Payroll taxes
in South Africa.

SALARY PAYMENT IN South African Rand (ZAR, R)

CONTRACT LANGUAGES English

PAYROLL TAX 2.00%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours
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South Africa

What is the average employer tax rate in South Africa?

The average employer tax rate in South Africa is 28% — the corporate income tax rate in South Africa.

This rate is applicable to resident companies, which are companies incorporated in South Africa or companies effectively managed and controlled in South Africa (the latter assumed to have a permanent establishment in South Africa).

South Africa – 2023 CIT tax rates

Taxable income (KRW)	Tax rate
0 – 200 MM	28%

What is the average employee tax rate in South Africa?

South Africa has progressive rates of individual income tax. The different tax brackets are set out below:

South Africa – Individual Income Tax

Taxable Income (ZAR)	Tax rate 2023
0 – 266.000	18%
266.001-353.000	26%
353.001 – 488.700	31%
488.701 – 641.400	36%
641.401-817.600	39%
817.601-1,731.600	41%
1,731.601+	45%

Employer contributions in South Africa

South Africa does not have a comprehensive social security system therefore there is no significant social security taxes levied. Total employer contributions amount to roughly 2.65% of the employee’s salary.

1% goes into the mandatory contribution to unemployment insurance fund (UIF), another 1% goes into skill development levy (SDL) for training and educational purpose, and another roughly 0.5% goes into a worker’s compensation fund (COIDA). The rate of this contribution depends on how dangerous the work is considered.

South Africa – Employer contributions

Contribution item	Contribution rate
Unemployment Insurance Fund (UIF)	1% up to a certain threshold
Skills Development Levy (SDL)	1% (large employers only)
Compensation for Occupational Injuries and Diseases Act (COIDA):	Varies

Employee contributions in South Africa

In South Africa, employees and employers contribute to the same things. South Africa does not have a comprehensive social security system therefore there are no significant social security taxes levied. Total contributions amount to roughly 2.65% of the employee’s salary.

1% is deducted from an individual’s salary and goes into the mandatory contribution to unemployment insurance fund (UIF).

Other payroll taxes, such as the Skills Development Levy are paid only be employers, not employees.

South Africa – Employee contributions

Contribution item	Contribution rate
Unemployment Insurance	1%

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FAQs

What is the tax bureau of South Africa called?

The tax bureau of South Africa is called the South African Revenue Service (SARS).

Is there an employer payroll tax contribution in South Africa?

South Africa does not have a comprehensive social security system therefore there are no significant social security taxes levied. Nevertheless, employer contributions amount to roughly 2.65% of the employee’s salary.

How does the payroll tax system of South Africa work?

First, employers are required to register with the South African Revenue Service (SARS) and obtain a tax reference number.

Second, employers must withhold payroll taxes from their employees’ salaries and remit them to SARS on a monthly basis. The payroll taxes include income tax, unemployment insurance fund (UIF) skills development levy (SDL) contributions, and worker’s compensation insurance (COIDA).

Finally, employers must also submit an annual reconciliation statement to SARS that reconciles the payroll taxes withheld and remitted during the year.

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