Employment Law

South Africa Employment Contract

South African law requires a formal employment contract, so you should always provide your employees with a written employment contract. Each contract should include employment details such as wages, working hours, benefits, etc., should be written in one of South Africa’s official languages, and should use the South African Rand as the currency.

Fixed Term

Indefinite

Working Hours in South Africa

The standard working week in South Africa is 45 hours, divided into 5 working days. In addition to this, overtime pay should also be paid. Overtime is limited to 10 hours per week and must be paid at 1.5 to 2 times the regular wage, depending on how long the work is completed.

Holiday Policy

South Africa Vacation

Employees in South Africa are entitled to 15 days of paid leave per year. They can also take up to three days of family leave if there are special circumstances, such as caring for a sick child or the death of a family member.

South Africa Sick Leave

Sick leave in South Africa is based on a 36-month cycle, and employees are entitled to 30 days of paid sick leave in each cycle. During the first six months at the company, employees are entitled to only one sick day for every 26 days worked.

If an employee is absent from work for more than four days due to illness or injury at work, the employer must pay at least 75% of the regular wages for the previous three months. In addition, the state also provides compensation.

Maternity and Paternity Leave in South Africa

Female employees in South Africa are entitled to at least four months of paid maternity leave. Leave can begin one month before delivery and in most cases must be taken for at least six weeks after delivery. Employees are paid by the state.

The law does not provide for paternity leave.

Employee Severance Pay and Termination in South Africa

There is no mandatory maximum length of a probation period in South Africa, but the length of the probation period should be reasonable.

The required notice period for termination varies depending on the term of service. For services of up to six months, the notice period is one week. If the service period is between 6 and 12 months, the notice period is two weeks; if the service period exceeds 12 months, the notice period is 4 weeks.

Some employees may be entitled to severance pay, for example, one week's pay for each year of service when laid off for financial reasons.

South Africa Tax Law

Employers and employees must contribute to South Africa's social funds. For the Unemployment Insurance Fund, employees pay 1% of their wages and employers pay approximately 8.5%.

For the Workplace Insurance Fund (COIDA), employers must pay between 0.11% and 8.26%, depending on their industry and the level of risk perceived by their employees.

South Africa's income tax is progressive, with rates ranging from 18% to 45% depending on income level.

South Africa's corporate tax rate is a flat 28% for most companies.

Health Insurance in South Africa

South Africa has both public and private healthcare, so it is not necessary for employers to offer private insurance, but many choose to do so.

Salary and Benefits

South Africa’s Compensation Law

As of March 2020, the minimum wage for most workers in South Africa was R20.76 per hour.

Welfare Administration in South Africa

As a foreign employer, setting up South Africa's benefits system can be difficult. The law is complex, the bureaucratic process can be slow, and legislation can change regularly, all of which can make it a very time-consuming process.

Outsourcing your benefits administration processes can save you time and money and ensure you are fully compliant with relevant laws. Remoly can simplify your South African benefits administration, with our South African experts setting up and managing everything for you, helping you focus on successfully expanding your business.