Payroll Outsourcing in South Africa

• Seamlessly have your payroll needs met
• Stay compliant with government regulations
• Understand the South African market better

Why Outsource Your Payroll In South Africa?

When looking for an international expansion to a market like South Africa, you will be greeted by several challenges. The most important of which are local regulations and the vastly different markets. Time and resources are of the essence at these times, meaning building an in-house payroll management team won’t be the best decision. The good news is that the outsourced payroll service prices in South Africa are much lower and can help you remain compliant. Your in-house HR services can integrate seamlessly with outsourced payroll services in South Africa

As one of the most experienced payroll outsourcing companies in South Africa, Edge can help you avoid payroll errors and ensure employee satisfaction. When employees receive timely compensation, they are likely to put their best foot forward and work more efficiently. Meaning improved productivity and enhanced business growth.

If you wish to scale and improve your core business in newer regions like South Africa, why not consider payroll outsourcing services in South Africa?

Edge – The Best Choice For Outsourcing Payroll

At Edge, our focus is not only on providing you with an outsourced payroll solution but also on acting as an extension of your in-house core team. We understand the requirements of a business venturing into the South African territory and offer clear-cut advantages to make the transition as seamless as possible.

Unmatched Flexibility

Payroll outsourcing work varies according to the company size, the area of operation, and the business model. No matter where you fit in, we have the best payroll services to offer you, tailored to your needs, so that you save more money initially. As your company grows and recruits more employees, we can eventually scale up the payroll processing capabilities as your business needs. You can also choose to integrate and outsource finance HR and payroll in South Africa to us.

Quality Assurance

Handling your company’s payroll data is a task that should be done with utmost care by payroll providers. At Edge, we respect the trust and faith you place in us more than anything else. We believe that long-term alliance is a product of trust, and payroll errors can be a spoilsport in building this trust. For this reason, our focus lies on managing payroll operations with no room for errors.

Data Security

Our payroll outsourcing model is based on state-of-the-art payroll software that compiles and stores your employee data in an encrypted format. It ensures the timely disbursement of salaries after taking deductions (taxes, insurance, etc.) into account. We do not share your sensitive data with any third-party company.

Local Expertise

Our payroll professionals have a lot of experience when it comes to the South African market. We understand the work culture, government regulations, and operative regimes of the Republic. This makes it convenient for new businesses to enter the market in a hassle-free manner and establish a strong foothold.

Our Payroll Outsourcing Process

As a trusted service provider for payroll outsourcing in South Africa, Edge sets up and runs payroll management for your company in a few simple steps:

1. Acquiring Employee Data – We collect important employee data such as job posts, working experience, current salary, etc.
2. Calculating Base Salary – As per the minimum wage requirements set by the government and the internal company policies, we calculate the base salary for each employee working in your company.
3. Applying Salary Deductions – We take the social insurance and tax requirements into consideration and apply them to the gross salary of the employees.
4. Detailed Payslips and Monthly Insights – We send payslips to the workers every month and detailed fund reports, complete with payroll insights, to you (or your management team). We run payroll in an error-free manner. This is how the monthly payroll process is executed.
5. Employment Contract, Tax Forms, and Termination – We also provide additional services such as signing employment contracts with valid terms (at the time of recruitment), filling annual or quarterly tax forms, and terminating employee contracts as needed. We handle these time-consuming tasks responsibly, so you don’t have to.
6. Real-time Support and Doubt Resolutions – Our team is available round the clock to answer any questions you might have or issues that require immediate intervention. Your employees can get in touch with us too, via email or our hotline. These are the core services rendered by our team at Edge.

Compliance with Government Mandates

You need to understand the local rules and regulations set by the Government of South Africa to run business operations smoothly. Our team looks after your regulatory payroll compliance with all existing rules and keeps an eye out for any changes introduced by the tax authorities.

We also keep track of developments in social security laws and update you about significant changes. Our professional staff keeps non compliance at bay. All of this contributes to one ultimate goal – “You always run a legal, compliant business with an immaculate track record”.

Payroll Specifics In South Africa

The Government of South Africa has set up guidelines for companies to adhere to for employee security, payroll cycles, minimum wages, work leave, etc. It is important to have a brief idea about them before initiating business operations in the region.

Payroll Cycle and Minimum Wages

Like other countries, most companies in South Africa follow a monthly payroll cycle (usually on the 25th of every month). However, you can also opt for a bi-weekly payroll frequency if that is more convenient for your operations.

Interestingly, South Africa has a single national minimum wage applicable to all sectors (other than agricultural work) set at 23.38 South African Rand per hour. For farm work, the daily wage requirements are different.

Payroll outsourcing providers need to keep these cycles and mandates in mind to process payroll for companies choosing to outsource payroll to them. Edge ensures that you have direct access to all payroll data of your company and your employees are paid accurately.

Overtime Compensation of Workers

The standard duration of work is 45 hours per week in South Africa. Overtime work has to be compensated at 1.5 times the regular salary per hour for the first two hours and double the regular wage for every additional hour. The total overtime work duration should not exceed 10 hours in a week. Also, the total daily work time should not be more than 15 hours, including overtime.

Work Leave Options

• Annual Leave – After completing one year of uninterrupted service, employees are eligible for 21 days of paid annual leave. This limit increases to 22 days after 6 years and 23 days after 13 years. However, annual leave cannot be carried beyond the subsequent year unless specified by the employer.
• Sick Leave – For a period of extended sick leave owing to a medical condition, a medical certificate by an approved practitioner is required. When it comes to short leave requirements, employees can take one day of paid leave for every 26 days worked up to 30 days a year.
• Parental Leave – Female employees in a company can take up to 4 months of unpaid maternity leave. During this period, they receive maternity benefits from the Unemployment Insurance Fund (UIF).

Upon birth of a child, male employees are eligible for 10 days of paid leave as paternity and family responsibility leave.

Severance Pay Terms and Notice Period

Severance pay comes into the picture when an employee is dismissed by a company without any fault of his own (such as unforeseen company closure). Sometimes, additional compensation might also be awarded in case of unfair dismissal.

The amount for severance pay depends on the length of service and duration of the notice period, ranging from 7 days to 4 months.

Notice periods in South Africa are finalized by the Basic Conditions of Employment Act (BCEA). It depends on the reason for termination of employment and length of service to the company.

A good payroll outsourcing provider like Edge keeps record of all these aspects of every employee’s service.

• Notice Period Requirements for Employers

• Notice Period Requirement for Employees

Termination of Employee Contracts

Termination of employees is tough for every organization, as it involves various formalities and cumbersome clearance procedures. We look into that the process gets completed as conveniently as possible, without affecting your business functions.

Termination of the contract can be initiated either by the company or the employee. The notice periods specified in the contract need to be fulfilled by either party.

Payroll Taxes In South Africa

For Businesses

Businesses in South Africa are required to pay the following applicable taxes:

• Corporate Income Tax – This is charged at a flat rate of 28% for all companies operating in South Africa.
• Value Added Tax (VAT) – This is imposed on the supply of goods and services to and from the territory of RSA. The standard rate is 15%, with a few exceptions for specific industries.
• Pay As You Earn (PAYE) – This tax is debited by companies from their employees’ salaries and paid to the South African Revenue Service (SARS). The rates are dependent on the salary slab of the employees.
• Dividends Tax – It is applied to dividends shown and paid by resident companies. The withholding tax rate is set at a cumulative 20%.

For Individual Employees

The income taxes charged on working employees (both resident and non-resident South Africans) depends on their salaries and is categorized as under: