Ease of doing business
67
Language
Afrikaans
Population
59308690
GDP growth
1.32%

02. Grow your team in

South Africa

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

South Africa

, particularly if you don't have established local relationships. You can hire employees in

South Africa

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

South Africa is the southernmost country in Africa, formally known as the Republic of South Africa. It has a population of over 59 million people and a land area of 1,221,037 square kilometers, making it the world's 23rd most populous nation. Pretoria is the executive capital, Bloemfontein is the judicial capital, and Cape Town is the legislative capital. Johannesburg is the largest city in the nation. Approximately 80% of South Africans are of Black African descent, with ethnic groups speaking a number of African languages. Africa's largest populations of European, Asian, and multiracial descent make up the remaining population. It is bordered on the south by 2,798 kilometers of Southern African coastline that stretches along the South Atlantic and Indian Oceans; on the north by Namibia, Botswana, and Zimbabwe; on the east and northeast by Mozambique and Eswatini; and on the west by the enclaved nation of Lesotho. It is the most populated country completely south of the equator, as well as the southernmost country on the Old World's mainland. South Africa is a biodiversity hotspot, with a wide range of biomes, plants, and animals. South Africa is a multiethnic country with many different cultures, languages, and religions. The constitution recognizes 11 official languages, the fourth-highest number in the world, reflecting the country's pluralistic nature. Zulu and Xhosa are the two most widely spoken first languages, according to the 2011 census. The next two are of European origin: Afrikaans, which evolved from Dutch and is spoken by the majority of Colored and White South Africans; English, which represents British colonization and is widely used in public and commercial life. The nation is one of the few in Africa that has never had a coup d'état, and it has held daily elections for nearly a century. The vast majority of black South Africans, however, did not gain citizenship until 1994. During the twentieth century, the black majority attempted to gain more autonomy from the country's dominant white minority, which had a significant impact on the country's recent history and politics. Apartheid was introduced by the National Party in 1948, formalizing prior racial segregation. The repeal of oppressive laws began in the mid-1980s, after a long and often violent struggle by the African National Congress and other anti-apartheid activists both within and outside the country. In the country's liberal democracy, which consists of a parliamentary republic and nine provinces, both ethnic and linguistic groups have had political representation since 1994. South Africa is known as the "rainbow nation" because of its multicultural diversity, particularly in the aftermath of apartheid. It is a developing country. It is a newly industrialised country, according to the World Bank, with the second-largest economy in Africa and the 33rd-largest in the world.

04. Public holidays

05. Types of leave

Paid time off

In South Africa, the minimum statutory annual leave is 15 workdays, which are earned monthly at a rate of 1.25 days each month.

Public holidays

South Africa recognizes thirteen public holidays.

Sick days

Sick leave in South Africa is calculated on a 36-month period.The employee is entitled to one day of sick leave for every 26 days worked during the first six months of employment. The employee receives the following benefits beginning on the first day of the seventh month:If they work a 5-day work week, they will get 30 days off, and if they work a 6-day work week, they will have 36 days off.If an employee works Monday through Friday and one Saturday every two weeks, he or she will have 33 days off, however this does not apply to individuals who work fewer than 24 hours each month. Sick leave would have to be negotiated during the employment contract negotiations in this situation.The overall number of sick days the employee is able to take is calculated by subtracting the number of sick days taken from these figures.The number of sick days resets at the conclusion of the 36–month cycle.A medical certificate is required whenever an employee is absent for more than two days in a row. If an employee is sick from Friday to Monday, it is not considered consecutive days of sick leave, and the individual is not required to show a medical certificate.Employees who are on sick leave are entitled to full pay and cannot be fired as long as they obtain a medical certificate.

Maternity leave

A woman is entitled to four months of unpaid maternity leave in South Africa.This right might start as early as four weeks before the due date. It is feasible to start the leave early if the lady is unable to work owing to her medical condition.Employers are not required to compensate employees for maternity leave. Instead, if contributions to the Unemployment Insurance Fund have been made, a claim can be made from the Maternity Benefit Fund (UIF). The employee might get up to 60% of their usual income from this benefit, which is provided for a period of 121 days.

Paternity leave

In South Africa, paternity leave is enclosed in parental leave.

Parental leave

Fathers are entitled to ten days of parental leave, which is reimbursed at 66 percent of their usual wage by the UIF. In order to take parental leave, the father must notify his employer in writing at least one month before the child's projected due date. Adoptive dads are also eligible for this leave.

Other leave

An employee who is enrolled in school can take two paid days per topic each year, up to a total of ten days per year, at the option of the employer. Any extra absence taken for the purpose of studying after the ten days must be taken as unpaid leave.Workplace injury leave: If a person gets injured at work and needs to take more than four days off, they are entitled to 75 percent of their usual wage for up to three months. After three months of unpaid absence, the employee must file a claim with the Compensation Fund and earn 75 percent of their regular wage.In addition, the employer has the right to request payment from the Compensation Fund for the first three months.

06. Employment termination

Termination process

Employers cannot dismiss an employee at will in South Africa, but they can dismiss an employee for the following reasons: misconduct, which is typically given without notice; incapacity (health or poor performance), which is typically given after the employee has been given multiple opportunities to meet his or her performance standards but still fails; and due to the company's operational requirements.


When an employee and employer wish to part ways peacefully, a separation agreement is sometimes used.

Notice period

Both the employee and the employer are required to adhere to the same notice period, which is proportional to the length of the employment relationship. A minimum of one week's notice is required for employment of less than six months. For employment lasting more than six months but less than a year, at least two weeks' notice is required. A notice period of at least four weeks is required for employment lasting more than one year. For farm and domestic employees, the notice periods specified above must be adhered to and cannot be shortened. However, if specified in a collective bargaining agreement for other types of employees, the notice period of four weeks may be reduced to no less than two.

Severance pay

Employees who are terminated for poor performance or misconduct are not entitled to severance pay. If an employee is let go due to operational needs, the company is required to pay one week's severance pay for each year worked.

Probation period

The common length of probationary periods in South Africa is three months.

07. Working hours

General

Work is typically 45 hours per week and nine hours per day for five or fewer days per week. The limit is eight hours per day for employees who work more than five days per week. It may be increased by up to 15 minutes per day but not more than 60 minutes per week for employees whose duties require them to interact with the public.

Overtime

Weekly overtime is permitted up to ten hours. Employees earning less than the threshold (R 205,433.30 per year) must be compensated at 150 percent of their regular wage for weekday overtime and at 200 percent for Sunday overtime.


Overtime pay is not required for employees who earn more than the threshold (R 205,433.30 per year). Employers, on the other hand, cannot require employees to work overtime without compensation unless the employee consents.

08. Minimum wage

General

The minimum wage in South Africa is ZAR 21.69 an hour.

09. Employee benefits

General

South Africa has no public health system. While employers are not required to provide health insurance to their workers, it is a popular perk. An company may either offer a group plan or provide an employee a stipend to buy a plan. In South Africa, there are now two kinds of insurance: (1) medical assistance programs and (2) private health insurance. South African professionals are used to one of the two systems and understand how to get insurance.

A National Health Insurance (NHI) scheme is presently under testing and will be phased in between 2016 and 2025. Employer contributions may be required in the future as this program develops.

In South Africa, private plans usually include personal accident coverage and retirement benefits in addition to health insurance.

In South Africa, meals, refreshments, and meal and refreshment vouchers are an optional taxable benefit.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

South Africa

to hire a team takes time, money, and effort. The labor law in

South Africa

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

South Africa

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

South Africa

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

South Africa

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.