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SALARIES AND WAGES
SOUTH AFRICAN STATUTORY REQUIREMENTS
  
When employing personnel, you need to have proper records regarding their service conditions, remuneration, fringe benefits, deductions and their net salaries and wages. There are also various statutory requirements as to certain deductions and records that should be kept. In accordance with various acts or legislation, an employer must register with the following statutory authorities:

South African Revenue Services According to legislation you need to register with the South African Revenue Services for both Employees tax and Skills Development Levy should you employ any persons in your business.
  • Employees Tax

When an employer pays remuneration to an employee or employees for services rendered by them, the employer must deduct tax from their remuneration. (Salaries or wages, overtime pay and bonuses according to prescribed rules and at the rates laid down by law (4th Schedule to the Income Tax Act No.58 of 1962, as amended and is managed by the South African Revenue Services). Such amounts must be paid over to your local South African Revenue Service (SARS) office. All businesses which employ people are obliged to register as an employer with the local South African Revenue Services (SARS) office within 14 days of becoming one by completing form IRP101.

 

Employees are responsible for the payment of tax on their salaries or wages if they earn above a certain amount. However, the employer is obliged to deduct tax PAYE and SITE from payments made to employees and pay this to the local Office of the South African Revenue Services. You may also visit the SARS Website http://www.sars.gov.za to read more.

  • Skills Development Levy (SDL)

This is a compulsory levy for the purposes of funding education and training and is administered by the Skills Development Act, 1998, as amended, and is managed by the South African Revenue Services. This levy is calculated on the remuneration less certain prescribed exclusions. The calculations and amount payable must be submitted and paid on a monthly basis on the Employees Tax (PAYE) and Skills Development Levy (SDL) Return for Remittance form.

When the employer registers for Employees tax (PAYE) with the local South African Revenue Services (SARS) office, the employer will also be issued with a registration number for the Skills Development Levy. You may also visit the SARS Website http://www.sars.gov.za to read more.

Unemployment Insurance Fund

    This is a compulsory contribution for the purposes of funding unemployment benefits and is administered by the Unemployment Insurance Act, 63 of 2001 and Unemployment Insurance Contributions Act, 2002 – (previously the Unemployment Insurance Act, 1966), as amended and is managed by the Unemployment Insurance Commissioner. This fund provides for the insurance of employees against the risk of loss of earnings arising from unemployment due to the termination of their employment illness, maternity, etc. An employer is required within 14 days of commencing business, to submit to the Unemployment Insurance Fund a notification on form UIF, which can be obtained, from the fund or local branch of the Department of Labour, on application. The employer must register with the Unemployment Insurance Commissioner local office of the Department of Labour office. A registration number will be furnished, which you must quote in all correspondence with the Unemployment Insurance Fund. You may also visit the Unemployment Insurance Fund Web site http://www.uif.gov.za to read more.

    Note that as from April 2002, an employer must pay the contributions and any employer’s contributions to the South African Revenue Services if you are registered for Employee’s Tax.

Workman's Compensation

    This is a compulsory contribution for the purposes of funding injury on duty compensation and is administered by Compensation for Occupational Injuries and Diseases Act, 1993 (Act No 130 of 1993) - (previously the Workmen's Compensation Act, 1941), as amended and is managed by the Compensation Commissioner. This fund provides for the insurance of employees against the risk of loss of earnings and medical expenses arising from injury on duty. An employer is required within 14 days of commencing business, to register with the Compensation Commissioner on a prescribed form, which can be obtained from the Commissioner or local branch of the Department of Labour, on application. The employer must register with the Compensation Commissioner or at the local office of the Department of Labour. A registration number will be furnished. You may also visit the Workman Compensation Web site http://www.wcomp.gov.za to read more.

Regional Services Council

    Regional Services Councils (RSC's) are statutory autonomous bodies, similar to local authorities, and have been established to render services on a regional basis. Any person within the region who has other persons in his employ or who owns a business in the region must register with the local RSC. You need to access the guidelines and or legislation of the specific Regional Services Council that applies to the region in which your business is registered. A registration number will be furnished. You will receive periodically returns to submit together with a payment.