Employer of record in South Africa: costs, rules and how to hire

Written particulars are due when employment begins, and the BCEA requires the employer to explain them in a language and manner the employee understands. That second half is a real obligation rather than a courtesy. What decides the substance is the sector: a bargaining-council agreement covering the client's sector and area can set terms and benefits above the statutory floor.

Put the offer and employer responsibilities in writing

The particulars include the employer, role, workplace, start date, hours, wage, overtime terms, benefits, pay frequency, deductions, leave, notice or end date, and applicable agreements, updated when terms change. The BCEA chapter excludes work of less than 24 hours a month, and TES workers have an express written-particulars protection.

Fixed-term and part-time work

Under LRA section 198B, a fixed term or successive terms lasting more than three months need work of limited duration or another justifiable reason, stated in writing, and an unjustified term is treated as indefinite employment. Coverage excludes earnings above the threshold and certain small or new employers and legally permitted contracts, though those exceptions do not remove all employment rights.

Where section 198B applies, fixed-term employees serving more than three months generally must not receive less favourable treatment than comparable permanent staff without justification, and a qualifying project contract exceeding 24 months can require one week's remuneration per completed year on expiry, subject to collective terms and the statutory alternative-employment exception. Have the provider assess part-time rights and any applicable exceptions before copying a full-time contract with fewer hours.

Probation needs a reasoned duration

The September 2025 dismissal code prescribes no universal three-month probation, so determine a reasonable duration in advance based on the job and the time needed to assess suitability. Give appropriate guidance and consider the employee's representations before dismissal or extension; probation removes no protection against unfair dismissal.

Confidentiality and work product

Ask the EOR how confidentiality, intellectual-property ownership and any assignment to your business are documented, and have role-specific restrictions assessed for enforceability rather than inserting a generic worldwide non-compete. Define access removal and return of company information at the end of the assignment.

Misclassification risk, and the presumption below the threshold

South Africa gives you a presumption that does the work for the employee, and it is tied to the earnings threshold this page already uses. A contractor label does not decide employment status: control over the work or the hours, integration into the organisation, economic dependence and who supplies the equipment all matter. At or below the earnings threshold, specified factors create a rebuttable presumption of employment, and higher pay does not automatically make someone an independent contractor. Source: the approved South African contractor guidance, checked 18 September 2026.

Both halves of that last sentence matter. Below the threshold you are rebutting a presumption rather than arguing from a blank page. Above it you have no presumption working against you and no protection either, because the ordinary tests still apply and a well-paid person who is integrated into your organisation and economically dependent on you is still an employee.

What a hirer does about it: run the four factors above against the arrangement before the engagement, and pay particular attention to integration and economic dependence, which are the two that most contractor arrangements fail and the two that a contract cannot draft away.

The presumption above is in the statute, and now that I have the official text I can quote it rather than paraphrase it. Until the contrary is proved, a person who works for or renders services to any other person is presumed, regardless of the form of the contract, to be an employee if any one or more of seven factors are present: the manner of work is subject to another person's control or direction; the hours of work are; the person forms part of the organisation they work for; they have worked for that other person for an average of at least 40 hours a month over the last three months; they are economically dependent on them; they are provided with tools of trade or work equipment by them; or they work for or render services to only one person. The presumption does not apply to a person earning above the amount the Minister determines under section 6 (3) of the Basic Conditions of Employment Act. Source: Labour Relations Act 66 of 1995, section 200A, text published on gov.za, checked 18 September 2026.

Any one factor is enough, which is the part hirers misread. A person who works only for you, or who uses your laptop, is inside the presumption before anyone argues about control, and it is then yours to rebut. I have not found a South African government source setting out a penalty schedule for a misclassification finding, so I am not quoting one.

Seven things catch out foreign employers here, and the first can transfer the employment relationship to you without anyone signing anything. The others are mostly about reading 2026 proposals as though they were already law. Check each against the actual employer, employee and start date.

Resolve these points before the offer

Each row names something to confirm before a number or a date is agreed.

Liability runs both ways: a temporary employment service and its client can be jointly and severally liable for breaches of the BCEA, applicable bargaining-council agreements, sectoral determinations and binding awards, so check pay, leave, benefits, safety and the provider's evidence of compliance before the hire starts.

From 1 May 2026, workers earning above R269,900.90 a year are excluded from specified BCEA working-time protections, which does not remove all employment rights or automatically remove an agreed overtime entitlement, and the threshold also affects protections for temporary-service, fixed-term and part-time workers under the LRA. On the pending changes, the labour department was still describing the 2026 labour-law amendments as proposed on 11 August 2026, so two-week severance, new shift-cancellation rules and broader worker categories are not enacted; the September 2025 dismissal code, October 2025 court order and January 2026 benefit-fund enforcement change have separate legal bases.

