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How To Hire New Remote Employees | South Africa

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South Africa

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South Africa

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South Africa

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capital city
South Africa
currency
South African Rand(ZAR)
language spoken
11 Official Languages
payroll frequency
Monthly, bi- monthly and weekly
employer taxes
7.5% to 15%
vat - standard rate
15%
cost of living index
R8,000 (low)
gdp - real growth rate
2.16%
termination process
Varies
employee protections
Moderate
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Overview

In the third quarter of 2021, employment in the formal non-agricultural industry grew by 52 000, bringing the total number of people working in the formal non-agricultural sector in South Africa to roughly 9.62 million. Additionally, the formal sector jobs increased by 54 000 year on year, according to a study released by Statistics South Africa's (Stats SA),  Quarter-on-quarter, total employment rose by 52 000 (0.5%), from 9 568 000 in June 2021 to 9 620 000 in September 2021. The rise was attributed to job increases in the following industries: community services (63 000 jobs, or 2.3 percent), mining (7 000 jobs, or 1.5 percent), and transportation (7 000 jobs, or 1.5 percent) (1 000 or 0.2 percent). The power industry did not experience any job increases but trade (-13 000 or -0.6%), business services (-3 000 or -0.1%), manufacturing (-2 000 or -0.2%), and construction (-2 000 or -0.2%). (-1 000 or -0.2 percent) reported job decreases. Overall, between September 2020 and September 2021, the total employment in the country increased by 56 000 (0.6%).

Public Holidays

1 January- New Year's Day

2 January- Human Rights Day

21 March - Good Friday

15 April - Family Day

18 April - Freedom Day

27 April - International Workers' Day

2 May  - Youth Day (in South Africa)

16 June - National Women's Day

9 August - Heritage Day

24 September - Day of Reconciliation

16 December - Boxing Day

25 December - Christmas Day

Minimum wage

The minimum wage for domestic workers is R21.69 per hour, R173.52 per day, R867.60 per week, and R3470.4 per month. However, the Minister of Employment and Labour announced that the national minimum wage for each regular hour worked will be increased from R21.69 to R23.19 effective from March 1, 2022. The new regulation applies to employees who work eight hours a day, five days a week. 

Payroll cycle

South Africa does not have a defined payroll cycle but it is usually specified in the employment contract, agreed upon by the employee and employer. Payroll might be processed monthly, weekly, or bi-weekly.

Taxation

South Africa uses a residence-based taxation system whereby residents are taxed on worldwide income and non-residents are taxed on South African-sourced income. With 22.2 million of its 58 million-strong population paying taxes, most of the state’s income comes from personal and corporate taxes. Indirect taxes, though, such as Value-Added Tax do account for nearly a third of the government’s coffers.

Leaves

Annual Leave 

Every employee is entitled to 21 consecutive days of paid yearly leave. If the person works a five-day week, they are entitled to 15 working days a year, and 18 working days a year if the employee works a six-day week.

Maternity Leave 

A pregnant woman has the right to four months of maternity leave but it is unpaid unless the employee has been contributing to the Unemployment Insurance Funds (UIF).  Maternity leave may commence four weeks before the baby's delivery but it may also be taken early if the woman's medical condition prevents her from working. After delivery, the employee is required to take six weeks off. If the employee has been contributing to UIF, they are eligible for a maternity benefit of up to 60% of their remuneration, depending on their income level. Benefits are payable for a maximum of 121 days.

Paternity Leave 

After the birth of their child, South African male employees are entitled to 10 days of paternity leave.

Adoption Leave of Absence

A single adoptive parent is entitled to 10 weeks of consecutive leave. If there are two adoptive parents, only one is entitled to the 10 weeks of leave while the other adoptive parent is entitled to 10 consecutive days of conventional parental leave

Sick Leave 

An employee is entitled to paid sick leave after every 36 months beginning on the first day of work and it should be the precise amount of days they typically work in a regular six-week period. Therefore, if an employee works five days a week, they are entitled to 30 days of paid sick leave and 36 days if they work six days a week. On average, an employee may have 10 to 12 days of paid sick leave a year spread out across three years.

However, during the first six months of employment, employees are only entitled to one day of paid sick leave for every 26 days worked. 

Termination process

Termination 

Employment law does not recognize the concept of dismissing an employee's employment "without cause" or "at will," and when ending a contract, the employer is required to act equitably in both substantive and procedural terms.

Notice Period 

All employers must give a notice of termination except in material breach of the employment contract. The notice period depends on the length of service as follows: 

  • One week if the employee has worked in the company for six months or less; 
  • Two weeks if the employee has worked in the company for more than six months but less than a year.
  • Four weeks if the employee has worked in the company for a year or more.

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