South Africa

Employer of Record (EOR) in South Africa

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in South Africa . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for South Africa.

Employer of Record people
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Currency
South African Rand
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Capital
Cape Town
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Region
Africa
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Language
Afrikaans
Hire remote employees
Population
59308690
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GDP
$349 billion
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GDP growth
0.0132
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Ease of doing business
67
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World GDP share
0.0043

1. Grow your team in South Africa with Rivermate as your Employer of Record (EOR) / PEO

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 Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

South Africa, formally known as the Republic of South Africa (RSA), is Africa's southernmost nation. The country has a population of about 60 million people and occupies an area of 1,221,037 square kilometers (471,445 square miles). Pretoria, Bloemfontein, and Cape Town serve as the executive, judicial, and legislative branches of government of South Africa, respectively. Johannesburg is the biggest city. Black South Africans account for around 81 percent of the population. The remaining population is made up of the continent's biggest groups of European (White South Africans), Asian (Indian and Chinese South Africans), and Multiracial (Coloured South Africans) heritage.

South Africa is limited to the south by a coastline that stretches along the South Atlantic and Indian Oceans; to the north by Namibia, Botswana, and Zimbabwe; and to the east and northeast by Mozambique and Eswatini, as well as the enclaved nation of Lesotho. It is the southernmost nation on the Old World's landmass and the most populated country totally south of the equator. South Africa is a biodiversity hotspot, having a diverse range of biomes, plant and animal species.

South Africa is a multiethnic society with a diverse range of cultures, languages, and faiths. The constitution recognizes 11 official languages, the fourth-highest number in the world, reflecting its multicultural character. According to the 2011 census, the two most widely spoken first languages in South Africa are Zulu (22.7 percent) and Xhosa (20.7%). (16.0 percent ). The two following are of European origin: Afrikaans (13.5 percent) arose from Dutch and is the primary language of the majority of Coloured and White South Africans; English (9.6 percent) embodies the heritage of British colonization and is widely used in public and business life. The nation is one of the few in Africa that has never seen a coup, and regular elections have been conducted for over a century. However, until 1994, the great majority of black South Africans were denied the right to vote.

Throughout the twentieth century, the black majority strove to assert more rights over the dominating white minority, which played a significant influence in the country's recent history and politics. Apartheid was introduced by the National Party in 1948, formalizing earlier racial segregation. The repeal of discriminatory legislation started in the mid-1980s, after a protracted and often violent campaign by the African National Congress (ANC) and other anti-apartheid activists both within and outside the nation. Since 1994, all ethnic and linguistic groups in the country's liberal democracy, which consists of a parliamentary republic and nine provinces, have had political representation. South Africa is often referred to as the "rainbow nation" to represent the country's multicultural richness, particularly in the aftermath of apartheid.

South Africa is an upper-middle power in international affairs, with major regional influence and membership in the Commonwealth of Nations and the Group of 20. It is a developing nation, with a Human Development Index rating of 114th. The World Bank has classed it as a recently industrialized nation, with the second-largest economy in Africa and the 33rd-largest in the world. In addition, South Africa boasts the most UNESCO World Heritage Sites in Africa. South Africa's government accountability and quality of life have significantly improved after the end of apartheid. However, violence, poverty, and inequality persist, with about a quarter of the population jobless and living on less than US$1.25 per day in 2008.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in South Africa is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

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.

5. Employment termination

There is no information about employment information for this country.

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.

Probation period

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

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.

6. Working hours

There is no information about the working hours for this country.

General working schedule

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.

7. Minimum wage

There is no information about the minimum wage for this country.

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

8. Employee benefits

There is no information about the employee benefits for this country.

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.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

A South African (SA)-resident business is liable to corporate income tax (CIT) on all of its global revenue, regardless of its source. Non-residents are taxed on their SA-sourced income.

In South Africa, the CIT rate for both resident and non-resident corporate income is a flat 28 percent. This rate was lowered to 27 percent in the February 2021 National Budget, with effect for tax years beginning on or after April 1, 2022.

Small business entities (businesses with only natural people as members/owners and with a gross revenue of less than 20 million South African rand [ZAR]) pay the following rates of tax:

0% on the first ZAR 87,300 of taxable income.

7% on taxable income above ZAR 87,300 but not exceeding ZAR 365,000.

21% on taxable income above ZAR 365,000 but not exceeding ZAR 550,000.

28% on taxable income exceeding ZAR 550,000.

Certain sectors, such as mining and long-term insurance, have special CIT rates.

Individual income tax

Residents of South Africa are taxed on their global income. In South Africa, credit is given for international taxes paid. Non-residents are taxed on their income earned in South Africa. Residents and non-residents are subject to the same tax rates.

Individuals are taxed at a progressive rate. The following are the tax rates for the fiscal year beginning 1 March 2021 and concluding 28 February 2022:

For an income from 0 to ZAR 216,200, the tax rate is set at 18 percent.

For an income between ZAR 216,201 AND ZAR 337,800, the tax rate is set at 26 percent.

For an income between ZAR 337,801 AND ZAR 467,500, the tax rate is set at 31 percent.

For an income between ZAR 467,501 AND ZAR 613,600, the tax rate is set at 36 percent.

