Hire in South Africa

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Last updated at June 15, 2022
overhead view of a city in south africa

Currency

South African Rand (ZAR)
 

Capital

Pretoria

Time Zone

GMT+2

Key Country Facts

Introduction

South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It has been classified by the World Bank as a newly industrialised country, with the second-largest economy in Africa after Nigeria. It is a member of both the Commonwealth of Nations and G20. There are 3 capital cities, Pretoria (executive), Bloemfontein (judicial) and Cape Town (legislative).

Area

It is bounded to the south by 2,798 km of coastline stretching along the South Atlantic and Indian Oceans, to the north by the neighbouring countries of Namibia, Botswana, and Zimbabwe, and to the east and northeast by Mozambique and Eswatini (former Swaziland). It surrounds the enclaved country of Lesotho.

Climate

South Africa has a generally temperate climate because it is surrounded by the Atlantic and Indian Oceans on three sides. The climatic zones range from the extreme desert of the southern Namib in the farthest northwest to the lush subtropical climate in the east along the border with Mozambique and the Indian Ocean. Winters in South Africa occur between June and August.

Culture

South Africa is one of the most culturally diverse countries in the world. A substantial majority of the South Africans still live in the rural areas where cultural traditions have survived. South African culture is not homogeneous but is rather a collection of cultures with different cultures being predominant in different regions. Some of the prominent cultures of South Africa include the Khoikhoi and San culture, Zulu, Ndebele, Xhosa, and Sotho cultures among other cultures.

Religion

Christians account for almost 80% of the population, with a majority of them being members of various Protestant denominations and a minority of Roman Catholics and other Christians. ~15% have no religious affiliation, and the rest of the population identify as Muslims, Hindus, traditional African religion, Judaism or are unspecified.

Official Language

The country has 11 official languages (Ndebele, Pedi, Sotho, Swati, Tsonga, Tswana, Venḓa, Xhosa, Zulu, Afrikaans and English). The majority of South Africans can speak more than one language. Zulu is spoken by 23% of the population followed by Xhosa and Afrikaans at 16% and 14% respectively. English is the primary language used in parliamentary and state discourse.

South Africa HR at a Glance

Employment Law

The Republic of South Africa is made up of nine provinces. Provincial governments have authority to legislate in certain areas but employment law is solely under the purview of the central Government.

The main items of employment legislation are the Basic Conditions of Employment Act (BCEA) and Labour Relations Act (LRA). The BCEA deals with matters including written particulars of employment, payment of wages, working time, rest breaks/periods, annual leave, sick leave, maternity leave, other parenthood-related leave, family responsibility leave and notice periods. The LRA regulates issues such as unfair dismissal, unfair labour practices, trade unions, collective bargaining, strikes, workplace representation, fixed-term contracts and part-time work.

The provisions under the BCEA exclude employees who work less than 24 hours a month.

Other key employment laws are the National Minimum Wage Act, Employment Equity Act (EEA) and Occupational Health and Safety Act.

 

Employment Contract

The employer should conclude a formal, written employment agreement with the worker, which agreement must include specific prescribed particulars (such as remuneration, hours of work and leave entitlements).

South African law recognises both fixed term (limited duration) and open-ended (indefinite) employment contracts and allows for both full time and part time work.

The use of temporary workers through agencies are allowed. However, if such workers are engaged for a period exceeding 3 months, they will be deemed to be employees of the client/employer (and not of the agency).

 

Contract Terms

An employment contract may be written or oral. However, under the Basic Conditions of Employment Act (BCEA), employees who work at least 24 hours per month must be provided a written statement of the main particulars of their employment:

  • employer’s full name and address

  • employee’s name

  • employee’s job role and responsibilities

  • place of work

  • start date of employment

  • ordinary hours and days of work

  • remuneration, or the rate and method of calculating wages

  • rate for overtime work

  • cash payment or other payment in kind that the employee is entitled to

  • frequency of method of wage payment

  • deductions to be made from remuneration

  • leave entitlement

  • notice period in event of employment termination or, if employment is for a specified period, the termination date

  • any period of employment with a previous employer that counts towards the employee’s length of service with the current employer

  • a list of any other documents that form part of the employment contract, indicating its location that should be accessible to the employee

Employers with fewer than five employees need not provide written information on the three last items listed above.

The employer must ensure that the employee understands the contents of the document setting out the written particulars, and where necessary ensure that they are explained to the employee in a language and a manner that they will understand.

Pre-Employment Checks

Medical examination

An employer is permitted to require an applicant to undergo a medical examination if legislation permits or requires the testing (e.g. requirements of the job)

Criminal background check

Can be performed, subject to the individual‘s informed consent, but prior authorisation from the Information Regulator is required if the criminal record check is to be performed by a third party.

