Table of Contents

South Africa

Table of Contents


South African Rand (ZAR)

Payroll Frequency


Employer Taxes


About South Africa

South Africa is a country located on the Southern Coast of the African continent, neighboring other countries including Zimbabwe and Namibia. It has the largest and most developed economy on the continent and is a country that is rich in natural resources. The national culture is a blend of Africa, European and Indian cultures reflecting the diverse population, immigration, and colonial history of the region. People in South Africa speak more than 10 languages, but English and Afrikaans are the most commonly used, especially in professional environments. South Africans practice many religions but Christianity, Islam, and Hinduism are the most dominant. South Africans are friendly and accommodating and will invite you to enjoy a braai, or roasted meat, which is a tradition with communities coming together to eat, drink and enjoy each other’s company. Current local political tensions are high with the current president being pressured to step down amid charges of corruption and abuse of power. (Kwintessential).

Employment Relationship

• Permanent Employment

South Africa's Labour Relations Act defines permanent employment as the employment relationship existing within the framework of an indefinite-period contract where no specified duration is agreed to by the parties. Permanent employment means that employees are working directly for the employer and being paid directly by the employer. A permanent employment relationship usually provides for annual leave, sick leave, maternity leave, subsidized health care, assistance for further study, and contributions to a retirement plan.

• Fixed-Term or Specific-Purpose Contracts

Fixed-term contract workers may not be hired for permanent work. A fixed-term contract's duration must be clearly specified, but the law does not prescribe a maximum duration. Fixed-term employees earning less than the threshold (ZAR 211,596.30 (South African rands) per annum) cannot be hired for more than three months. The non-renewal of a fixed-term contract is considered a dismissal in circumstances where renewal on similar terms was expected but denied by the employer, where employment on an indefinite basis was expected but denied, or where it was offered on less favorable terms by the employer. If the contract continues without renewal, it is considered to be for an indefinite term. Where an employee is hired on a fixed-term contract longer than 24 months, an employer must pay the employee one week's wage on the contract's expiry for each completed year of the agreement.

• Temporary Employment Contratcs

The Labour Relations Act of South Africa defines temporary employment as the procurement of a person's services by a temporary employment agency for a client. The law does not prescribe any limit for the contract's duration where employees earn above the threshold determined by the Minister of Labour (ZAR 211,596.30 (South African rands) per annum). Those earning below the threshold can be employed in temporary service work for a period of not more than three months. They can only be employed to replace a temporarily absent employee of the client or for a job determined to be a temporary assignment in the collective agreement. A temporary employee may be employed for more than 3 months if the period of time does not exceed that which has been deemed temporary based on a collective agreement concluded in a bargaining council. Upon termination of a temporary contract, the employee does not have a right to further employment (either renewal of the contract or permanent employment).

Probationary Period

The labor law only stipulates that a probationary period should be of reasonable duration, negotiated, and stipulated in the employment contract. The probationary period must be determined in advance. The probationary period can only be extended for suitable reasons, and the extension period must be reasonable to achieve the employer’s legitimate purpose. Probation should not be used to deprive an employee of the opportunity for permanent employment. It is unfair for employers to dismiss employees who complete their probationary periods and then replace them with newly-hired employees. Employees can be dismissed during the probationary period for incompetent performance.

Working Hours

According to South Africa's labor law, the statutory number of work hours cannot exceed 45 hours weekly, 9 hours daily (excluding lunch break) if working a 5-day week, and 8 hours daily (excluding lunch break) if working more than 5 days a week. Working hours can be extended by up to 15 minutes a day or 60 minutes a week by collective agreement.  Employers and employees can also agree on a compressed working week where employees work up to 12 hours a day without exceeding the weekly limit of 45 hours.  

Holidays / PTO

• Statutory Holidays

In 2023, public holidays are as follows: New Year’s Day: January 1 (Observed January 2) Human Rights Day: March 21  Good Friday: April 10 Family Day: April 13 Freedom Day: April 27 Workers' Day: May 1 Youth Day: June 16 National Women’s Day: August 9  Heritage Day: September 24 (Observed September 25) Day of Reconciliation: December 16 Christmas Day: December 25 Day of Goodwill: December 26

• Paid Annual Leave

Employees are entitled to 21 consecutive days of annual leave after 1 year of continuous service with an employer. Alternatively, by agreement, they can receive 1 day of annual leave for every 17 days worked or 1 hour of annual leave for every 17 hours worked. An employer must pay the employee for the annual leave before its commencement and at a rate at least equal to their regular wages. Annual leave cannot be accumulated from one year to the next. An employer must ensure employees take annual leave within 6 months after the end of the annual leave cycle. At the termination of the employment contract, the employer must pay the employee for unused annual leave. 

• Sick Leave

South Africa's Basic Conditions of Employment Act requires employers to grant employees 6 weeks of paid sick leave in each 36-month sick leave cycle of employment with the same employer. An employee is entitled to 1 day of paid sick leave for every 26 days worked during the first 6 months of employment. During an employee's first sick leave cycle, an employer may reduce the employee's entitlement to sick leave by the number of sick leave days taken in the first 6 months of employment. Employees are required to provide a medical certificate after 2 days of illness. The employer must pay employees their regular wage on their usual payday. If the number of days of paid sick leave increased through agreement, an employee would be entitled to 75% of the wages for the extra leave days.

• Maternity Leave

In South Africa, a pregnant employee is entitled to at least 4 consecutive months' unpaid maternity leave. Under the Unemployment Insurance Act, an employee contributing to the Unemployment Insurance Fund (UIF) is eligible for a maternity benefit paid as 66% of her average earnings in the last 6 months. This benefit is paid for the entire duration of maternity leave. Full benefits are also paid for 4 months in case of miscarriage. The employee can commence maternity leave at any time from four weeks before the expected date of birth or on a date certificated by a medical practitioner or a midwife. A pregnant employee must notify her employer in writing at least 4 weeks before her maternity leave commencement and at least 4 weeks before returning to work. Employees who suffer a miscarriage during the third trimester of pregnancy or bear a stillborn child are entitled to maternity leave of 6 weeks after the miscarriage or stillbirth. 

• Paternity Leave

South Africa's labor laws grant paternity leave of ten consecutive days to fathers. The Unemployment Insurance Fund pays this leave at a rate of 66% of the father's earnings. An adoptive father is also entitled to a paternity leave of ten days from the date the adoption order is granted or that a competent court places a child in the care of a prospective adoptive parent.

Termination of Employment

• Notice Period

The labor law of South Africa requires notice periods of the following lengths: 1 week if the employee has worked up to 6 months 2 weeks if the employee has worked from 6 months to 1 year 4 weeks, if the employee— (i) has worked for 1 year or more; or (ii) is a farm worker or domestic worker who has been employed for more than 6 months. Employers can waive the notice period requirement by remunerating the employee for the notice period's duration.  A collective agreement can permit a shorter notice period but not a longer one. The notice of termination must be in writing. Notice of termination must not be given while the employee is on leave. No agreement can require or permit an employee to give a period of notice longer than that required of the employer. 

• Severance Benefits

South Africa's labor law requires an employer to pay severance if an employee is terminated because of the employer's operational requirements related to economic, technological, or structural needs. The severance pay will be at least 1 week's salary for every year of continuous service with the employer. Severance pay is not paid if an employee unreasonably refuses to accept their employer's offer of alternative employment.  When an employee is terminated for other reasons, employers must compensate them for any unused leave. If the employee has worked at least 4 months but not an entire annual cycle, then the employee is entitled to compensation equal to 1 day's wage for every 17 days worked.