For an income between ZAR 613,601 AND ZAR 782,200, the tax rate is set at 39 percent.

For an income between ZAR 782,201 AND ZAR 1,656,600, the tax rate is set at 41 percent.

For an income beyond ZAR 1,656,601, the tax rate is set at 45 percent.

VAT, GST and sales tax

VAT is an indirect tax levied mostly on domestic consumption of goods and services as well as products imported into South Africa. The tax is intended to be mostly paid by the final customer or purchaser in South Africa. It is charged at two rates: a regular rate and a zero rate (0 percent). With effect since 1 April 2018, the normal VAT rate is 15%. (prior to that date, the standard rate was 14 percent ).

In South Africa, very few commercial transactions are exempt from VAT. Businesses registered with SARS as'vendors' collect the tax on all taxable supplies along the manufacturing and distribution chain. Non-vendor sales or supply are exempt from VAT.

10. VISA and work permits

There is no information about VISA and work permits for this country.

There are numerous sorts of temporary work visas available to any foreigner who desires to work in South Africa. General employment, inter-company transfer, highly skilled migrant, or business entrepreneur are examples of these.

South Africa offers numerous employment prospects for talented people in different professions due to its developing economy and industrial sector, and as mentioned in South Africa's published vital skills lists, foreigners are increasingly finding work in South Africa. However, there are fewer job opportunities in South Africa for unskilled or semi-skilled workers.

There is also a focus on recruiting entrepreneurs in South Africa, especially where this would result in: money being brought into South Africa from overseas; the production of items for export; and the employment of South Africans.

The several forms of South African work visas are determined by the applicant's employment/financial/skills situation.

The following are two of the most often sought visas.

The Critical Skills Work Visa is a kind of work visa that requires certain skills. The South African Department of Home Affairs releases a list of vital talents in need by the government on a regular basis. Applicants with these abilities are eligible to apply for a Critical Skills Work Visa. It is not necessary to have a job lined up before applying for a visa, but the applicant must demonstrate that they have the necessary skills. The visa is valid for five years, although it is possible to seek for permanent residence in South Africa under certain circumstances.

The Corporate Visa. A Corporate Visa is granted to a corporate entity, allowing the company to hire a set number of foreign workers for a period of three years.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

In South Africa, an employment contract might be either indefinite or fixed duration. Employers must present the employee with a document that includes the parties' contact information, a short description of the job, position, working hours, salary details, leave, notice period, and the date of completion if the employment is for a set term. The paper must be written in a language that the employee understands. Otherwise, the employer must explain its terms and conditions in a way that the employee fully comprehends.

With Rivermate being your Employer of Record (EoR) in South Africa, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

Fixed-term contracts are not intended for long-term jobs. Fixed-term contracts are often for work that is for a set length of time essential to accomplish the business's temporary demands, such as for a certain event or the completion of a specific job or project.

Payment currency

South African Rand

13.Opening a subsidiary in South Africa

There is no information about the working hours for this country.

How to set up a subsidiary

If you set up a subsidiary in South Africa on your own, you must be prepared for some circumstances that may impact your choice. The nationality of your headquarters, as well as any existing trade agreements you have, may have an influence on your firm. Some enterprises, such as those who export and import food or use heavy infrastructure in South Africa, need additional approvals, licenses, or other regulations.

The country has 11 official languages, with English and Afrikaans being the most widely spoken. English is the official business language, and it is also used in commerce and in public. In a corporate setting, most employers use English, however multiple languages may be used in different places.

Foreign nationals wishing to establish a South African subsidiary must deposit 2.5 million ZAR in the firm. Those cash must first be moved to South Africa from your current bank account in another country. After six months to a year of operation, you must provide confirmation that your company employs South African nationals.

Although there are many other types of subsidiaries that may be formed, one of the most frequent is a private business. Its setup instructions are as follows:

1. To register the company, file Articles of Incorporation.

2. Fill out a Memorandum of Incorporation

3. Fill out a Notice of Incorporation

4. Create a bank account

5. Sign up for VAT and other taxes.

6. Register with the Department of Labor for Unemployment Insurance and Occupational Injuries and Diseases Compensation.

7. Make an application to the District Council

Reserving your business name is an optional step. A business may register with or without a name under the Companies Act of 2008. If you register without a reserved name, your registration number becomes the name of your firm. Although this is a shorter procedure, it is still advised that you get a proposed name checked, authorized, and reserved.

Subsidiary laws

The subsidiary laws of South Africa vary depending on the company type you choose. You have the choice of forming a private business, a public company, a close corporation, a partnership, a joint venture, or a branch. Close businesses and firms are independent of their components and operate with little responsibility.

Close companies need up to 10 shareholders, each of whom must be an individual rather than an organization. South African law recognizes both private and public enterprises as incorporated organizations. These corporations take roughly two months to form, and there are no special criteria for local shareholders or directors.

Branches and overseas firms must register as external companies with the South African Registrar of Companies in Pretoria and are governed by the Companies Act of 1973. These firms do not need a local board of directors, but your branch or overseas company will require a resident South African to take any notifications and services of process. These businesses also need the services of a licensed local auditor.

13. Why choose Rivermate as your Employer of Record / PEO in South Africa

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 (EOR) 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 (EOR) / PEO solution.

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