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South Africa Employer of Record

Updated: Dec 20, 2021

CA Global HR is an Employer of Record for our clients, offering a cost-effective solution for the outsourcing of payroll, tax, and HR functions with a dedicated team of employment specialists. While onboarding new hires can take months for companies, the CA Global HR team can onboard employees in just days, helping clients to get their businesses up and running in no time.


With our services, clients can rest assured their business is fully compliant with South African labour laws, which may at times be difficult to understand and navigate. We also keep our clients up to speed with any changes in local employment legislation.


Where language barriers exist, CA Global HR works to bridge the gap between clients and their South Africa-based employees, aiding with the smooth running of their businesses.


An overview of South Africa


The southernmost country in Africa, South Africa is a multicultural hub, home to 11 official languages. While English is the most used language in business, Zulu is the most widely spoken language in South Africa, with 23% of the population speaking it.


When it comes to business etiquette in South Africa and knowing what to expect when doing business in the country, the following are worth noting:


  • Although South Africans are friendly, it is easier to initiate business relations with them through mutual business associates as opposed to approaching them directly. You will need to take the time to first establish a rapport unrelated to business and gain trust before trying to discuss business affairs.

  • As most South Africans speak English, translating will likely not be necessary for business interactions.

  • Business negotiations in South Africa can take a long time, and appointments should be made far in advance.

  • Contracts should include deadlines, but these are often viewed as flexible in South Africa.

  • Most South African businesspeople, barring government offices and banks, do not work on weekends, and office hours are like those in Western Countries.

  • The majority of businesses shut down on public holidays as well as from the middle of December until early to mid-January. This should be considered when planning business dealings with South Africans.


Employment in South Africa


It is best practice to put a written contract in place when hiring an employee. The contract should be in English and spell out the terms of employment, including employee compensation and benefits as well as termination conditions. The contract, as well as the letter of offer to the employee, must state the salary and any compensation sums in South African Rand (ZAR).

South African labour law prohibits companies from drawing fixed-term contracts for jobs that are permanent in nature. Where this is not the case and a fixed-term contract is applicable, the duration of the contract must be clearly stated between parties.


South Africa's official public holidays

  • New Year’s Day

  • Human Rights Day

  • Good Friday

  • Family Day

  • Freedom Day

  • Workers Day

  • Youth Day

  • National Women’s Day

  • Heritage Day

  • Day of Reconciliation

  • Christmas Day

  • Day of Goodwill


Working hours in South Africa


A standard South African workweek consists of up to 45 hours per week. In most cases, permanent employees work from 9 am to 5 pm Monday to Friday.


If an employee works five days a week or less, they typically work up to nine hours a day, while the typical workday of employees who work more than five days a week consists of up to eight hours.


Employees who work more than five hours a day are entitled to a 60-minute lunch break excepting cases where there is a written agreement for the employee to have a 30-minute break, or no break at all if they work up to six hours per day.


The above does not apply to employees who work less than 24 hours per month, senior management staff, or sales employees who travel and thus determine their own working hours.


Overtime pay in South Africa


An employee may not work more than 12 hours on any given day. Overtime must not exceed 10 hours per week and staff may not work overtime unless this has been agreed upon.

An agreement can be made to increase overtime hours by 15 hours a week, but this can be done for no more than a two-month period within that year.

Employers must pay employees overtime hours at a rate of 1.5 times the normal hourly wage, or alternatively, an employee may agree to receive paid time off in lieu of overtime pay or a combination of overtime pay and paid time off.

Employees who do not typically work on Sundays are entitled to double the normal hourly wage if they must work on Sundays.

If an employee typically works on a Sunday, then they are entitled to 1.5 times the normal hourly wage.


Bonuses in South Africa


Offering employees a 13th-month bonus (or Christmas bonus) is not mandatory according to South African labour law and is rather considered a gratuity. However, most employers view it as a workers' right and it is common for this bonus to be included in employment conditions.


Employees who perform well may receive a performance bonus, which should be based on a percentage of their salary. A performance bonus can alternatively be paid to a company department in the form of a lump sum and split equally among department staff.


