Payroll in South Africa 2026: what employers must calculate, file and pay
Payroll in South Africa means paying staff correctly and paying the South African Revenue Service (SARS) on time: PAYE (Pay-As-You-Earn tax), UIF (Unemployment Insurance Fund) and SDL (Skills Development Levy), declared every month on an EMP201 return. Several numbers changed in March 2026.
In short
- Submit your monthly employer declaration (EMP201) and pay SARS by the 7th. If the 7th falls on a weekend or public holiday, the deadline is the last business day before it.
- The national minimum wage is R30.23 per ordinary hour from March 2026, up from R28.79. Paying below it can also cost you your whole Employment Tax Incentive claim for that month.
- UIF is 1% from you and 1% from the employee on earnings up to a monthly ceiling (R17,712 at the time of writing). SDL is 1% of total pay, but only if your annual pay bill is above R500,000.
- Reconcile twice a year on the EMP501: interim (March to August) by 31 October, annual by 31 May.
- New in 2026: SARS rejects an annual reconciliation if an employee who must be registered for tax has no valid income tax reference number on their IRP5.
The monthly cycle
Every pay run follows the same steps, and the payment to SARS falls due on the 7th, before the next pay run has started.
| Step | What you do | When |
|---|---|---|
| 1 | Calculate gross pay, overtime, allowances and deductions | Each pay run |
| 2 | Deduct PAYE and the employee's share of UIF | Each pay run |
| 3 | Add the employer's share of UIF and SDL | Each pay run |
| 4 | Pay employees and issue payslips | On pay day |
| 5 | Submit the EMP201 and pay PAYE, UIF and SDL to SARS | By the 7th of the following month |
Register as an employer with SARS for PAYE, UIF and SDL. You also register separately with the Compensation Fund under the Compensation for Occupational Injuries and Diseases Act (COIDA).
The 2026 numbers
| Item | Figure | Notes |
|---|---|---|
| National minimum wage | R30.23 per ordinary hour | Up from R28.79. Farm and domestic workers get the same rate. |
| UIF | 1% employee plus 1% employer | On earnings up to a monthly ceiling, R17,712 at the time of writing, so R177.12 a side at most. Confirm the current ceiling before you load it. |
| SDL | 1% of total pay, paid by the employer | Employers with annual pay under R500,000 are exempt. |
| PAYE, 2026/27 | Tax-free threshold R99,000 (under 65) | First bracket is 18% up to R245,100. The primary rebate is R17,820. |
| SARS interest on late tax | 10.25% a year | From 2 March 2026. |
What changed in 2026
The minimum wage went up 5%. The new rate came from a Government Gazette notice in February 2026. Sector rates for the wholesale and retail sector and for contract cleaning were revised as well. If any employee is paid below the minimum wage, SARS says the employer's entire Employment Tax Incentive (ETI) claim for that month is disqualified, not just the claim for that employee.
SARS now hard-rejects reconciliations with missing tax numbers. From the February 2026 reconciliation period, a valid income tax reference number is mandatory on the IRP5 or IT3(a) certificate for every employee who must be registered for tax. eFiling and e@syFile reject the submission without warning if one is missing. Register missing employees on eFiling or at a SARS branch before you reconcile.
New PAYE tables apply from 1 March 2026. The 2026/27 brackets were adjusted by 3.4% for inflation, the first relief since 2023/24. Payroll software must carry the new tables from the first pay run of the tax year.
In-house, bureau or accountant?
There is no headcount at which outsourcing becomes the right answer. The trigger is complexity and risk. A handful of salaried staff on fixed pay is manageable with good software. Overtime and shift work, allowances, more than one site, leave and terminations, and any history of SARS penalties push the risk up.
An accountant who runs your payroll also has your bookkeeping. That means the payroll journals, the EMP201 payment and the reconciliation all tie back to the same records.
Payroll mistakes that cost money
- Calculating UIF on total pay instead of stopping at the ceiling.
- Paying below the minimum wage, including for part-time and casual hours, which also removes your ETI claim.
- Paying the EMP201 after the 7th. Late payment brings a penalty of 10% of the amount outstanding, plus interest.
- Leaving an employee without a valid income tax reference number until the reconciliation is rejected.
- Not registering with the Compensation Fund.
- Running the first pay runs of a new tax year on last year's tax tables.
What to do now
- Check every rate of pay against R30.23 an hour, including part-timers, and check any sector-specific rate that applies to you.
- Confirm every employee has a valid income tax reference number. Register the gaps on eFiling.
- Make sure your payroll system carries the 2026/27 tax tables and the current UIF ceiling.
- Diarise the dates: the 7th of every month, 31 October for the interim reconciliation and 31 May for the annual one.
- Reconcile your EMP201 payments to your payroll records before each EMP501.
- Ask whether payroll is worth your time. If it takes hours every month, or you have had a SARS penalty, get it off your desk.
Frequently asked questions
What is an EMP201?
It is your monthly employer declaration to SARS. It reports and pays the PAYE, UIF and SDL for the previous month, in one submission.
Do I have to pay SDL?
Only if your total annual pay to employees is R500,000 or more. It is 1% of total pay and is paid by the employer.
What if the 7th is a weekend?
The deadline moves to the last business day before the 7th.
What does paying late cost?
A penalty of 10% of the amount outstanding, plus interest, which is 10.25% a year from 2 March 2026.
What is the EMP501?
It is the reconciliation of everything you declared and paid on your EMP201 returns against the amounts actually due. There is an interim one for March to August, due 31 October, and an annual one, due 31 May.
Sources and further reading
- Budget 2026 Frequently Asked Questions, South African Revenue Service
- National Minimum Wage amendment, effective 1 March 2026 (summary of Government Gazette notice 7083 of 3 February 2026), American Chamber of Commerce in South Africa
- SA payroll compliance calendar 2026/2027, Talentide (secondary source)
- SA payroll calendar 2026: dates and deadlines, TSS Payroll (secondary source)
- Minimum wage in South Africa: the complete 2026 guide (UIF ceiling), Employsome (secondary source)
This article is general information for South African businesses. It is not tax, legal or financial advice, and it reflects the rules and figures at the date shown above. Tax rules change, so confirm the current position before you act. TBL's practitioners are registered tax practitioners.