The moment you hire your first employee in South Africa, you become a collector of taxes for SARS. Every month you deduct and pay over three things: PAYE, UIF and SDL. Here's what each one is, who pays it, and when it's due.
PAYE — Pay-As-You-Earn
PAYE is the income tax you withhold from each employee's salary and pay to SARS on their behalf. It's calculated on the annualised salary using the SARS tax tables, less the employee's rebates and medical credits. (See how PAYE is calculated, and work out any salary with our Salary Tax Calculator.)
- Who pays it: the employee (you just withhold and remit it).
UIF — Unemployment Insurance Fund
UIF funds benefits for workers who lose their jobs or go on maternity leave. It's 2% in total: 1% from the employee and 1% from the employer, capped at a salary of R17,712 a month (so a maximum of R177.12 each side).
- Who pays it: split — half employee, half employer.
SDL — Skills Development Levy
SDL funds skills training. It's 1% of your total payroll, paid entirely by the employer. You only pay SDL if your total annual payroll exceeds R500,000.
- Who pays it: the employer.
ETI — a discount, not a tax
The Employment Tax Incentive (ETI) works the other way: it reduces the PAYE you pay over for qualifying young (18–29) and low-wage employees — up to R1,500 a month per employee in their first year. It's the government encouraging you to hire young people, and it's real money off your SARS bill.
The EMP201
Every month you declare PAYE + UIF + SDL (less ETI) on an EMP201 return and pay by the 7th of the following month. Once a year (and at mid-year) you also reconcile everything on an EMP501 and issue employees their IRP5s.
Getting it right, every month
Payroll taxes are unforgiving — miss the 7th and you're penalised. 360books calculates PAYE, UIF, SDL and ETI on every payslip, produces your EMP201 totals, and generates IRP5s and the EMP501 — built specifically for South African payroll.