Employer UIF is 1% of covered remuneration, capped at R177.12 a month per employee, and the skills development levy is normally another 1% of leviable payroll where the employer is liable. That is the whole statutory employer charge before occupational injury cover and any benefit funds. No flat percentage of salary describes every employer's total, because SDL liability and the injury assessment depend on the employing company.

Separate employer charges from employee deductions

The employee separately contributes 1% of covered remuneration to UIF on a monthly base capped at R17,712, so the maximum employee deduction is also R177.12, with PAYE and any valid fund deductions on top. Certain workers, including those working less than 24 hours a month for that employer, are excluded.

SDL is generally 1% of leviable remuneration, and an employer whose total leviable pay to all employees over the next 12 months will not exceed R500,000 is exempt on that basis, with other statutory exemptions also available: check the EOR employing company's payroll rather than only your hire's salary. The employer must also arrange occupational injury and disease cover through the Compensation Fund or the applicable licensed mutual association, so confirm registration, annual returns of earnings, assessments and good standing, and ask for the actual applicable assessment rather than treating it as zero or a universal percentage.

Individual income tax for 2026/27

The SARS schedule below applies to annual taxable income for 1 March 2026 to 28 February 2027, after which payroll applies the relevant rebates, credits and deductions.

The marginal rates are 18%, 26%, 31%, 36%, 39%, 41% and 45%, and the top rate is not charged on the whole salary. The 2026/27 primary individual rebate is R17,820, with additional rebates of R9,765 from age 65 and R3,249 from age 75, and corresponding annual tax thresholds of R99,000, R153,250 and R171,300. Monthly medical-scheme fee credits are R376 for the taxpayer, R376 for the first dependant and R254 for each additional dependant where eligible.

Payroll deadlines and business tax

PAYE, SDL and UIF paid through SARS are normally due within seven days after the month ends, brought forward to the preceding business day where the seventh falls on a weekend or public holiday, with the employer declaring the separate liabilities on EMP201 and completing the applicable reconciliations and employee tax certificates.

The standard company income-tax rate is 27% and standard VAT is 15%, subject to specific regimes, exemptions and zero-rating, and neither is an employee payroll deduction: ask how VAT applies to the provider's actual invoice and get your own South African tax position assessed separately, because using an EOR does not settle it. South Africa's foreign-employment exemption concerns qualifying services performed outside the country by a tax resident, where the first R1.25 million can qualify only when the requirements are met, including more than 183 full days abroad and a continuous period exceeding 60 full days; a foreign payer or a remote-work label does not create it.

The national minimum wage is R30.23 an hour from 1 March 2026, including farm and domestic workers, and allowances, tips and additional benefits do not replace that floor. It is an hourly minimum rather than a statutory monthly salary, which matters when converting a global band. What decides your floor is that rate or a higher applicable sector rate, checked against the employee's actual pattern of work.

Set the salary and pay schedule

The Expanded Public Works Programme has a separate R16.62 hourly rate, and other special schedules may apply. One rule that surprises people: a covered employee who works less than four hours on a day must be paid for four, under BCEA section 9A for earnings below the prescribed threshold, which is a long-standing rule rather than one of the proposed 2026 cancelled-shift protections.

For market context, Stats SA reported average monthly earnings of R29,997 for February 2026 in its first-quarter QES release, published on 30 June 2026. That formal non-agricultural sector average is a broad benchmark rather than a median or a salary quote, and the earnings month differs from the March 2026 survey quarter.

The BCEA permits daily, weekly, fortnightly or monthly pay in South African currency, with remuneration due no later than seven days after the pay period ends or employment terminates, subject to the separate pension-fund exception. Provide the required written pay information on payday, covering gross remuneration, deductions, net payment and relevant hours and rates, and keep working-time and remuneration records for at least three years and written particulars for three years after termination, with limited small-employer exceptions and longer retention for tax and fund records.

Hours, overtime and shift work

Ordinary hours are generally capped at 45 a week for covered workers: nine a day on a week of five days or fewer, eight a day on more than five. A shorter contractual week still governs the hire.

Permitted compressed or averaged arrangements and statutory exclusions need separate assessment, and workers earning above R269,900.90 a year are excluded from specified working-time protections from 1 May 2026. Covered overtime normally needs agreement, is limited to ten hours a week and must not take total work above 12 hours a day, at a usual pay floor of 1.5 times the wage with specified paid-time-off alternatives; a collective agreement can allow 15 overtime hours a week for no more than two months in 12, and an overtime agreement made at the start or in the first three months lapses after a year.

