Have questions? Ask us!

Employing in South Africa

At a glance

Employment in South Africa

Foreign companies that employ workers in South Africa face several challenges and must adhere to the legal and regulatory framework that is in place. Most notably there are registration and withholding requirements for a range of tax and benefit payments. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well. Our guide explains South African policies on leave, termination and payment of benefits.

Read more

Payroll & Tax in South Africa

Complying with local payroll and tax requirements is essential for a company doing business in South Africa. Any business that employs at least one employee must register with the South African Revenue Service (SARS) for Pay As You Earn (PAYE) and Standard Income Tax on Employees (SITE). Businesses employing staff must also pay a gross revenue or salary-related levy to the district council.  Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

Read more

Immigration / Work Permits in South Africa

Foreign workers are required to have the proper visas and work permits in South Africa, as established by immigration laws. This often requires incorporation, capitalization and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly. Applications for work permits for self-employment can only be lodged at the South African Consulate in the applicant’s country of origin.

Read more

Incorporation

There are several business structures available for incorporation in South Africa, and each has advantages and disadvantages. In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity. Our guide has a comparison of the time and cost for incorporating standard company structures including Branch Office, and full Company.

Read more

GEO Solutions or DIY Employment in South Africa?

GEO Solutions or DIY Employment in South Africa?

Companies entering South Africa must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or South Africa Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a South African entity established that can run payroll.

The processes for registering the company/branch itself appear relatively straight -forward, low-cost and accessible thanks to a centralized online service. However somewhat counterbalancing this is the tax and welfare registrations, which are more complex and appear to be mostly up to the company to organize. In particular, a local ‘council levy’ is required but the process depends on the local district.

A DIY approach will typically take up to 2 months in South Africa until there is a properly incorporated company ready to run payroll, and can have a significant cost if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in South Africa. Companies expanding into South Africa can contract with Shield GEO to employ and payroll their staff on their behalf in South Africa. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in South Africa

Payroll South Africa
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis. Income tax and social security (UIF) are deducted at source and paid to the South African tax authorities. Payroll must be run in South African Rand (ZAR) which is prone to fluctuation so foreign exchange must be considered when funding the payroll in a different currency.

The World Bank estimates it takes employers in South Africa 50 man days per year to ensure compliance with payroll / labour taxes.

 
Grossed income Tax Rate (%)
0-174,550 18%
174,550-272,700 25%
272,700-377,450 30%
377,450-528,000 35%
528,000-673,100 38%
673,100+ 40%
Tax Returns Supplied

Yes

Corporate Tax Requirements

Tax year 1st March to end February

Businesses must register with SARS as a tax payer and submit an annual tax return 12 months after the end of the relevant tax year.

Businesses are also required to supply provisional tax returns every six months and pay tax based on estimated figures for that period.

Employers Social Security and statutory contributions

Unemployment Insurance Fund (UIF). Employers contribute to the fund at a rate of 1% of the employee’s remuneration up to earnings of ZAR 178,464

Note than an expatriate’s employment income is normally exempt from UIF, subject to certain conditions being met.

Employees Social Security and statutory contributions

Unemployment Insurance Fund (UIF). Employees contribute to the fund at a rate of 1% of the employee’s remuneration up to earnings of ZAR 178,464.

Note that an expatriate’s employment income is normally exempt from UIF, subject to certain conditions being met.

Insurance requirements

Shield GEO covers employees under their Professional Indemnity Policy. Private Medical Insurance is not compulsory but is recommended.

Corporate Income Tax Rate

Corporate income tax rate is 28%

Payroll Tax

N/A

Sales Tax

14%

Withholding Tax

15%

Other Tax

N/A

Work Permits
Can Sponsor Work

Yes, Shield GEO is able to sponsor foreign workers on South African General Work Permits which allow them to work in South Africa. As the Employer of Record, Shield GEO handles all of the formalities and employment requirements in South Africa. The client maintains responsibility for day to day employee management.

Work Permit cost

USD $2500

Work Permit processing time

45 – 65 days

 

Work Permit process

Shield GEO’s South African entity must initially apply for an SAQA evaluation which takes 2-3 weeks.

Then the candidate must lodge the Work Permit application in person at the South African Consulate in their country of residence. The processing time is 30 days (Consulate dependent). Once the application is approved the employee can then enter South Africa to commence their assignment.

Documentation required (some are nationality dependent: CV, passport copy, 2 passport photos, medical report, radiological report, police clearance certificate, application form.

Can Work Permit be processed in country

No

Switch Business Visa to Work Permit?

No

Can Spouse work on dependent visa?

No

Business Visas
Can do Business Visa

Yes

Business Visa Cost

USD $400 USD

Business Visa processing time

5-10 days Consulate Dependent

Others
Can supply private health care

Yes on request

Can assist opening bank accounts

Yes

+1 877 457 7691
Chat Now
  • Twitter
  • Linkedin

Subscribe

to our monthly Global Mobility newsletter