Employer Of Record in South Africa
We make it easy and painless to expand your business into South Africa. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.
Accelerate your growth into South Africa Compliantly and hassle-free
How we can help you expand in South Africa
As your EOR in South Africa we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Your candidate is hired by a PEO in South Africa provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.
Expand to South Africa with Serviap Global
Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.
In just a few days, you can easily and safely build a presence in South Africa being sure that your staff will be hired in compliance with labor and tax regulations.
Table of Contents
South African Rand (ZAR)
Pretoria, Bloemfontein and Cape Town
English, Afrikaans & multiple others
South Africa Country Facts
Diversity is a prominent feature in South Africa, and it has 11 languages. South Africa has made improvements to the wellbeing of citizens since its transition to democracy in the mid-1990s, although inequality still exists. Located on the southernmost of the African continent South Africa is the economic superpower, the main center of economic activity and development. South Africa’s coastlines border the Indian Ocean to the southeast and the Atlantic Ocean to the southwest.
South Africa is a middle-income market with many natural resources; it has a well-developed financial, legal, communication, energy, and transport sectors; and a stock exchange that is in the top 20 in the world and Africa’s largest.
The Importance of Small and Medium-sized Companies
Small and Medium businesses in South Africa make up 91% of all business, and together they provide employment for 60% of the labor force making them an important part of South Africa’s economy.
South Africa is a country of approximately 61 million people. The literacy rate is 94.3% and state spending on education is the largest item in South Africa’s national budget.
With a large and quickly expanding economy, South Africa offers increasing business opportunities for international companies. The nation’s growing middle class population and developed financial industry and business infrastructure make it an appealing location for a global business.
Key Sectors of the National Economy
The top sectors of the countries economy are:
- Food processing
- Vehicle manufacturing
South Africa’s competitive wage rates, high English proficiency and advanced skill sets make it attractive to foreign employers. It also shares a European time-zone. These factors may help to stem the tide of emigration, and are already attracting expats back to South Africa.
Prominent Cities for Business
Pretoria is the executive capital of South Africa. But Johannesburg is the largest urban area in the country and a center of commerce.
Durban, a port on the Indian Ocean, is a major industrial center. Both East London and Port Elizabeth on the country’s southern coast, are important commercial, industrial, and cultural cities.
South Africa has the third largest economy and is the most industrialized, diversified and techno advanced, economy in Africa.
Facilities for Foreign Investment
The leaders in South Africa encourage foreign investment, and South Africa has progressed well with the dismantling of its previous economic system, which was based on import substitution, anti-competition measures, subsidies and high tariffs and a lot of government intervention.
Business Culture in South Africa
- No Rush
Negotiations move rather slowly in South Africa and should be approached with the attitude of working
toward a mutually beneficial agreement.
- Don’t Show Empty-Handed
Even if the relationship is strictly business, if invited to someone’s home, bringing a gift such as a bottle
of South African wine, flowers or chocolates are appropriate.
- Build Trust
South African business culture relies heavily on trust so whenever possible schedule face-to-face meetings to discuss business. Maintain eye contact when you shake hands.
South Africa Gastronomy: regional and traditional cuisines
South African cuisine is a rainbow of flavors developed in the country or borrowed and tweaked from others around the world.
Bobotie is a ground meat with medium heat curry and other spices, topped with an egg and milk mixture, most like to add raisins.
A popular snack especially for watching rugby, cricket or football is Biltong and Droewors which are dried sausages.
Mealie Pap is a popular porridge made of cornmeal. Slap pap (runny porridge) is usually eaten for breakfast with butter, milk and sugar. Stywe pap is a thicker preparation usually eaten with stews and meat.
|Num. States / Province||There are 9|
|Principal Cities||Pretoria, Johannesburg, Cape Town, Durban|
|Language||There are 11 languages of South Africa, English is among those and is commonly used.|
|Local Currency||South African Rand|
|Thousands Separator Format||9 999 999,00|
|Country Dial Code||+27|
|Time Zone||UTC +2|
|Border Countries||Nambia, Botswana, Zimbabwe, Mozambique, and Swaziland.|
|Continental surface||1,219,602 km2|
|Fiscal Year||April 1 – March 31|
|Recommended, but not mandatory, 2,474 rand per month (approximately $96.24 USD) for the private sector jobs|
|Taxpayer Identification Number Name in the country||TIN|
|Current President||Cyril Ramaphosa|
Key Tax and Labor Authorities
|South African Revenue Service||Or SARS, this deals with taxes in South Africa|
|Department of Employment and Labor – DOL|
This department handles labor related issues.