Reference and education checks

This is permissible, provided the individual is informed and provides his/her consent.

Probation Period / Trial Period

There is no prescribed limit on the probation period, but the period must be agreed with the employee in advance and be of a reasonable duration.

Termination of employment during the probation period is subject to the contractual termination notice (not less than one week’s notice if the employee has been employed for less than 6 months, and not less than 2 weeks’ notice if the employee has been employed for more than 6 months but less than one year).

Working Hours

Weekly working time must not exceed 45 hours and daily working time must not exceed 8 hours if the work schedule is more than 5 days per week, and 9 hours if the work schedule is 5 days or less per week.

An employee may agree to work a “compressed working week”, whereby they work on five days per week or fewer and may work up to 12 hours on one or more days per week without this being considered overtime. The employee’s normal weekly working time must not exceed 45 hours and they must not work more than 10 hours’ overtime in any week.

Employees must generally be granted a “meal interval” of at least 60 minutes after five hours’ continuous work. Employees must be granted a daily rest period of at least 12 consecutive hours and a weekly rest period of at least 36 consecutive hours. Unless otherwise agreed, the weekly rest period must include Sunday.

Overtime

Employees may work overtime only if they agree to this, or if an applicable collective agreement provides for this. Employees must not work more than 10 hours of overtime per week, though a collective agreement may permit them to work up to 15 hours of overtime for up to two months in any 12-month period. An employee work more than 12 hours in total on any day.

Employees must be compensated for overtime with a pay supplement of at least 50% on top of their normal rate. However, by agreement, an employee can be compensated with:

  • normal pay for overtime hours worked, plus time off in lieu of 30 minutes for every hour worked

  • time off in lieu of 90 minutes for every overtime hour worked but no payment for the overtime hours

Timesheets

The Unemployment Insurance Contributions Act, together with the Income Tax Act, obliges employers to retain records of remuneration paid, tax which has been deducted and unemployment insurance fund contributions and payments for each employee.

These records should be kept for five years from the date of the last entry and must be available for inspection by the South African Revenue Service and Unemployment Insurance Fund officials.

Bonus

There are three common types of bonuses in South Africa – the Christmas bonus (or 13th cheque), annual performance bonus, and production bonus. The law does not mandate an employer to pay out bonuses. However, it may arise out of an established custom or practice, in which case it becomes a condition of employment.

For example, if the Christmas bonus has become expected, it becomes necessary for the employer to inform the employees at least 6 months in advance if it will not be paid in any given year. To only advise employees close to the year end that no bonus will be paid could be considered unfair labour practice.

To avoid this, many employers have done away with the Christmas bonus but incorporated the amount into the employee’s basic salary.

It is important for employees to be mindful of the fact that the payment of bonuses is not guaranteed, and for employers to inform employees within a reasonable period if bonuses will not be paid.

Termination

Employment law does not recognise the concept of the termination of an employee’s employment “without cause” or “at will”, and the employer is always required to act fairly in when terminating a contract both substantively and procedurally, except in specific circumstances justifying summary dismissal, where it is permissible only if the employment is in breach of the employment contract.

There are three recognised fair grounds for dismissal, and for each there are specific procedures that must be followed:

  • Misconduct – the employer should conduct an investigation and disciplinary enquiry

  • Operational requirements (redundancy/retrenchment) – employer and employee should engage in a consultation process to arrive at a consensus

  • Incapacity (ill health, poor work performance, incompatibility) – this could involve providing the employee with assistance or time to improve or seek alternatives

Notice of termination of employment, when given by the employer, must not be given during any period of leave to which the employee is entitled, except sick leave.

Employees are entitled to resign with notice at any time and for any reason. An employee is also entitled to terminate employment without notice if the employer has made continued employment intolerable or risky.

Notice Period

South African law provides for specific minimum periods of notice to be provided to employees as follows:

  • Period of employment 0 < 6 months – 1 week notice
  • Period of employment 6 < 12 months – 2 weeks notice
  • Period of employment >12 months – 4 weeks notice

The same periods would apply to an employee’s resignation if the employment contract does not state notice period. However, the parties can contractually agree to a longer period of notice, which is common for senior management and executives. A collective agreement may also dictate longer periods of notice.

An employee may be paid in lieu of notice.

Redundancy / Severance Pay

If an employee is dismissed for operational reasons, the employer has to pay a minimum of one week’s remuneration for every completed year of service, plus any additional payments agreed upon in the consultation process.

The employer may pay remuneration in lieu of notice, irrespective of who gives notice, but with the employee’s agreement.

Post-Termination Restraints / Restrictive Covenants

Restrictive covenants are in principle enforceable. However, the enforcing party must show that there is a proprietary interest worth protecting and of legitimate business interest (e.g. client relationships, trade secrets). The restraint must be reasonable in its nature, duration and geographical area.

For non-competes, a 12 month period is generally regarded as reasonable.

Other Termination Formalities

When employment ends, the employee is entitled to receive from the employer a certificate of service stating:

  • the employee’s full name

  • the employer’s name and address

  • the dates that employment started and ended

  • the title of the job or a brief description of the work for which the employee was employed at the termination date

  • the employee’s remuneration at the termination date

  • if the employee so requests, the reason for termination of employment

  • a description of any bargaining council or sectoral determination that covers the employer’s business

This entitlement does not apply to employees who work less than 24 hours a month.

Fixed-Term Contracts

A fixed-term contract is one that terminates on the occurrence of a specified event, the completion of a specified task or project, or a fixed date other than an employee’s normal or agreed retirement age.

Fixed term contracts should be used only for specific, justifiable reasons (such as limited duration of the assignment/project, seasonal work, apprenticeships for students/graduates, for temporary increase in volume of work not expected to last more than 12 months), and any extension or renewal be interpreted as continued employment, with any subsequent failure to extend or renew being regarded as an unfair termination.

There are some statutory restrictions on fixed term contracts, namely:

  • It is only applicable for employees who earn below a certain threshold (ZAR 203,433.30 per year)

  • For employers with at least 10 employees (or at least 50 employees for employers who have been in business for less than 2 years)

If fixed-term employment lasts for longer than three months without a proven justifiable reason, the employee is deemed to have an indefinite-term contract with the employer.

If an employee has been employed for longer than 24 months on a fixed-term contract to work exclusively on a specific project with a limited or defined duration, the employer must pay the employee one week’s remuneration for each completed year as severance when the contract expires, unless the employer offers indefinite term employment on the same terms.

Tax and Social Security

Personal Income Tax

South Africa has a progressive rate of income tax that ranges from 18–45% depending on income bracket. Non-residents are subject to the same tax rates as residents. The employer must withhold the income tax due from employees’ pay and remit it to the tax authorities. Withholdings from employment income are made under the Pay-As-You-Earn (PAYE) system.

Taxable Income (ZAR) Tax Rate
0 – 216,000 18% of taxable income
216,201 – 337,800 ZAR 38,916 + 26% of taxable income above ZAR 216,201
337,801 – 467,500 ZAR 70,532 + 31% of taxable income above ZAR 337,801
467,501 – 613,600 ZAR 110,739 + 36% of taxable income above ZAR 467,501
613,601 – 782,200 ZAR 163,335 + 39% of taxable income above ZAR 613,601
782,201 – 1,656,600 ZAR 229,089 + 41% of taxable income above ZAR 782,201
>1,656,601 ZAR 587,593 + 45% of taxable income above ZAR 1,656,601

Social Security

The South African Social Security Agency (SASSA) handles social security payments in South Africa.

SASSA grants are administered alongside insurance-based schemes that cover areas such as unemployment and child benefits. Social security comprises of funding from national income tax and payments into insurance-based funds, overseen by the Ministry of Social Development.

Work-related social security benefits such as unemployment, sickness or maternity pay, are insurance-based and linked to SASSA payments.

There is no obligation on employers to provide pension fund benefits to employees.

Deductions from Pay

Pay as You Earn (PAYE) – This is the tax required to be deducted by an employer from an employee’s payable or paid remuneration.

An employer who is registered with the South African Revenue Services (SARS) for PAYE and/or Skills Development Levy (SDL) purposes, is also required to register with SARS for the payment of Unemployment Insurance Fund (UIF) contributions to SARS. They are payable monthly, together with the income tax that the employer has withheld on its employees’ salaries.

  Employer (%) Employee (%)
Unemployment Insurance Fund 1.0 1.0
Skills Development Levies* 1.0 0.0
Workers’ Compensation Levies** Rate varies by industry. Rate varies by industry.

*Small employers with annual payroll less than ZAR 500,000 are exempt from the levy.

**The Workers’ Compensation Fund sends employers notices of assessments from April every year, informing them how much levy to pay. This is done throughout the year, and it is not possible to predict when employers will receive their notices.

The above rates serve as a broad guideline. Actual rates charged will differ.

Employees

Salary Payment

  • The BCEA states that employers must pay employees their remuneration in South African currency on a daily, weekly, fortnightly or monthly basis. Direct deposit into an account designated by the employee is the most common mode of payment.

