Employer of Record Guide in 

South Africa

Annual Leave

• Standard entitlement: 21 consecutive days per annual leave cycle (after 12 months of employment)
• Calculation: One day for every 17 days worked, or one hour for every 17 hours worked
• Cash-out: Annual leave must generally be taken, not paid out, except on termination
• Carry-over: Limited carry-over provisions apply

Sick Leave

• Entitlement: 30 days in a 3-year cycle (1 day for every 26 days worked)
• Medical certificate: Required for absences exceeding 2 consecutive days
• Calculation: Based on days that would normally be worked
• Unpaid sick leave: After exhausting paid entitlement

Maternity Leave

• Duration: 4 consecutive months (approximately 17-18 weeks)
• Timing: Can commence 4 weeks before expected birth
• Payment: Through UIF benefits, not employer-funded
• Job protection: Position must be held open or comparable role offered

Parental Leave

• Paternity leave: 10 consecutive days following birth/adoption
• Adoption leave: 10 weeks for adoptive parents
• Parental leave: Additional unpaid leave may be available
• UIF benefits: Available for qualifying periods

Family Responsibility Leave

• Entitlement: 3 days per annual leave cycle
• Qualifying events: Birth/adoption of child, serious illness/death of family member
• Payment: Fully paid by employer
• Documentation: May require proof of qualifying event

Summary

Termination Categories

Dismissal for Misconduct:

• Requires fair procedure and substantial reason
• Examples: theft, insubordination, dishonesty
• No notice period required if proven

Dismissal for Incapacity:

• Poor performance or ill health/injury
• Requires fair procedure and investigation
• Notice periods apply

Dismissal for Operational Requirements:

• Retrenchment due to business needs
• Extensive consultation process required
• Severance pay mandatory

Notice Period Requirements

Notice periods are determined by the employee's length of service:

Note: Employment contracts may provide for longer notice periods.

Severance Pay

Retrenchment severance:

• Minimum 1 week's remuneration per completed year of service
• Applies to employees with more than 1 year of service
• Additional severance may be negotiated

Other dismissals:

• No statutory severance requirement
• May be provided through contract or negotiation

Probationary Periods

• Duration: Typically 3-6 months (can be extended to 12 months with agreement)
• Notice: Reduced notice periods during probation
• Fair procedure: Still required even during probation

Final Pay Requirements

• Timing: Must be paid no later than the next normal payday
• Components: Outstanding salary, accrued leave, notice pay, severance (if applicable)
• Deductions: Only lawful deductions permitted

Legal Protections

Automatically unfair dismissals include:

• Pregnancy-related dismissals
• Discrimination based on protected characteristics
• Trade union activities
• Refusing to work on Sundays (with exceptions)

National Public Holidays

South Africa observes 12 national public holidays:

Holiday Pay Rules

• Payment: Employees must be paid for public holidays that fall on their normal working days
• Work on holidays: Double time plus a paid day off, or triple time
• Eligibility: Must have worked for at least 4 weeks before the holiday

Religious Observances

Employers must reasonably accommodate religious observances unless it causes undue hardship to the business.

Required Documentation

Employment contracts must include:

• Job description and duties
• Remuneration and benefits
• Working hours and overtime arrangements
• Leave entitlements
• Disciplinary procedures
• Termination provisions

Employee documentation:

• Identity document or passport
• Tax number and tax directive
• Banking details for salary payments
• Qualifications certificates (if relevant)

Work Authorisation

• South African citizens: No work permit required
• Foreign nationals: Must have valid work visa or permit
• Critical skills visa: For scarce skills occupations
• General work visa: Requires job offer from South African employer

Background Checks

• Criminal checks: Permitted for relevant positions
• Credit checks: Only for positions involving financial responsibility
• Qualification verification: Recommended for professional roles
• Consent required: Written consent needed for all background checks

Data Protection

• Protection of Personal Information Act (POPIA): Governs personal data processing
• Consent: Required for collection and processing of personal information
• Data security: Employers must implement appropriate safeguards
• Cross-border transfers: Restricted unless adequate protection exists

Language Requirements

• Official languages: 11 official languages recognised
• Workplace language: English commonly used in business
• Language policy: Employers should have clear language policies
• Translation: Important documents may need translation

Onboarding Timeline

Worker Classification

Employee vs. Independent Contractor:

• Control test: Level of supervision and control
• Integration test: How integral the work is to the business
• Economic reality test: Who bears the financial risk
• Organisational test: Whether the person is part of the organisation

Misclassification can result in penalties and backdated benefits payments.

Collective Bargaining

• Trade unions: Strong presence in many sectors
• Bargaining councils: Industry-level wage and condition setting
• Collective agreements: May override individual contracts
• Right to strike: Protected under the Labour Relations Act

Employment Equity

Designated groups: African, Coloured, and Indian people, women, and people with disabilities Affirmative action: Required for employers with 50+ employees Employment equity plans: Must be submitted annually Skills development: Mandatory investment in employee training

Cultural Considerations

• Ubuntu philosophy: Emphasis on community and mutual support
• Diversity: Highly diverse workforce requiring inclusive practices
• Communication styles: Generally respectful and relationship-focused
• Work-life balance: Increasingly important to employees

Remote Work

• Legal framework: No specific remote work legislation
• Health and safety: Employer obligations extend to home offices
• Equipment: Employer responsibility for work-related equipment
• Tax implications: May affect tax residency and deductions

What Borderless AI Handles:

• Employment contract drafting and compliance
• Payroll processing and tax withholding
• UIF and SDL registrations and payments
• Leave management and statutory compliance
• Termination procedures and documentation
• Local legal representation and support