Employer of Record South Africa
Employer of Record South Africa
South Africa’s complex labor regulations often present challenges for businesses. Agility provides a streamlined solution for hiring local talent.
Currency
Rand (ZAR)
Population
60 million
Capital City
Cape town
Minimum Wage
R27.58 per hour
Local Language
Zulu, Xhosa and English
Working Hours
45 hours per week
Employer of record in South Africa
When you hire in South Africa, the Employer of Record acts as the legal employer for your workers, taking care of the entire employment life cycle. This includes handling all the legal legwork, such as payroll, taxes, mandatory benefits, employment contracts, and ensuring compliance with South Africa labor laws.
- Manages all employment aspects
- Acts as a legal employer
- Simplifies hiring
- Compliantly employing a worker
How does an Employer of Record South Africa work?
Agility
We handle the legal aspects of hiring workers, including managing HR, benefits, payroll, and taxes.
Company
Focuses on core business activities. Manages assigned employee’s tasks and performance.
Employee
Performs the assigned work, just like any other employee.
Payment Frequency
Payroll in South Africa can be monthly, bi weekly or weekly.
Employee Tax – 1% to 42%
Unemployment insurance fund: 1%
Income tax: 0% – 41%
Employer Tax – 2.5% to 3%
Unemployment insurance fund: 1%
Workers compensation fund: 0.5% – 1%
Skill development levy: 1%
Probation Period
Typically a probation period is 3 months long.
Employment Law
Safe Place of Work
Whistleblower Protection
Reasonable Accommodation
Equal Treatment and Non-Discrimination
Written Employment Contract
Union Membership
Protection from Unfair Dismissal
Overtime Pay
Employee Termination
Termination can occur by mutual agreement, with notice, or without notice in cases of serious misconduct. Notice periods are typically 1 week for less than 6 months of service, 2 weeks for 6 months to 1 year, and 1 month for more than 1 year.
Dismissals must be for fair reasons, such as operational requirements or misconduct, and follow a fair procedure, including a disciplinary hearing where the employee can respond. Written notice specifying the reason and date of termination is required.
Employees dismissed due to redundancy are entitled to severance pay, generally equivalent to 1 week’s salary per year of service.
Employee Benefits
Statutory Benefits
Unemployment Insurance Fund (UIF):
Provides short-term financial assistance for unemployment, illness, maternity leave, and adoption leave.
Compensation for Occupational Injuries and Diseases (Workers’ Compensation Fund)
Covers medical costs and compensation for employees who suffer work-related injuries or diseases.
Common Additional Benefits
Medical Aid Contributions
Retirement Fund Contributions
Performance Bonuses
Car Allowance
Housing Allowance
13th Cheque
Flexible Working Hours
Life and Disability Insurance
Paid Maternity/Paternity Leave
Wellness Programs
Professional Development and Training
Education Assistance
Travel Allowance
Statutory Leave
FAQ
Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.
Agility EOR
- We manage the onboarding process and ensure everything’s in order before your employee starts
- We make sure your employees are treated fairly and compliantly in their relevant territory
- We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
- We provide compliant contracts, process local payroll, and file taxes
- We issue payslips and handle payments to the employee and authorities
Your Company
- You find and manage your employees’ daily tasks
- You support their development through their work
- You follow our guidance on employment laws and best practices
- You ensure payroll bills are paid to Agility EOR on time
Benefits of using an Employer of Record (EOR)
- Faster and easier hiring: No need to set up your own legal entity.
- Reduced risk and compliance burden: We handle the legal and administrative complexities.
- More time and resources: Focus on your core business while we manage your employees.
There are various ways to employ people in Slovenia, each with differing levels of costs and compliance:
Employee is employed by you and paid by you from your overseas Company
- Pros: It appears to be the most affordable and straightforward choice.
- Cons: There would be application of South African employment legislation and the employee will not be able to make the legally mandated social security contributions.
Entity Set-up
- Pros: This may be the most inexpensive option if you need to hire a large staff—usually more than fifteen—for your business.
- Cons: Creating a formal corporate structure and keeping up tight adherence to South African tax and employment laws can be expensive and time-consuming, particularly for smaller enterprises. For companies with fewer than 15 employees, this strategy frequently becomes unfeasible.
