Employer of record in South Africa: cost and rules (2026)

Employing someone in South Africa costs the employer about 1.6% on top of gross salary in statutory contributions, plus an EOR fee of $199 to $699 per month at providers that publish prices ("from" prices). Example: a gross salary of ZAR 40,000 per month costs ZAR 40,649 per month (about $2,429) before any EOR fee.

Rates checked: 2026-11-14. South African employer on-costs are light. The employer pays a small unemployment insurance contribution that stops at a monthly earnings ceiling, a skills development levy on payroll, and a workplace injury assessment that depends on the industry. There is no mandatory employer pension or medical aid, and no statutory 13th salary. Estimates only, not advice: see the note at the bottom of the page.

Employer contributions in South Africa

Minimum wage: ZAR 5,240 per month. The legal minimum is set per hour: R30.23 per ordinary hour from 1 March 2026 (it was R28.79). The monthly figure is our own conversion, assuming a 40-hour week and 52 weeks a year (R30.23 x 40 x 52 / 12). Actual monthly pay depends on the hours worked. Sector rules and bargaining councils can set higher minimums. Source: Government Gazette 54075, Notice 7083 of 3 Feb 2026 (National Minimum Wage Act)

Worked example: ZAR 40,000 gross per month

Contractor, EOR or own entity in South Africa

Contractor

South African tax authorities look at the real working relationship, not the label on the contract. SARS applies a 'dominant impression' test, and a worker can also be treated as an employee for tax if the work is done mainly at the client's premises under its control over how and when it is done. A genuine contractor pays their own income tax. If the arrangement looks like employment, the client can be liable for the employee's tax that was not withheld, plus penalties and interest. Source: SARS, Interpretation Note 17 on independent contractors

Own entity

A private company is registered with the Companies and Intellectual Property Commission (CIPC). The CIPC lists a registration fee of R125 for a private company and a name reservation fee of R50. A standard company with a short standard memorandum of incorporation can be registered in about 1 working day; a customised memorandum takes about 5 days. You also need a local bank account, tax and UIF/COIDA registrations, and payroll before you can employ staff. Source: CIPC, Company registration

Leave, notice, probation and termination

Annual leave: 15 days. The law gives 21 consecutive days of paid leave per 12-month leave cycle, which is 15 working days on a five-day week. Employers and employees can agree on another accrual method, for example one day per 17 days worked.

Public holidays: 12. There are 12 public holidays a year. When one falls on a Sunday, the following Monday is also a holiday, so 2026 has 13 holiday dates: 9 August (National Women's Day) is a Sunday and 10 August is also a holiday. Source: Basic Conditions of Employment Act 75 of 1997, s. 20; gov.za, Public holidays

Notice

Under the Basic Conditions of Employment Act, section 37, the minimum notice is 1 week if the employee has worked 6 months or less, 2 weeks for more than 6 months up to 1 year, and 4 weeks for 1 year or more. The contract can set longer notice. A collective agreement cannot set shorter notice, except that it may reduce the 4 weeks to no less than 2. Source: Basic Conditions of Employment Act, s. 37 (as amended)

Probation

The law sets no fixed maximum probation period. The Code of Good Practice: Dismissal (in force since 4 September 2025) says the period must be agreed in advance and be reasonable for the job. The employer must give reasonable guidance, and the employee must get a chance to respond before dismissal or an extension. Reasons for dismissal during probation may be less demanding than for a permanent employee, but misusing probation to avoid permanent status can make a dismissal unfair. Many employers use 3 months in the contract. Source: Code of Good Practice: Dismissal, Government Gazette 53294

Termination

An employee dismissed for the employer's operational reasons (for example, retrenchment) is owed severance pay of at least one week's pay for each completed year of service (section 41). Dismissals must also be procedurally and substantively fair under the Labour Relations Act. Source: Basic Conditions of Employment Act 75 of 1997, s. 41

What the calculator simplifies

• The injury assessment rate depends on the industry class. We use 0.18% for low-risk office work; other classes run up to about 3.3%.
• We charge the Skills Development Levy on every salary. It is only due when the employer's yearly payroll is expected to exceed R500,000.
• The yearly injury-assessment earnings ceiling is spread evenly over 12 months, and the employer's minimum yearly assessment is not modelled.
• Pension, provident fund and medical aid are not included. They are only payable if the contract, company policy or a sector bargaining council agreement requires them.
• A 13th cheque is not included, because it is not required by law.
• Employee income tax (PAYE) and the employee's own UIF share are deducted from salary and are not employer costs.
• The Employment Tax Incentive for young low-paid hires and sector-specific levies are not modelled.

EOR provider prices

Prices are "from" (starting) prices as shown on each provider's own page, usually per employee per month. What you pay can be higher and depends on country, headcount and contract length. Sorted by price, lowest first; providers that publish no price come last.

Affiliate disclosure: we may join providers' affiliate programmes, so links may become affiliate links. Right now the site has no affiliate links. Order is by published price; ties are listed alphabetically. Read the disclosure.

Calculator for South Africa

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FAQ

How much does it cost to employ someone in South Africa?

On top of gross salary, statutory contributions and mandatory accruals add about 1.6% at a gross salary of ZAR 40,000 per month. That is a total of ZAR 40,649 per month before any EOR fee.

How much does an employer of record cost in South Africa?

Providers that publish a price list charge $199 to $699 per month for EOR plans ("from" prices, checked 2026-11-14). This is on top of salary and the statutory employer costs above. Source

How much paid leave do employees get in South Africa?

Annual leave is 15 days, plus 12 public holidays. The law gives 21 consecutive days of paid leave per 12-month leave cycle, which is 15 working days on a five-day week. Source

What is the notice period in South Africa?

Under the Basic Conditions of Employment Act, section 37, the minimum notice is 1 week if the employee has worked 6 months or less, 2 weeks for more than 6 months up to 1 year, and 4 weeks for 1 year or more. The contract can set longer notice. A collective agreement cannot set shorter notice, except that it may reduce the 4 weeks to no less than 2. Source

Is there a probation period in South Africa?

The law sets no fixed maximum probation period. The Code of Good Practice: Dismissal (in force since 4 September 2025) says the period must be agreed in advance and be reasonable for the job. The employer must give reasonable guidance, and the employee must get a chance to respond before dismissal or an extension. Reasons for dismissal during probation may be less demanding than for a permanent employee, but misusing probation to avoid permanent status can make a dismissal unfair. Many employers use 3 months in the contract. Source

What are the rules on ending employment in South Africa?

An employee dismissed for the employer's operational reasons (for example, retrenchment) is owed severance pay of at least one week's pay for each completed year of service (section 41). Dismissals must also be procedurally and substantively fair under the Labour Relations Act. Source

Sources

Rates checked: 2026-11-14.

• Government Gazette 54075, Notice 7083 of 3 Feb 2026 (National Minimum Wage Act)
• SARS - Unemployment Insurance Fund
• SARS - Skills Development Levy
• Compensation Fund, Government Notice 1282 (2020) and Notice 3910 (2026)
• Basic Conditions of Employment Act 75 of 1997, s. 20; gov.za, Public holidays
• Basic Conditions of Employment Act, s. 37 (as amended)
• Code of Good Practice: Dismissal, Government Gazette 53294
• SARS, Interpretation Note 17 on independent contractors
• CIPC, Company registration