The employment contract is an integral part of labor law in South Africa and though a written contract is recommended, it is unnecessary for a valid employment.
A verbal contract works if the following is agreed upon: Offer and acceptance; Agreement on specific tasks to be performed, remuneration, duration and hours of work; and. Intention to create legal relations
|The International Labor Organization||They are a member|
|Work Hours||In South Africa, most employees work Monday to Friday, from 9 to 5. They can only work up to 10 extra hours a week, and no more than 12 hours a day.|
Legal Benefits in South Africa
|Minimum Wage||Recommended 2,474 rand per month (approximately $96.24 USD) for the private sector.|
|Overtime||The legal rate for overtime is 1.5 times the normal wage rate.|
|South African Labor Law does not require this but it is customary.|
National Institute for Occupational Health (NIOH)
All employers are obliged to register with a carrier which is either the Compensation Commissioner of the Compensation Fund or a designated mutual association such as RMA or FEMA.
COIDA governs the objectives of the Compensation Fund.
COIDA seeks to provide for compensation for disablement caused by occupational injuries or diseases in the course of employment, or related death.
|Vacations or PTO||The Department of Labour in South Africa stipulates that workers must receive 21 consecutive days of paid annual leave, one day off for every 17 days worked, or one hour off for every 17 hours worked|
Leaves of Absence
Employees have the right to paid absences for the following things:
• Annual Leave – 21 consecutive days on full pay annually
• Maternity Leave – Four weeks before birth of the child and six weeks after
• Sick Leave – 15 days per year
• Family responsibility Leave – Three days of paid family responsibility absence from work per year
Employers Contribution or Labor Cost
Annual Taxable Income
|Over this amount||Not over this amount||Tax % on Excess|
|Up to R205,900||18% of taxable income|
|R205,901||R321,600||R37,062 + 26% of taxable income above R205,900|
|R321,601||R445,100||R67,144 + 31% of taxable income above r321,600|
|R445,101||R445,200||R105,429 + 36% of taxable income above R584,100|
|R584,201||R744,800||R155,505 + 39% of taxable income above R584,200|
|R744,801||R577,300||R218,319 + 41% of taxable income above R744,800|
|R1,577,301 and above||R559,464 + 45% of taxable income above R1,577,300|
Corporate Tax Rates
The corporate tax system in South Africa is 28% and collected by the South African Revenue Services (SARS), different tax rates apply for smaller or different kinds of companies. From 1 April 2022, the flat tax rate will lower to 27%.
Work injury benefits:
Must be assessed with a work injury or occupational disease to apply for this benefit and it must be reported within 12 months.
Occupational disease benefits:
This is paid if the employee is diagnosed with an occupational disease.
Public holidays observed in South Africa
|1 January||New Year’s Day|
|21 March||Human Rights Day|
|Friday before Easter||Good Friday|
|5 April||Family Day|
|1 May||Workers’ Day|
|16 June||Youth Day|
|9 August||National Women’s Day|
|24 September||Heritage Day|
|16 December||Day of Reconciliation|
|25 December||Christmas Day|
Rules for termination of an employment contract.
|Type of Termination||Brief Description|
Proper grounds for termination include:
The conduct of the employee, the capacity of the employee, and the operational requirements of the employer’s business.
|Unjustified Dismissal||A dismissal is unfair if it is not in accordance with a fair procedure.|
Two weeks’ notice must be given if the employee has been serving for more than six months, but less than 12 months.
But four weeks if employed for more than 12 months.
The employer and employee may change these terms
Other forms of compensation upon termination include
In terms of the Basic Conditions of Employment Act 75 (BCEA), employees who are let go due to no need for the employee or a match for the company’s performance standard are “retrenched”. Retrenched employees are entitled to a minimum severance payment of one week’s pay for each completed year of service.
Length of Employment
One year and up
One week’s pay per year worked
Your one-stop global hiring solution. Secure, reliable, compliant
No matter how big or small, we are ready to answer all your questions- anytime, anywhere.
Our team of in-country experts help you navigate new markets and cultural nuances
Top-tier Benefits Packages
Great talent deserves great benefits. We offer a competitive range of benefits so that you only attract top-tier talent worldwide.
You remain 0% liable
Shift the worry from your shoulders to ours! We stay on top of regulations so you’re always 100% complaint with local laws