Using an Employer of Record
- Pros: Employer of Record services are the fastest and least expensive way to handle payroll, HR, and compliance work in South Africa. This is especially true when it comes to setting up employer-employee relationships for groups of less than fifteen people.
- Cons: Expensive to hire a big staff. It can be challenging to decide which Employer of Record provider to select.
Hire a contractor in South Africa
- Pros: This option works well when the employee isn’t contracted to your business and can send a stand-in for them on their days off.
- Cons: Hiring a full-time employee who is just committed to your business without obtaining the appropriate employment classification is illegal in South Africa. A misclassification like this may result in fines or even criminal proceedings.
As long as the employee is employed by other businesses, has the autonomy to choose how best to complete their tasks, and has the ability to designate a substitute contractor for their absence.An individual who works exclusively for your business and whose responsibilities are set by your firm is required by law to be considered an employee in South Africa. To do otherwise would be to violate employment law in South Africa.
In South Africa, misclassifying an employee may result in hefty fines, extra holiday pay and social security contributions to be paid, the requirement to set up a local presence, or even legal action from the employee for violation of their rights at work.
First things first: you need to register your firm with the Commercial Register and get a trading license from the appropriate authorities in South Africa.
Though the initial registration process seems straightforward, setting up a physical office for tax purposes, opening a bank account in South Africa (which frequently necessitates physical presence), handling payroll software that complies with South African regulations, and meeting tax filing requirements all add complexity to the setup process.
Employing staff in South Africa entails following certain regulatory requirements. Said another way, HR compliance guarantees that your business adheres properly to all laws pertaining to employment and work practices.
Why, though, is it so crucial? HR compliance protects your company and your employees in South Africa; it’s more than just following the rules. Respecting labor laws ensures that your employees receive equitable treatment. These standards cover things like annual and sick leave, minimum salary, and suitable working hours. This promotes a healthy work atmosphere and reduces the possibility of fines, legal ramifications, and even litigation due to non-compliance.
Tax and social security requirements are made simpler when Agility EOR serves as your Employer of Record in South Africa. Our team takes care of all employee-related paperwork and payments, guaranteeing full compliance, allowing you to worry-free concentrate on operating your company.
Agility EOR manages the complexities of employment law and compliance in South Africa, but your company is still in charge of managing your team on a daily basis, including handling performance issues, enforcing discipline when needed, and promoting a positive work environment through open communication.
Agility EOR handles the legal side of things in South Africa, so you can focus on managing your team and their daily tasks.
In South Africa, both employers and employees are required to make tax contributions. Employers are responsible for three main social security payments: contributions to the Unemployment Insurance Fund (UIF), the Skills Development Levy (SDL), and Compensation for Occupational Diseases.
Employees, on the other hand, must pay income tax through the Pay-As-You-Earn (PAYE) system and make contributions to the Unemployment Insurance Fund.
Workers that have a conventional employment contract and are covered by legal safeguards are employed by a South African Employer of Record. Together with any available tax credits, this also includes statutory benefits like sick pay, maternity leave, and yearly leave. It is noteworthy that the South African public healthcare system extends coverage to all citizens, not only those who work there.
Agility EOR handles the administrative burden of HR compliance for you:
Trusted Partners: Agility EOR collaborates with leading South Africa employment lawyers and advisors. This ensures your employment contracts and other essential documents strictly adhere to all local legal requirements.
In-Depth Knowledge: We maintain a deep understanding of intricate aspects of South Africa employment law, including payroll, social security, data privacy, notice periods, and remote work regulations.
Swift Action: If an issue arises, our internal team are immediately on hand to help and assist.
Wondering if expanding in South Africa is right for you?
Read on or speak to a member of our team now
South Africa Employer of Record Benefits
When you choose Agility EOR to expand in South Africa, we guarantee an EOR Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in South Africa so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs – no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the South African authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning South African payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.
Download our full South Africa Employment Guide
Find out all about employing in South Africa
Get in touch
Our team of Employer of Record experts are ready to discuss your global expansion requirements. Fill out your details in the form provided and we will be in touch as soon as possible.