Republic of South Africa
Navigating international regulations with confidence
Currency
Rand – ZAR
Official Language
English
- More
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- Ndebele
- Sepedi
- Sesotho
- South African Sign Language
- Swazi
- Tsonga
- Tswana
- Venda
- Afrikaans
- Xhosa
- Zulu
-
- Ndebele
- Sepedi
- Sesotho
- South African Sign Language
- Swazi
- Tsonga
- Tswana
- Venda
- Afrikaans
- Xhosa
- Zulu
Fiscal Year
1 Mar - 28 Feb
Payroll Frequency
Weekly, Bi-weekly & Monthly
Tax System and Regulations
Income Tax Structure
South Africa uses a progressive income tax system, where individuals are taxed according to income brackets that are reviewed annually, with tax rates starting at 18% for lower-income earners and increasing up to 45% for high earners. The South African Revenue Service (SARS) is responsible for administering and collecting taxes, and both residents and non-residents may be liable for income tax depending on the source and nature of their income. Various rebates and deductions are also available to help reduce taxable income.
Payroll Taxes
Employers and employees contribute to payroll-related taxes. Employees pay Pay As You Earn (PAYE) tax, which is deducted directly from their salaries. Employers are responsible for deducting and remitting this to SARS. Employees also contribute 1% of their salary to the Unemployment Insurance Fund (UIF), capped at a monthly earnings limit of ZAR17,712. Employers match the 1% UIF contribution and pay a 1% Skills Development Levy (SDL). Employers also contribute an annual assessment fee to the Compensation for Occupational Injuries and Diseases (COID) Fund, based on their workers’ earnings.
SARS Submission Deadlines
SARS sets strict deadlines for monthly and annual tax submissions. Employers must file the monthly employer declaration (EMP201) and pay PAYE, UIF and SDL by the 7th of each month, or the previous business day if the 7th falls on a weekend or public holiday. For annual submissions, the employer reconciliation declaration (EMP501) and employees’ IRP5/IT3(a) certificates for the previous tax year must be submitted between 1 April and 31 May. The employer interim reconciliation, covering 1 March to 31 August, usually runs from 16 September to 31 October and is based on the EMP201 submissions, IRP5/IT3(a) tax values and PAYE payments made during that period.
Employment Tax Incentive
The Employment Tax Incentive (ETI) encourages South African employers to hire young job seekers by reducing their PAYE liability. To qualify, employers must be registered for PAYE, fully tax-compliant and not part of government or certain public entities. Eligible employees must be aged 18-29, earn less than ZAR 7,500 per month and not be domestic workers or connected persons to the employer. The ETI can be claimed for up to 24 months per qualifying employee and is submitted monthly via the EMP201 form.
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