South Africa is the southernmost country in Africa, bordered by Namibia, Botswana, Zimbabwe, Mozambique, Eswatini, and it surrounds the enclaved country of Lesotho. The country has 3 capital cities, with the 3 branches of government each located in one of them.

Since 1994, all ethnic and linguistic groups in South Africa have held political representation in the country's liberal democracy. South Africa is often referred to as the "rainbow nation" to describe the country's multicultural diversity, especially in the wake of apartheid.

Types of Contracts

• Permanent/Indefinite
• Fixed Term

Part-time work: Salary is distributed based on the amount of time

Seasonal work - Full-time for a period with a reduced amount of time

Working Hours

Full-time Employees work a maximum of 45 hours per week. An employee is considered full-time if they work more than 24 hours in a week (7 days).

Overtime

Employees earning over ZAR 241,110.59 per year are not eligible to be paid overtime. However, they still need to agree to the overtime required.

Payment for overtime for employees earning under the amount of ZAR 241,110.59 per year is 1.5x the hourly rate, and double the hourly rate if working on a Sunday or public holiday.

Employees are not permitted to work more than 3 hours overtime in 1 day or more than 10 hours overtime in a week.

Minimum Wage

The minimum wages in South Africa as of August 2023 are:

• Hourly wage: ZAR 25.42
• Weekly wage: ZAR 1143.90
• Monthly wage: ZAR 4956.52

Probation Period

The maximum probation period is 3 months (90 days). This can be extended with good cause by mutual written agreement prior to the conclusion of the 3 months.

Should a written agreement extending the probation period not be provided, the employee is considered full-time if the employee works 1 day more than 90 days.

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Taxes & Local Employment Costs

Employee Taxes

Income tax for employees varies based on salary and employee age.

Please see here for the South Africa government website with the latest tax bands, thresholds and rebates.

In addition to income tax, employees need to contribute to the following:

• Unemployment Insurance Fund (UIF): 1% of gross salary capped at ZAR 17,712/month

Employer Taxes & Contributions

• Skills Development Levy (SDL): 1% of gross salary
• Unemployment Insurance Fund (UIF): 1% of gross salary capped at ZAR 17,712/month
• Compensation for Occupation Injuries and Diseases Act (COIDA) Provision: 0.25% of COIDA Income (capped at R 568,959/year, pro-rated YTD)

Annual Leave

Employees are entitled to a statutory Paid Time Off (PTO) allocation of 21 consecutive days or 15 working days.

Employees accrue leave at 1.25 days per month or 1 day for every 17 days worked. Leave must be taken within a 12-month cycle, starting on day 1 of employment.

If it is not taken, the employee has another 6 months to take that leave or they forfeit the previous year’s leave accrual. This can be extended for a further 3 months upon agreement in writing by both parties.

No payout or purchase back of leave is allowed during the employment of the employee. Employers can be fined heavily if they attempt to pay employees to not take leave.

Sick Leave

If an employee works a 5-day week, they are allocated 30 days of paid leave within a three-year cycle.

During the first 6 months of employment, employees are entitled to 1 day of paid sick leave for every 26 days worked.

An employer may require a medical certificate before paying sick leave for absences exceeding 2 consecutive days or occurring more than twice in an eight-week period.

Maternity Leave

Pregnant workers are entitled to at least 4 consecutive months of maternity leave. There are additional maternity leave basic for mothers who have miscarriages/stillbirths.

Workers may take maternity leave 1 month before their due date, or earlier or later as agreed or required for health reasons.

Workers may not go back to work within 6 weeks after the birth unless their doctor or midwife says it is safe.

Maternity leave is paid by the Unemployment Insurance fund at a % of the salary.

It is common practice but not compulsory for companies to pay an amount to the mother to keep minimum benefits up to date: eg: pension or provident fund, medical aid (if the company contributes).

Paternity/Parental Leave

Under South African labour law, an employee is entitled to 10 days of parental leave upon the birth of an employee's child.

The same number of leave days are applicable when an employee legally adopts a child or is a prospective adoptive parent and is the main caregiver to the child.

Family Responsibility Leave

Full-time workers may take 3 days of paid family responsibility leave during each annual leave cycle (12-month period from day 1 of employment). Any unused leave expires at the end of the annual cycle.

An employee may take family responsibility leave for the following reasons:

• When their child is born
• When their child is sick and they are the primary caregiver
• In the event of the death of their:
• Spouse or life partner
• Parent or adoptive parent
• Grandparent
• Child or adopted child
• Grandchild

The provisions for family responsibility leave do not apply to workers who work less than:

• 4 months for their employer
• 4 days a week for one employer
• 24 hours in a month

Public Holidays

There are 12 official public holidays per year. Should a public holiday fall on a Sunday, the following Monday is observed as a public holiday.

For an up-to-date list of public holidays, see the government website here.

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Benefits

Summary

Employers in South Africa can typically offer the following benefits:

• Medical Aid contribution
• Retirement fund/Provident Fund

Note that any additional fringe benefits (e.g. work-from-home allowance) contributed to by employers count as taxable income.

Medical Insurance

South Africa does not have a government health system. Private Medical Insurance (known as Medical Aid) is required for easy access to medical professionals. Dental and Vision are included in higher plans for medical aid.

Notice Period

The minimum notice periods are as follows:

• Up to 6 months of service = 1 week notice
• 6 to 12 months of service = 2 weeks notice
• Over 12 months of service = 4 weeks notice

Employers may provide longer notice periods if they wish to do so.

With cause

In South Africa, if an employer wishes to terminate an employment contract with an employee due to a cause or transgression, they must follow a fair procedure and must have a valid reason for the termination. The notice period required for such termination will depend on the specific circumstances of the case.

If the employer is terminating the employment contract for misconduct or poor performance, the employer is required to follow the company's disciplinary procedure, which should outline the process for investigating and disciplining employees. The employer must ensure that the process is fair and that the employee has been given an opportunity to respond to any allegations against them. The notice period will depend on the outcome of the disciplinary process and whether or not the employee is found to be guilty of the alleged misconduct or poor performance.

In general, if an employee is being dismissed for an offense, the employer should give the employee reasonable notice of the termination. The employer should take into account the degree of the offense, the employee's length of service, and any other relevant factors. The notice period required for termination due to an offense may be longer than the statutory minimum notice periods under the Basic Conditions of Employment Act.

Without cause

If the employer is terminating the employment contract for operational reasons, such as retrenchment (employee dismissal) or restructuring, the employer must follow the Labour Relations Act and consult with the affected employees and any applicable trade unions. The notice period will depend on the specific circumstances of the retrenchment or restructuring and must be reasonable in the circumstances.

Statutory Payments

When the employee/er terminates the employment agreement, all the accrued leave must be paid out in the final payment within 7 days of the employee leaving the company.

Severance pay is referred to as a “transition payment” and is usually stipulated in the Employment Contract or Collective Agreement. Employees are generally entitled to 1 week of pay for each year employed (unless they have been terminated due to poor performance or misconduct, in which case no severance payment is due).

While not explicitly mandatory, 13th-month salary bonus payments are customary in South Africa and paid out in December.