Travel expenses should be recorded and can be claimed through the appropriate tax authorities for a period of up to five years.


Vacation leave in South Africa


Employees are entitled to at least 15 business days off per year in South Africa, or 21 consecutive days which total 15 working days based on a five-day workweek or 18 working days for a six-day workweek, or one day of leave for every 17 days worked, or one hour for every 17 hours worked. The number of leave days is in addition to public holidays. Accumulating paid leave is not prohibited in South Africa, so “use it or lose it” policies are not enforceable.


Family Responsibility Leave in South Africa


Employees receive three days of Family Responsibility Leave for each 12-month cycle from the start of employment if they have worked for their employer for more than four months, under the following circumstances:


  • Birth of a child

  • A sick child

  • Death of a family member including a spouse or life partner, parent or adoptive parent, guardian, child or adopted child, grandchild, or sibling.


Family Responsibility Leave cannot be carried over into the following annual cycle, and employers typically do not provide more than the minimum of three days.


Sick Leave


Sick leave is allocated in 36-month cycles. For every 36 months of employment with the same employer following the job start date or completion of a previous 36-month cycle (sick-leave cycle), the number of paid sick leave days an employee may take equates to the number of days they would normally work within a six-week period.


Employees who have been employed for six months or less are only entitled to one day of paid sick leave for every 26 days worked. After six months of employment, 30 days (for a five-day workweek) or 36 days (for a six-day workweek) of paid sick leave will be available, minus the number of sick days taken during the first six months of employment.


At the end of every sick-leave cycle, any unused sick leave will be forfeited.


If an employee is unable to work due to a work-related accident or occupational illness for four days or more but less than three months, the employer must pay the injured employee at a rate of pay of at least 75% of their salary from the first day of injury until the employee returns to work. If the employee is unable to work for a period longer than three months, the employee must claim compensation from the Compensation Fund.


Maternity and Paternity Leave in South Africa

Pregnant employees are entitled to at least four consecutive months of maternity leave. Employees can start their maternity leave up to one month prior to their due date, or earlier or later as agreed or required by health reasons. Employees may not go back to work within six weeks of giving birth unless it is declared safe to do so by their doctor.


The Unemployment Insurance Act allows for benefits at a level contingent on earning and can pay up to 60% of an employee’s salary during maternity leave.


While no specific policy on paternity leave exists, the three days a year (non-cumulative) designated for Family Responsibility Leave can go towards paternal leave.


South Africa tax system


South Africa does not have a state-sponsored social security system other than the following:


The Unemployment Insurance Fund (UIF)

This provides short-term relief to employees when they become unemployed or are unable to work because of illness, maternity, or adoption leave, and provide relief to the descendants of a deceased contributor. A 1% monthly contribution must be made by the employee based on the remuneration paid to the employee, while an employer’s social cost typically comes to 8.5% of gross remuneration.


The Compensation for Occupational Injuries and Diseases Act (COIDA)

This act allows for employees who became partially or completely disabled because of their occupation to receive compensation. The compensation paid varies by industry and typically ranges from 0.11% to 8.26% of gross remuneration. The amount is to be paid annually.


Termination, resignation, and severance pay in South Africa

Employers may set a probation period in an employment contract. Local labour laws do not specify a maximum probation period, but the period must be reasonable in terms of the circumstances of the position.


Resignation or Termination Notice Period:

Either party can terminate a contract by serving a notice or paying in lieu of it. The period of notice is stipulated as at least:

  • One week’s notice if the employee has been employed for up to six months

  • Two weeks’ notice if the employee has been employed for between six and 12 months

  • Four weeks’ notice if the employee has been employed for more than 12 months.

A collective agreement may permit the notice period of four weeks required once the employee has worked more than 12 months to be reduced to not less than two weeks.


Severance Pay: An employee who is dismissed for reasons based on operational requirements (retrenchment) or whose contract of employment is terminated on account of insolvency is entitled to severance pay at a rate of one week of pay for each year of service completed. No severance pay is required in cases of resignation, retirement, death, expiration of an employment contract, dismissal for misconduct, poor performance, illness, or other reasons.


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