Employer of Record in South African Republic

General Information

• Currency: South African Rand (ZAR)
• Employer Taxes: 2%
• Payroll Frequency: Monthly/Bi-Weekly/Weekly
• Employee Costs: 1%
• Capital: Pretoria
• Fiscal Year: 1 March – 28 February

Main Aspects of the Labour Code

Minimum Wage

General: The minimum wage in South Africa is 27.58 ZAR an hour.

Payroll

Payroll Cycle: In South Africa, the payroll cycle is not fixed by law and is generally determined by the employment contract. This agreement, made between the employee and employer, can specify a payroll cycle that is monthly, weekly, or bi-weekly.

13th Salary

13th-month salary payments are customary in South Africa and should be paid in December of each year.

Working Hours

General: In South Africa, the standard working week cannot exceed 45 hours, with a maximum of 9 hours per day.

Overtime: If employees exceed the standard working hours, overtime pay is mandatory. The maximum allowed overtime is up to 10 hours per week. Overtime is compensated at 150% of the regular rate for employees earning below 205,433.30 ZAR annually for weekday hours and 200% for weekend hours.

Employees earning above 254,371.67 ZAR annually are not entitled to overtime pay. Overtime compensation cannot be included as part of a pre-determined salary in the employment contract.

Leave

Annual Leave (Vacation):

In South Africa, a full-time employee is entitled to a minimum of 21 consecutive days (15 working days) of paid annual leave. This leave accrues at a rate of 1.25 days per month (1 day for every 17 days worked). Unused leave can be carried over to the following year.

Public Holidays

When a public holiday falls on a Sunday, the following Monday shall be a public holiday in lieu.

Sick Days

Sick leave in South Africa is paid at 100% of the employee’s regular rate and is granted on a three-year cycle: 30 days for a 5-day workweek and 36 days for a 6-day workweek.

During the first six months of employment, employees accrue sick leave at a rate of 1 day for every 26 days worked. From the seventh month onward, employees are eligible for the full sick leave entitlement. Any sick leave taken during the first six months will be deducted from the total 3-year cycle.

Unused sick leave does not carry over and resets at the beginning of a new cycle.

For absences exceeding two consecutive days, a medical certificate is required.

Maternity Leave

Under South African labor law, a pregnant employee is entitled to four months of unpaid maternity leave. This leave can start up to four weeks before the expected due date, and the employee must take at least six weeks of leave after childbirth. This applies to all employees unless they work fewer than 24 hours a month.

Employees who have been contributing to the Unemployment Insurance Fund (UIF) may qualify for a maternity benefit of up to 60% of their regular salary, depending on their income and insurance coverage. The maternity benefit is provided for a maximum of 121 days.

A recent High Court ruling in October 2023 mandated that all parents, regardless of gender, should receive four months of parental leave from their employers. This applies to adoptive parents as well, specifically those adopting a child under two years old. While this ruling is still under review, many employers have already begun implementing it.

Paternity Leave

Fathers are entitled to leave through the Parental Leave policy.

Parental Leave

New parents, including fathers, adoptive parents, and surrogates, are entitled to Parental Leave of 10 consecutive calendar days following the birth or placement of their child.

For the adoption of a child under the age of 2, adoptive parents are entitled to 10 consecutive weeks of Adoption Leave. If there is a single adoptive parent, they are entitled to the full 10 weeks. If there are two adoptive parents, only one can take the Adoption Leave, while the other can use the regular Parental Leave.

Commissioning Parental Leave is available for the primary parent who will care for the child under a surrogate motherhood agreement. This leave lasts at least 10 consecutive weeks. If there are two commissioning parents, only one is eligible for the 10 weeks of commissioning parental leave, while the other can take the 10 consecutive calendar days of regular Parental Leave.

All types of Parental Leave are unpaid. However, employees can claim 66% of their earnings from the Unemployment Insurance Fund (UIF), subject to the maximum income threshold, provided they have at least 13 weeks of continuous service.

Other Leave

Study Leave: Employees pursuing education may take up to 2 paid days per subject annually, with a maximum of 10 paid days per year, as determined by the employer. Any additional study-related leave beyond this limit must be taken as unpaid leave.

Work-Related Injury Leave: Employees who suffer a work-related injury and require more than 4 days of leave are entitled to 75% of their regular pay for up to 3 months. After this period, compensation must be claimed from the compensation fund, continuing at 75% of the regular pay. Employers can request compensation from the fund for the first 3 months of leave.

Family Responsibility Leave: Employees are eligible for up to 3 days of paid leave per year for specific family responsibilities, including:

• Birth of their child
• Child’s illness
• Death of:
  • Spouse or life partner
  • Parent or adoptive parent
  • Grandparent
  • Child or adopted child
  • Grandchild
  • Sibling

Exclusions apply to:

• Senior management
• Employees working less than 24 hours per month
• Sales staff who travel and manage their own hours
• Employees engaged in emergency work
• Employees earning above the threshold specified in section 6(3) of the Act

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