  • Any remuneration paid in cash or by cheque must be given to the employee at the workplace (or a place agreed to by the employee) during the employee’s working hours or within 15 minutes of the start or end of those hours, in a sealed envelope.

  • The employer must pay remuneration no later than seven days after the completion of the period for which it is payable, or, where relevant, no later than seven days after the termination of the employment contract.

  • The rules on payment of wages and requirement of payslips do not apply to employees who work less than 24 hours a month.

Payslip

An employer with five or more employees must provide certain information in writing (i.e. a payslip) when paying an employee, mainly:

  • employer’s name and address

  • employee’s name and occupation

  • pay period

  • remuneration in monetary form

  • amount and purposes of any deductions

  • net amount paid to the employee

Where relevant, the following information should also be provided:

  • the employee’s normal and overtime pay rates

  • the number of normal and overtime hours worked during the pay period

  • any hours worked on a Sunday or public holiday during the pay period

  • where the employee is covered by an hours-averaging scheme, the total normal and overtime hours worked during the reference period.

Annual Leave

  • Employees are entitled to at least 21 consecutive days of paid annual leave. The employee is entitled to take the leave in a single block, but may take the leave in one or more shorter periods if agreed upon. Employees are entitled the accrued leave within six months of continuous employment.

  • For fixed term or part-time employees, the annual leave entitlement may be calculated proportionately, e.g. 1 day leave for every 17 days worked (or was entitled to be paid for), or one hour’s leave for every 17 hours worked.

  • During annual leave, employees must be paid their normal remuneration. The general rule is that the employer should pay the employee for the whole period of annual leave before it starts, but by agreement the employee may instead be paid on their normal payday.

  • An employer must permit an employee to take any of their statutory annual leave entitlement during sick leave, maternity leave, parental leave or family responsibility leave, or during a notice period. If a public holiday falls during an employee’s annual leave, on a day when the employee would normally have worked, the employer must grant the employee an additional day of annual leave.

Sick Leave

Sick leave entitlement is based per ‘sick leave cycle’ of 36 months, starting from the date employee commenced employment. For each sick leave cycle, the entitlement is 6 weeks, which translates to 30 days of paid sick leave for employees working a 5-day week and 36 days for employees working a 6-day week.

For the first 6 months of employment, the employee is entitled to 1 day of paid sick leave for every 26 days worked. If an employee uses up their six-week statutory paid sick leave entitlement during a sick leave cycle, any further sick leave before the cycle ends will be unpaid.

Employees must be paid their normal remuneration on the normal payday during sick leave. However, if agreed upon, employees can be paid less than their normal full pay if the number of paid sick leave during a cycle is increased. The pay cannot be less than 75% of normal pay, and at 75% of pay this equates to the employee being entitled to 25% more paid days of leave. This works out to a total of 37.5 days for employees working a 5-day week and 45 days for employees working a 6-day week.

Family Responsibility Leave

Employees who work on at least four days a week and have been in service for at least four months with their employer are entitled to take paid family responsibility leave of up to 3 days per year in the event of their child being sick or death of an immediate family member.

This leave cannot be carried over and employees may take the leave in units of less than one day. The employer has a right to obtain reasonable proof from the employee.

Maternity & Parental Leave

Maternity Leave

Pregnant employees are entitled to maternity leave of at least four consecutive months, which can be taken from any point from four weeks before the expected date of birth or earlier if medically necessary. An employee should not work in the first six weeks immediately after childbirth, and can do so only if medically certified.

An employee who has a miscarriage during the third semester of the pregnancy or bears a stillborn child is entitled to six weeks’ maternity leave after this event, regardless of whether maternity leave has already commenced.

The employee must inform the employer of the intended start and end dates of maternity leave at least four weeks before the leave is planned to commence, or as soon as it is reasonably practicable.

Employers do not need to pay statutory entitlements during maternity leave. If the employee has been in employment for at least 13 weeks before the start of maternity leave, and have contributed to the Unemployment Insurance Fund (UIF), the employee will be entitled to receive all or part of the maternity benefits capped at ZAR 17,712 per month and ZAR 4087 per week.

It is relatively common for employers to pay employees at least part of their wages during maternity leave, and in such cases the UIF maternity benefit tops up the pay from the employer, but to no more than 100% of the employee’s normal remuneration.

UIF maternity benefit is paid based on the employee’s contribution history, where four years of contributions are required for a full four months of maternity benefit entitlement.

Breastfeeding employees are entitled under the BCEA to two unpaid breaks of at least 30 minutes per day to feed their child.

