Hire in South Africa

Employer of record in South Africa

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in South Africa, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in South Africa―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in South Africa and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in South Africa

Three major employment laws govern working conditions in South Africa. The Basic Conditions of Employment Act 75 of 1997 regulates issues like working time, leave, and termination. The Labour Relations Act governs freedom of association, collective bargaining, strikes, lockouts, and other forms of industrial action, and the Employment Equality Act regulates discrimination and affirmative action.

Since employment in South Africa is highly regulated, your employment practices must be compliant. As your employer of record and PEO in South Africa, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.

Employment contracts in South Africa

As you look to hire employees in South Africa, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The regular workweek varies, but the maximum allowable is 45 hours. For employees who work five days a week, the workday cannot exceed nine hours, and for those who work more than five days a week, it cannot exceed eight. The maximum hours in a workday cannot exceed 12, even with overtime. Some collective agreements allow employers to average work hours and overtime over up to four months.

Employees are entitled to 36 consecutive hours off between workweeks, including a Sunday unless the employer and employee agree otherwise.

Employees cannot be required to work at night. If they agree to night work, they are entitled to extra pay or a reduction in working hours. Transportation between home and work must be available at the beginning and end of each shift.

Employees who work between 11 p.m. and 6 a.m. regularly (e.g., more than one hour five times a month or more, or 50 times per year) must be informed about the potential health and safety hazards related to night work. They also have the right to get medical exams at their employer’s expense.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• The minimum hourly wage will increase by 8.5% to 27.58 rands ($1.46) from 25.42 rands (US$1.34) including for farm and domestic workers; and to 15.16 rands (US$0.80) from 13.97 rands (US$0.74) per hour, for workers employed in an expanded.
• Overtime is generally limited to three hours a day and 10 hours a week, although a collective agreement can increase it to 15 hours a week for up to two months in any 12 months. The overtime pay rate is 150% of the normal wage.
• Employees are paid double on Sundays unless the day is part of their regular workweek, in which case they receive 150% of their normal salary.
• Employers and employees also can agree to paid time off if an employee works on a Sunday, but it must be at the higher rate of 150%.
• Collective agreements may regulate the legal salary range.

As your employer of record in South Africa, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Employers are not required to offer bonuses, but a 13th-month bonus is customary around Christmas or at the year end.

Probationary period

Employers can require probationary periods, which usually last three months and may be extended if the employer has not decided whether the employee is a good fit for the job. In this case, however, the company must give the employee a chance to defend their performance.

Termination and severance

Employees are entitled to advance written notice and/or payment upon termination, except in cases of gross misconduct.

The amount of notice depends on the employee’s tenure:

• Six months or less: A minimum of one week’s notice
• More than six months but not more than one year: Two weeks’ notice
• More than one year: Four weeks’ notice (although collective bargaining agreements may reduce it from four weeks to two)

Employers can pay employees for the notice period in lieu of providing notice.

Employers must provide terminated employees with a certificate of service that includes the start and end dates of employment, job title, a description of the work performed and the salary.

Under the Labour Relations Act, a dismissal is considered legitimate if it is based on employee misconduct, incapacity due to ill health, poor performance or on an employer’s operational requirements such as the need to close, downsize or restructure.

Upon termination, employers must pay workers for any leave or compensatory time they have earned but not taken. When workers are dismissed because of downsizing or restructuring, the employer must pay severance equal to at least one week’s pay for each full year of service. Employees who “unreasonably” refuse an employer’s offer of alternative employment lose their right to severance pay.

Workers who feel they were fired unjustly can sue their employer. If a termination is deemed unfair, the worker can get his or her job back or receive compensation of up to 24 months’ salary. Employees who leave a job because their employer made the atmosphere intolerable can claim constructive dismissal, and employees who believe they have been discriminated against can sue for damages under the Employment Equity Act.

As your employer of record in South Africa, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.

Employee benefits and paid leave in South Africa

When negotiating terms of an employment contract with a candidate in South Africa, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Pregnant employees are eligible for four consecutive months of maternity leave, with benefits paid by the Unemployment Insurance Fund. They can begin the leave within four weeks of their due date, although earlier or later start dates are allowed by mutual agreement or when medically necessary. An employee who suffers a miscarriage during the third trimester of pregnancy or who gives birth to a stillborn child receives six weeks’ leave.

Employees may not work for six weeks after giving birth unless certified by a doctor or midwife.

Maternity benefits are based on an employee’s monthly salary. Employees can receive additional benefits if stipulated in a collective agreement or contract.

Vacation

Employees who work 24 hours or more per month are entitled to 21 consecutive days of paid annual leave every 12 months when they are employed by the same organization.

If the employee and employer mutually agree, the employee may take one day of leave for every 17 days worked or one hour of leave for every 17 hours.

An employee must finish the entire 12-month leave cycle before taking leave, although employers have the right to change this rule. Employers can mandate when leave will be taken if granted within six months of the end of the year in which it was earned.

Holidays

The Public Holidays Act grants the following paid holidays:

• New Year’s Day
• Human Rights Day
• Good Friday
• Family Day
• Freedom Day
• Workers’ Day
• Youth Day
• National Women’s Day
• Heritage Day
• Day of Reconciliation
• Christmas Day
• Day of Goodwill

During election years, a 13th paid public holiday is usually declared to allow employees to vote in local elections.

If a holiday falls on a Sunday, the following Monday is considered a public holiday.

Employees who work on a public holiday are paid double their normal wage or they can exchange it for another day off if the employer agrees.

Sick leave

Paid sick leave is granted in three-year cycles, beginning from an employee’s start date, and is equal to the number of days the employee would normally work in six weeks. For example, during the three-year cycle, an employee who works a five-day week is eligible for 30 days of sick leave.

During the first six months with an employer, employees cannot take more than one sick day for every 26 days they work.

Employers are not required to pay for sick leave if an employee is absent for more than two consecutive days or more than twice in eight weeks without providing a medical certificate.

Unused sick leave is not carried over to the following year.

Health coverage

There is no statutory retirement age in South Africa.

Retirement funding in South Africa is private and voluntary, with many employers providing plans and many South Africans setting up their own savings plans. For the most part, employers and employees contribute equal amounts to private pension plans or schemes, although this is not mandatory.

Additional benefits

In addition to healthcare benefits, employees in South Africa are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in South Africa, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.

Updated: February 15, 2024

Employee onboarding with an employer of record in South Africa

We write and validate all local employment contracts, streamlining the onboarding process for you and your South Africa employees—all you have to do is provide relevant information and review and approve the employment agreement.

As your employer of record in South Africa, we will:

• Schedule a welcome call to discuss HR and employment information for South Africa, as well as answer any questions
• Prepare a customized employment contract in English (or other local language)
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your South Africa employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution to expand and hire in over 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in South Africa. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider, we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.