Global Payroll — 17 min
Which benefits should you offer employees in South Africa?
While South Africa’s government requires employers to offer certain statutory benefits, companies looking to hire the best talent must offer more than just the baseline. Remote’s guide on hiring workers in South Africa covers a variety of topics including labor laws, payroll, and benefits. In this guide, we will examine benefits in South Africa more closely.
All full-time employees in South Africa are entitled to benefits. Full-time employment in South Africa typically means 40- to 45-hour workweeks.
Employers may use probationary periods to evaluate employees before bringing them on as full hires. However, employees are still entitled to statutory benefits during probationary periods. The only difference between a probationary period and regular employment is that employees on probation may be terminated more easily than employees who are not.
Contractors are not entitled to benefits in South Africa. Employees on fixed-term contracts may be entitled to benefits, depending on the nature of the contract. Employers should be cautious not to misclassify contractors or break South Africa’s labor laws on the proper use of fixed-term contracts.
Employees who work overtime are entitled to overtime pay in South Africa. Employees can only work three hours of overtime per day up to 10 hours of overtime per week. If the employee agrees, overtime limits can be extended to 15 hours a week, but only for two months out of the year.
Overtime rates must be at least 150% of regular wages.
Employees always receive overtime pay for working on Sundays. Employees who normally work Sundays must receive at least 150% pay, while employees who do not regularly work Sundays must receive at least 200% pay.
Employees in South Africa are entitled to receive overtime pay as extra paid time off if they choose. Employers cannot force employees to accept extra PTO in lieu of extra pay. Employees who accept PTO instead of overtime pay earn PTO hours at the same rate they would earn pay: 150% in most scenarios, 200% for Sunday workers who do not normally work Sundays.
Paid time off is a statutory requirement in South Africa, meaning employers must offer their employees a minimum amount of PTO to be compliant with national law.
Full-time employees must receive a minimum of 15 paid days off per year in addition to paid time off during all public holidays. If a holiday falls on a weekend, the paid holiday for workers is recognized the next Monday. South Africa recognizes 12 public holidays each year.
Employers in South Africa must allow unused PTO to roll over. Employers cannot take away unused PTO. When employees leave, they are entitled to a payout of all unused PTO.
While these laws may sound like they would allow employees to build massive PTO banks indefinitely, that is not usually the case. Employers can set expiration dates for unused PTO in many circumstances. Remote’s legal team can help your company establish a compliant PTO policy in South Africa.
South Africa also requires employers to provide a type of paid leave called family responsibility leave. Employees are eligible for family responsibility leave after working for four consecutive months with the same employer for an average of four days per week.
The South African government establishes strict use cases for family responsibility leave. Employees may only use this leave after the birth of a child, to care for their own sick child, or to grieve the loss of an immediate family member.
The list of immediate family members whose deaths are covered by family responsibility leave is:
Employees receive three days of family responsibility leave per year. Family responsibility leave resets on the anniversary of the employee’s first day of employment every year. Employees may not accrue or roll over family responsibility leave. Employers can offer additional leave, although the mandatory three days is the most common amount.
Sick leave in South Africa is not included under PTO. Instead, businesses in South Africa must offer employees sick time on a three-year renewal period.
Employees receive one day of sick leave for every 26 days of work during their first six months of employment. After the first six months, employees immediately receive access to a bank of sick leave that must include a minimum of 30 paid sick days. Employees who normally work six days per week receive 36 days in their sick leave banks.
The bank resets after three years on the anniversary of the employment date. Employees are not entitled to accrual of sick leave: unused days do not get added to the next three-year period.
Any leave taken during the first six months is subtracted from the total bank. If employees take the full amount of sick leave in the bank and leave before three years, they are not required to pay back any time taken to the employer.
Employers may require employees who take two consecutive sick days to prove their illness with documentation from a medical provider. Friday and Monday do not count as consecutive days under this rule.
Employees in South Africa are entitled to at least four months of unpaid maternity leave. Although employers typically do not pay employees on maternity leave, South Africa’s UIF government program pays 60% of the employee’s salary for up to 121 days.
When using maternity leave, employees are eligible to begin leave one month before the baby’s due date. Employees who have just given birth must receive special medical permission to return to work before six weeks after birth.
In the past, partners of people who give birth did not enjoy government-protected paternal leave. In 2020, though, South Africa enacted new laws granting rights for parental leave. Employers must now provide at least 10 unpaid days of parental leave to partners after the birth of a child. Parents may apply to receive UIF benefits during this time. Employees can only take parental leave once per calendar year.
Although the country’s public healthcare system is young, South Africa does provide free medical care to everyone in the country. Public health insurance does not provide the same quality of healthcare that private insurance provides, however. Because of this, many employers choose to attract top talent with the promise of better coverage.
Employers in South Africa have two choices on health insurance. First, they can work with a benefits provider to offer a group policy to all employees. Many larger employers choose this option. At smaller companies with fewer employees, the employer usually chooses to provide a stipend instead, allowing employees to choose their own plans.
Health coverage in South Africa can be highly expensive. For this reason, the best talent in the country usually only considers employers that provide extra health coverage.
Like companies in many countries, businesses in South Africa usually give employees a bonus at the end of the year. This bonus, often referred to as the 13th month bonus, is distributed in December and amounts to one month’s pay for each employee. Though the bonus is not a statutory requirement, it is a common expectation.
If your company chooses to hand out 13th month bonuses, remember to account for that money when calculating employee withholding.
Many employers in South Africa provide some sort of pension scheme or retirement contribution system to employees. Employers in certain industries are allowed to make participation in these programs mandatory for all employees. Funds vary widely, from defined benefit pension schemes to defined contribution programs. Contributions are tax-deductible, up to a limit.
South Africa’s government provides pension payments to qualifying individuals over the age of 60 and individuals who suffer from permanent disabilities. This public program is needs-based and not funded by fund-specific contributions from employees and employers.
Employers must register and contribute to the UIF in South Africa. This program funds payments to temporarily unemployed workers, new parents, and people with disabilities.
Contributions to the UIF are straightforward: 1% of the employee’s salary from the employee and 1% from the employer. Contributions are delivered to the UIF monthly.
The SDL is a business-only tax based on the amount an employer spends on payroll. The funds of the SDL go toward helping workers develop their skills. Like UIF contributions, SDL contributions total 1% of total salaries, but employees do not have to contribute any of their own salaries to the fund.
COIDA functions as South Africa’s workers’ compensation program for workers who are injured or infected with an illness on the job. Distributions from COIDA to injured workers are no-fault, so anyone injured at work is eligible, regardless of how the injury occurred. Contributions vary greatly by industry and company. Remote can help companies calculate and pay their COIDA obligations in South Africa.
Remote has all the expertise and assistance to help you provide the best benefits to your team in South Africa. Whether you have one employee or dozens, Remote can help your company stay compliant while offering a competitive benefits package to attract the best talent. Contact us today at email@example.com to learn more about our South Africa global employment and employer of record solutions.
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