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The individual income tax ranges from 18% to 45%. Income tax is calculated according to progressive rates.

The employer cost is generally estimated at 2.2% of the employee salary.

• UIF (Unemployment Insurance) - 1.0%
• SDL (Skill Development Levy) - 1.0%
• Workman's compensation - 0.2%

Overtime payment is mandatory for employees earning less than ZAR 224,080 per year. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 3 hours overtime a day and 10 hours overtime a week. For overtime hours, employees are paid 150% of their salary on standard days and 200% of the salary on Sundays and holidays.

Should any employee work on a Sunday, they must be remunerated at double their normal wage rate for each hour worked, unless they ordinarily work on a Sunday, in which case they must be remunerated at 1.5 times their normal wage rate for each hour worked.

Some exceptions to overtime may apply for certain roles or salaries. For example, employees who earn more than ZAR 224,080.48 a year are not subject to overtime provisions. Such employees cannot demand to be paid for overtime worked, nor can they demand to be granted paid time off in view of payment.

Pregnant employees are entitled to four consecutive months of maternity leave. The employee may start maternity leave four weeks before the child's birth. The leave is unpaid but the employee can submit claims to the Unemployment Insurance Fund (UIF) to qualify for payment during the periods of absence from work. The payment of maternity benefits will be determined by the Minister subject to the provisions of the Unemployment Insurance Act, 2001 (Act No 63. of 2001).

The employee must notify the employer in writing at least 4 weeks before the employee intends to start maternity leave. The employee is not permitted to work for at least 6 weeks after giving birth unless she is declared fit to do so by a medical practitioner or midwife.

The employee can extend their leave but the leave will be unpaid.

An employee is entitled to leave, according to the following categories, provided by the Basic Conditions of Employment Act (BCEA).

Parental leave, related to childbirth: an employee who is a parent of a child will be entitled to 10 consecutive days’ parental leave. This will effectively replace the three days’ paternity leave currently provided for in the BCEA, but the current maternity leave provisions in the BCEA remain unchanged.

Parental leave may commence on the day the child is born. The employee will have to give at least one month’s written notice of the expected date of birth, as well as when the leave is due to commence and when the employee will return.

Adoption leave, related to adoptions where the child is below the age of 2: a single adoptive parent is entitled to 10 consecutive weeks’ leave. If there are two adoptive parents, one of the parents would be entitled to 10 consecutive days of parental leave, as standard parental leave mentioned before. Leave can commence on the day that the adoption order is granted.

Commissioning parental leave, related to surrogate motherhood: an employee who will be primarily responsible for the child will be entitled to this leave. In the case there are 2 parents, one can take standard parental leave.

Employees are entitled to paid sick leave for up to 30 days every three years. Employees are entitled to family responsibility leave if their child is sick for 3 days per year. The employee will be paid 100% of their salary by the employer during the leave.

Employees working a five-day week from Monday to Friday are entitled to 30 days’ paid sick leave over the course of the three-year period. The sick leave cycle only comes into effect after the first six months of employment. However, during the first six months of employment, an employee is entitled to one day’s paid sick leave for every 26 days worked.

Medical certificates are required if an employee has been absent from work for more than two consecutive days or if the employee is off sick more than once within an eight-week period.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Termination in South Africa can be complex and must be based on performance or redundancy reasons (serious cause, unfit for the role, extinction of the role).

Compliant terminations include:

• Voluntarily by the employer
• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer (without notice):
  • Unsuitability for the job position (due to performance, ill-health)
  • Redundancy due to employer's operational requirements

Notice of termination of a contract of employment must be given in writing, except when it is given by an illiterate employee.

Notice will depend on the nature of termination, length of employment, and the contract term.

The minimum notice period is one week and will be increased according to the length of the employment.

• Up to 4 weeks of employment - 1 week's notice
• Between 4 weeks to 1 year of employment - 2 week's notice
• More than 1 year of employment or if the employee is a farmworker or a domestic worker who has been employed for more than 4 weeks - 4 week's notice

Notice period during probation is 2 weeks (14 days).

In South Africa, a retrenched employee must at least be paid 1 week’s pay for each completed year of ongoing service, or what is specified in the employment contract if the amount agreed is higher.

Untaken leave must be paid.

Apart from severance, there are potential additional payments such as:

• Notice pay, in case the employee will not work during the notice period:
  • If the length of service is less than 6 months - 1 weeks’ notice pay
  • If the length of service is more than 6 months but less than 1 year, - 2 weeks’ notice pay
• Bonus/Pension pay: depending on the employment contract, any pro-rata payment of a bonus, pension, and so on.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Both full-time and part-time employees are entitled to 15 working days of paid time off (PTO) a year. PTO accrues monthly, with 1.25 days of leave per month.

The employee and the employer must agree on when annual leave can be taken. Leave must be granted not later than six months after the end of the annual leave cycle (which is 12 months from the date of employment).

The employer is prohibited from paying compensation in exchange for annual leave except on termination of employment. The employer may not force an employee to take annual leave during any period of notice and the employee cannot take annual leave during any period of notice.

South Africa celebrates 12 national holidays:

1. New Year's Day
2. Human Rights Day
3. Good Friday
4. Family Day
5. Freedom Day
6. International Workers' Day
7. Youth Day
8. National Women's Day
9. Heritage Day
10. Day of Reconciliation
11. Christmas Day
12. Day of Goodwill

There is no specific language for the contracts. Contracts can be bilingual. They must be in writing and signed by both parties.

The contract must include:

• Name
• Start date
• Length of the employment
• Working hours
• Leaves
• Job description
• Termination conditions