Covered employees working continuously for more than five hours need a one-hour meal interval, reducible by written agreement to 30 minutes or dispensable for a day of under six hours, with ordinary rest of 12 consecutive hours daily and 36 weekly and specified agreed variations. Availability or work during a meal interval can make it paid.

Premium work has its own rules. Covered Sunday work is normally paid at double the wage, or 1.5 times where Sunday is an ordinary working day, with permitted time-off alternatives. Work on a public holiday needs agreement: on an ordinary working day a worker who stays off receives ordinary pay and one who works receives at least double ordinary daily pay or the larger statutory amount, with different rules on a non-ordinary day. For work after 18:00 and before 06:00 the BCEA requires agreement, compensation by allowance or reduced hours, and available transport at each end of the shift, and it sets no universal 1.5-times night rate; regular late-night work also triggers health-information and examination protections.

Annual leave is 21 consecutive days per cycle, which is 15 working days on a five-day week or 18 on a six-day week, and paid sick leave equals six normal working weeks in every 36-month cycle. Those two entitlements are where the real cost of a South African hire sits, and the sick-leave cycle in particular is not an annual allowance that resets. Both have timing rules that decide when they can be used.

Paid annual leave and public holidays

By agreement, leave can accrue at one paid day per 17 days worked or entitled to pay, or one hour per 17 hours, and the leave chapter excludes employees working less than 24 hours a month for that employer. Leave must be granted no later than six months after its annual cycle ends, cannot ordinarily be replaced with cash while employment continues, and a public holiday falling on an ordinary workday during leave does not consume that day's entitlement.

South Africa has 12 recurring public holidays plus an additional Monday holiday when one falls on a Sunday. For 2026 that means Monday 10 August, plus the separately proclaimed local-election holiday on Wednesday 4 November, giving 14 calendar dates in this year's list rather than 14 extra weekdays off for every work pattern.

Sick leave and family responsibilities

The six-week entitlement is 30 days on a five-day week or 36 on a six-day week across each 36-month cycle, and during the first six months accrual is one paid day per 26 days worked, deductible from the first cycle. It is emphatically not a fresh 30-day entitlement each year.

The employer can request a medical certificate for an absence of more than two consecutive days, or more than two occasions in eight weeks, and need not pay that sick leave if the required certificate is not provided on request. Qualifying occupational injury and disease compensation follows separate rules. Separately, an employee with more than four months' service who works at least four days a week can take three paid family-responsibility days per annual cycle for a sick child or the death of a listed close relative or partner, with reasonable proof allowed, unused days lapsing and collective agreements able to vary the circumstances.

Parental leave after the Constitutional Court ruling

The October 2025 order reshaped parental leave and left the benefit side untouched, which is the trap.

From the 3 October 2025 order, two employed parents share four months and ten days in total, including the birth mother's pre-birth and protected recovery leave, and may agree consecutive or overlapping leave, though each birth parent takes their allocation in one consecutive block. If they cannot agree, divide the remaining leave so each parent's total is as close as possible to half, completed within four months of birth, with the other parent having assumed parental rights and responsibilities. Normally give written start and return dates at least four weeks ahead.

A birth mother may generally start leave four weeks before the expected birth, or earlier when medically certified, and may not work for six weeks after birth unless a doctor or midwife certifies fitness; a third-trimester miscarriage or stillbirth carries six weeks' leave, and hazardous pregnancy or nursing work is prohibited with suitable alternative work required where practicable. The interim order extends the shared arrangement to two qualifying adoptive or commissioning parents, with adoption leave beginning on the order or qualifying court placement, whichever comes first, and commissioning leave at birth; although the court declared the adoption age cap unconstitutional it suspended that declaration and retained the under-two wording, so the proposed under-six rule is not enacted.

The critical caveat: these interim changes concern time away from work and do not require the employer to pay full salary, and the court made no matching interim changes to UIF benefits. Confirm the employee's current benefit eligibility and any contractual salary top-up before promising payment for the whole allocation.

Retirement funds, medical aid and other benefits

Price pension or provident-fund contributions, medical aid, life cover and any annual bonus from the applicable contract, fund rules and sector or bargaining-council agreement, and do not treat a quoted package percentage or thirteenth salary as a universal statutory amount.

Remittance deadlines tightened in January 2026 when the labour department withdrew the old section 34A exemption: deducted benefit-fund amounts must be paid over within seven days of deduction and employer contributions within seven days after the relevant period ends, with shorter fund deadlines still applying. Ask for proof of remittance rather than a payslip showing the deduction. On retirement, the LRA refers to the normal or agreed retirement age for the particular capacity, which is not the qualifying age for an old-age social grant, so check the employment terms, established practice and fund rules before ending employment on age grounds.