Article
4 min read
Employer Costs for an Employee in South Africa (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 05, 2026
Quick answer: What is the total employer cost for a $100,000 salary in South Africa?
For an employee earning $100,000 USD annually in South Africa, employers can expect mandatory employer costs of approximately $1,313 USD per year, bringing total compensation costs to $101,313 USD.
Estimated total employer cost (South Africa): ~1.3% on top of gross salary (example estimate).
Hiring in South Africa can be a great way to access highly skilled talent—especially in fast-growing sectors like tech—whether you’re expanding into the market, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to statutory contributions, payroll rules, and mandatory insurance requirements.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in South Africa, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in South Africa, such as:
- UIF (Unemployment Insurance Fund) contribution
- Skills Development Levy (SDL)
- Workman’s Compensation insurance premium
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave (vacation)
- Sick pay
- Private health insurance
- Employer-provided benefits or allowances
- Bonuses, equity, or commissions
- Equipment and onboarding expenses
- Costs that vary by role, industry, or location
Why employer costs vary in South Africa (and globally)
Employer costs can differ depending on:
- Salary thresholds and contribution caps
- Industry-specific insurance requirements
- Employee classification and contract type
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for South Africa
Below is an estimated breakdown of mandatory employer costs for hiring an employee in South Africa earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): R 1,877,420 ZAR
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (ZAR) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| UIF (Unemployment Insurance) | R 2,125 | $113 | Contribution to the Unemployment Insurance Fund |
| SDL (Skills Development Levy) | R 18,774 | $1,000 | Levy supporting skills development initiatives |
| Workman’s Compensation | R 3,755 | $200 | Insurance premium for workplace injuries/illness |
| Total Estimated Employer Costs | R 24,654 | $1,313 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | ZAR | USD |
|---|---|---|
| Gross Salary | R 1,877,420 | $100,000 |
| Mandatory Employer Costs | R 24,654 | $1,313 |
| Total Compensation Cost | R 1,902,074 | $101,313 |
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FAQs
What is the Unemployment Insurance Fund (UIF) in South Africa?
The Unemployment Insurance Fund (UIF) is a mandatory program that provides short-term financial relief to eligible workers who become unemployed or cannot work due to certain circumstances. Both employers and employees contribute to UIF through payroll, making it a standard cost of employment in South Africa.
Do employers and employees both contribute to UIF?
Yes. In South Africa, employers and employees generally both contribute to UIF as part of payroll processing. Employers are responsible for calculating, withholding the employee portion, adding the employer portion, and remitting the total contribution correctly.
Who is responsible for income tax in South Africa?
Income tax is paid by the employee, but employers must withhold the correct tax amount through payroll and submit it to the relevant tax authority. This makes accurate payroll setup and reporting essential for compliance.
What is SARS (South African Revenue Service)?
The South African Revenue Service (SARS) is South Africa’s national tax authority (sometimes incorrectly written as “African Revenue Service”). Employers must comply with SARS requirements for payroll tax withholding, reporting, and remittance.
How do SARS requirements affect employer payroll costs?
While SARS income tax withholding is not usually an additional employer-paid cost, it creates compliance obligations for employers—such as correct payroll processing, reporting timelines, and accurate calculations. This is a key part of staying compliant when hiring employees in South Africa.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