Paternity/Parental Leave

An employee who is the parent of a child is entitled (under the BCEA) to take “parental leave” of at least 10 consecutive days, starting from when the child is born. This is not applicable to the biological mother (who will be entitled to maternity leave).

Other Parenthood-related Leave

An employee who adopts a child under the age of two years is entitled to take adoption leave of at least 10 consecutive weeks, starting when the adoption order is issued or the date when the child is placed with the employee prior to the adoption order being finalised, whichever is earlier.

An employee who enters into an agreement commissioning a woman to bear a surrogate child for the employee, is entitled to take “commissioning parent leave” of at least 10 consecutive weeks, starting when the child is born.

If a child is adopted by a couple, only one parent is entitled to take adoption leave. Likewise, if two employees have entered into an agreement commissioning a surrogacy, only one of them is entitled to take commissioning parent leave. However, the other parent is entitled to 10 days parental leave in connection with the adoption or birth.

The employee must inform the employer of the intended start and end dates of parenthood-related leave at least one month before the leave is planned to commence, or as soon as it is reasonably practical.

Employees who have been in employment for at least 13 weeks and who contribute to the UIF are entitled to receive benefits during all or part of the leave. The benefit is set at 66% of the employee’s normal pay. If the employer pays the employee part of their wages during leave, the UIF benefit tops up the pay from the employer, but to no more than 100% of the employee’s normal remuneration.

Public Holidays

There are 12 public holidays per year. If a public holiday falls on a Sunday, the holiday is transferred to the following Monday.

By agreement, a public holiday may be exchanged for another day off (i.e. employees may work on a public holiday with normal pay and be granted a day off on another agreed date).

Public Holidays

Employees are entitled to paid leave from work on public holidays. Local (Municipal or State) holidays may also apply, depending on where the company is based. If the employer demands the employee to work on a holiday, the remuneration paid with respect to the worked holiday must be at least double the regular compensation. Applicable collective bargaining agreements may establish a higher rate for the holiday remuneration.

Benefits to the Employee in South Africa

Statutory Benefits

SASSA grants cover the following areas:

  • Older person >60 years of age earning less than ZAR 69,000 or with assets less than ZAR 990,000

  • War Veteran’s Grant for >60 years of age, registered as disabled and have fought in the Second World War or the Korean War

  • Grants In Aid – additional grant for recipients of Older Person, War Veteran or Disability grant if full-time attendance of carer is required

  • Disability Grant for those aged 18-59 and assessed as medically disabled

  • Child Support Grant – for primary caregivers of children under 18, where the applicant does not earn >ZAR 42,000/year or >ZAR 84,000 if living with a spouse

  • Care Dependency Grant for children under 18 with severe disabilities requiring full-time care, for caregivers earning <ZAR 180,000 if single or >ZAR 360,000 if living with a spouse

  • Foster Child Grant for foster parents with children under 18

  • Social Relief in Distress – temporary assistance for those in desperate need, unable to meet basic needs for themselves or their family (maximum 3 months payout, extendable for another 3 months in exceptional cases)

Healthcare benefits are the responsibility of the Department of Health, which runs provincial hospitals in South Africa. South African citizens and permanent residents can access free primary healthcare. Unemployment insurance is paid through the Unemployment Insurance Fund.

Visas and Foreign Workers

General Information

Foreign nationals generally require a visa specifically permitting them to work, issued by the Department of Home Affairs, in order to be employed in South Africa. There are several types of work visas available including general employment, inter-company transfer (ICT), highly-skilled migrant, or business entrepreneur.

Work visas last for the same time as the employment contract or for a maximum number of years. In general, visa extensions are possible.

Types of work visas:

  • General Work Visa – most common, employer needs to prove that position cannot be filled by a South African.

  • Critical Skills Work Visa – for skills regarded as exceptional by the South African government, is valid for a maximum of 5 years with extensions possible.

  • Intra-company transfer – for applicants who have worked for a minimum of 6 months in the company’s foreign office before relocating to South African branch. Issued for 4 years and is not extendable.

  • Corporate Visa – issued to an employing company to allow the company to employ several foreign workers during a specific period

  • Business Visa – for applicants who can invest substantial capital and show a business plan

Public Holidays in 2022

S.No Occasion Date
1 New Year’s Day January 1st
2 Human Rights Day March 21st
3 Good Friday April 15th
4 Family Day (Easter Monday) April 18th
5 Freedom Day April 27th
6 Workers’ Day May 1st
7 Youth Day June 16th
8 National Women’s Day August 9th
9 Heritage Day September 24th
10 Day of Reconciliation December 16th
11 Christmas Day December 25th
12 Day of Goodwill December 26th

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