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The average employer tax rate in South Africa is 28% — the corporate income tax rate in South Africa.
This rate is applicable to resident companies, which are companies incorporated in South Africa or companies effectively managed and controlled in South Africa (the latter assumed to have a permanent establishment in South Africa).
| Taxable income (KRW) | Tax rate |
|---|---|
| 0 – 200 MM | 28% |
South Africa has progressive rates of individual income tax. The different tax brackets are set out below:
| Taxable Income (ZAR) | Tax rate 2023 |
|---|---|
| 0 – 266.000 | 18% |
| 266.001-353.000 | 26% |
| 353.001 – 488.700 | 31% |
| 488.701 – 641.400 | 36% |
| 641.401-817.600 | 39% |
| 817.601-1,731.600 | 41% |
| 1,731.601+ | 45% |
South Africa does not have a comprehensive social security system therefore there is no significant social security taxes levied. Total employer contributions amount to roughly 2.65% of the employee’s salary.
1% goes into the mandatory contribution to unemployment insurance fund (UIF), another 1% goes into skill development levy (SDL) for training and educational purpose, and another roughly 0.5% goes into a worker’s compensation fund (COIDA). The rate of this contribution depends on how dangerous the work is considered.
| Contribution item | Contribution rate |
|---|---|
| Unemployment Insurance Fund (UIF) | 1% up to a certain threshold |
| Skills Development Levy (SDL) | 1% (large employers only) |
| Compensation for Occupational Injuries and Diseases Act (COIDA): | Varies |
In South Africa, employees and employers contribute to the same things. South Africa does not have a comprehensive social security system therefore there are no significant social security taxes levied. Total contributions amount to roughly 2.65% of the employee’s salary.
1% is deducted from an individual’s salary and goes into the mandatory contribution to unemployment insurance fund (UIF).
Other payroll taxes, such as the Skills Development Levy are paid only be employers, not employees.
| Contribution item | Contribution rate |
|---|---|
| Unemployment Insurance | 1% |
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Your business can easily hire employees in South Africa without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
The tax bureau of South Africa is called the South African Revenue Service (SARS).
South Africa does not have a comprehensive social security system therefore there are no significant social security taxes levied. Nevertheless, employer contributions amount to roughly 2.65% of the employee’s salary.
First, employers are required to register with the South African Revenue Service (SARS) and obtain a tax reference number.
Second, employers must withhold payroll taxes from their employees’ salaries and remit them to SARS on a monthly basis. The payroll taxes include income tax, unemployment insurance fund (UIF) skills development levy (SDL) contributions, and worker’s compensation insurance (COIDA).
Finally, employers must also submit an annual reconciliation statement to SARS that reconciles the payroll taxes withheld and remitted during the year.
South Africa – 2023 CIT tax rates
