Payroll in South Africa 2026: PAYE, UIF, SDL and payslips

In South Africa the employer deducts PAYE (employees' tax) and the employee's 1% UIF contribution from each salary and pays them to the South African Revenue Service (SARS) with the monthly EMP201, within 7 days after month-end. On top of salary the employer pays 1% UIF and, once payroll passes R500,000 a year, the 1% Skills Development Levy.

South African payroll at a glance

UIF and the Skills Development Levy

UIF. The contribution is 1% of remuneration from the employee and 1% from the employer, 2% in total. The earnings ceiling has been R17,712 a month since 1 June 2021, so contributions stop at R177.12 each on higher salaries. Employees who work less than 24 hours a month for an employer are excluded, as are national and provincial government officials and certain office-bearers.

SDL. The levy is 1% of total salary costs, including wages, overtime, leave pay, bonuses, fees, commissions and lump sums. An employer becomes liable when it expects total salaries to be more than R500,000 over the next 12 months. Public service employers in national and provincial government, some public entities, qualifying public benefit organisations and certain municipalities are exempt.

The EMP201 covers PAYE, UIF and SDL in one monthly declaration. Workers' compensation under COIDA is not collected by SARS; employers register and pay their assessment with the Compensation Fund.

PAYE: tax tables and rebates for 2026/27

PAYE is withheld every month so that, over the tax year, it matches the employee's income tax. Payroll systems annualise the remuneration, apply the annual table, subtract the rebates and spread the result over the pay periods.

Rates of tax for individuals, 2027 tax year (1 March 2026 to 28 February 2027):

Rebates and thresholds:

The rebates rose from the 2026 tax year (primary R17,235, secondary R9,444, tertiary R3,145), so update your payroll from the March 2026 salary. Medical scheme fees tax credits and contributions to retirement funds also reduce PAYE where they apply; this guide's example leaves them out.

Minimum wage, working hours and overtime

National minimum wage: R30.23 for each ordinary hour worked from 1 March 2026, up from R28.79. The increase also covers farm workers and domestic workers. Workers on the Expanded Public Works Programme have their own minimum of R16.62 an hour.

Working time under the Basic Conditions of Employment Act (BCEA):

• ordinary hours of at most 45 a week, and 9 a day for a five-day week or 8 a day for a longer week
• overtime only by agreement, at most 3 hours a day and 10 hours a week
• overtime paid at at least 1.5 times the normal wage, or by agreement the normal wage plus at least 30 minutes of paid time off for each hour of overtime
• annual leave of at least 21 consecutive days on full pay for each 12-month leave cycle, or by agreement 1 day for every 17 days worked

The Minister can exclude employees who earn above an earnings threshold from these working-time provisions, so check the current determination for senior staff. South African law has no 13th cheque: a year-end bonus is paid only if the contract or a collective agreement provides for it.

Monthly payroll calendar: EMP201, EMP501 and IRP5

Registration: an employer must register for PAYE within 21 business days after becoming an employer, unless none of its employees is liable for normal tax, and registers for UIF and SDL when liable.

Monthly: declare PAYE, UIF and SDL on the EMP201 and pay within 7 days after the end of the month in which you deducted them. When that day is a weekend or public holiday, pay on the last business day before it.

Reconciliations:

With the annual reconciliation you issue each employee an IRP5 (or IT3(a) when no tax was deducted). When employment ends, the certificate is due within 14 days of the last day of employment.

Payslips (BCEA section 33): on each payday give every employee in writing: your name and address, the employee's name and occupation, the period paid, the remuneration in money, the amount and purpose of every deduction, the actual amount paid and, where relevant, the rate of pay and overtime rate, the ordinary and overtime hours worked and the hours worked on Sundays and public holidays.

Records: keep each employee's name and occupation, time worked and remuneration paid for 3 years from the last entry (BCEA section 31).

Worked example: R25,000 a month in 2026/27

An employee under 65 earns R25,000.00 a month (R300,000 a year), with no medical scheme or retirement fund deductions, at an employer whose payroll exceeds R500,000 a year.

Annual tax on R300,000 is R44,118 + 26% × (R300,000 − R245,100) = R44,118 + R14,274 = R58,392. After the primary rebate of R17,820, the tax is R40,572 a year, or R3,381.00 a month. UIF is capped: 1% of R17,712 = R177.12.

The EMP201 for this employee shows PAYE R3,381.00, UIF R354.24 (both shares) and SDL R250.00, R3,985.24 in total. The COIDA assessment is paid separately and is not included.

Common mistakes

1. 1Charging UIF on the full salary instead of capping it at R17,712 a month.
2. 2Ignoring SDL after the payroll passes R500,000 a year, or paying it when the payroll stays below.
3. 3Running March payroll on last year's tables, without the new brackets and the R17,820 primary rebate.
4. 4Paying the EMP201 on the 7th when it falls on a weekend: the deadline moves to the last business day before.
5. 5Paying less than R30.23 an hour, for example to domestic or farm workers.
6. 6Payslips without the BCEA details, such as the purpose of each deduction or the overtime hours.
7. 7Missing the interim EMP501 due by 31 October.

For a smooth month-end, see our month-end close checklist.

How Clientlly helps

Clientlly ships a built-in payroll profile for South Africa: the 2026/27 tax brackets with the primary rebate modelled as a tax-free band, UIF with its earnings ceiling, SDL as an optional employer levy, and the national minimum wage, checked against official sources on 1 October 2026. It calculates gross to net and the employer contributions, produces payslips, supports recurring payroll adjustments, and imports employees and payroll data; an administrator can adjust the rates in the payroll tax settings. The profile models one employee in a primary job, single, without dependants, under 65, at national level, so age rebates, medical credits, retirement fund deductions and personal circumstances must be checked.

The Clientlly HR module also handles leave requests and approvals with a leave calendar and keeps HR documents in one place, and attendance and time tracking records hours and overtime for you to review before payroll.