South African Payroll Glossary
Every acronym, statute and SARS term you'll meet running South African payroll — defined in plain English. 55 terms and growing.
An annual bonus, taxed as normal remuneration on source code 3605.
Another name for a 13th cheque or annual bonus — one month's extra pay, taxable in full.
BCEA gives every employee 21 consecutive days (15 working days on a 5-day week) of paid annual leave per year.
The Basic Conditions of Employment Act sets the minimum working hours, leave and pay conditions for South African employees.
The Commission for Conciliation, Mediation and Arbitration — dispute-resolution body for unfair dismissals and workplace disputes.
The Compensation for Occupational Injuries and Diseases Act — annual Return of Earnings insures workers against injury at work.
A fringe benefit taxed at 3.5% of the determined value per month (3.25% if a maintenance plan is included).
The total annual cost of employing a person — gross pay plus every employer contribution.
The monthly employer return to SARS declaring PAYE, UIF, SDL and ETI due for the payroll period.
The bi-annual employer reconciliation submitted to SARS through e@syFile with IRP5/IT3(a) certificates.
The Employment Tax Incentive is a monthly PAYE reduction for employers who hire South Africans aged 18–29 earning under R6,500.
3 paid days per year for the birth, illness or death of an immediate family member.
Any non-cash benefit provided to an employee — taxed under the Seventh Schedule of the Income Tax Act.
Total remuneration before any deductions — salary + allowances + bonuses + taxable benefits.
A person genuinely running their own business — usually excluded from PAYE, UIF and BCEA protection.
The annual tax certificate SARS requires an employer to issue to every employee whose earnings were taxable.
The SARS certificate issued in place of an IRP5 when an employee had no PAYE deducted.
A person who supplies workers to a client for reward — typically requires a SARS PAYE directive to reduce withholding.
The 1995 Act governing dismissals, unfair labour practices and the CCMA.
The 12-month period over which BCEA annual leave accrues — usually from date of employment.
4 consecutive months of maternity leave, with UIF benefits payable during the leave.
A monthly PAYE reduction (Section 6A) of R376 for the main member + R376 first dependant + R254 each additional dependant (2026/27).
The statutory minimum hourly rate for all South African workers — R28.79/hour from 1 March 2025.
Take-home pay after PAYE, UIF and any voluntary deductions have been subtracted from gross pay.
BCEA notice period: 1 week (under 6 months), 2 weeks (6 months–1 year), or 4 weeks (1 year+).
Time worked over 45 hours per week, paid at 1.5x normal rate (2x for Sundays and public holidays).
10 consecutive days of parental leave for a parent who is not the birth-mother.
Pay-As-You-Earn is the monthly income tax an employer withholds from each employee's salary and pays over to SARS.
A SARS-issued instruction overriding the normal PAYE calculation — used for bonuses, retrenchment lump sums and non-executive directors.
The written statement of earnings and deductions the employer must give every employee each payday (BCEA Section 33).
A retirement savings vehicle where contributions are tax-deductible (up to 27.5% of income, capped at R350,000/year).
The Protection of Personal Information Act (2013) governs how South African businesses handle personal data, including payroll data.
A fixed annual amount SARS subtracts from every individual's PAYE — R17,820 for the 2026/27 tax year.
A retirement fund similar to a pension fund, harmonised with pension fund rules since 1 March 2021.
12 gazetted South African public holidays where employees receive normal pay if they don't work, or double pay if they do.
Per-km business travel reimbursement, tax-free at SARS's prescribed rate (R4.84/km in 2026/27).
An individual retirement product providing the same tax deduction (27.5%, capped R350,000) as a pension fund.
Termination for operational (economic, structural, technological) reasons under Section 189 of the LRA.
The annual Compensation Fund declaration of gross earnings used to assess COIDA premiums.
The South African Revenue Service — the tax authority collecting PAYE, UIF and SDL from employers.
SARS's free desktop application employers use to submit EMP501 reconciliations and IRP5 tax certificates.
SARS's free online portal for submitting EMP201, VAT, income tax and other returns.
The 4-digit codes SARS uses on IRP5 certificates to classify each earning, deduction and contribution.
The Skills Development Levy is a 1% employer contribution funding SETAs, payable when annual payroll exceeds R500,000.
Sector Education and Training Authorities — 21 industry-specific bodies funded by SDL contributions.
One week's pay per completed year of service, payable to employees retrenched for operational reasons (BCEA Section 41).
BCEA sick leave is 30 days per 36-month cycle (or the number of days worked in a 6-week period per cycle for new employees).
The annual earnings below which no PAYE is payable — R99,000 for under-65s in 2026/27.
A cash allowance for business travel — 80% is subject to PAYE (20% if 80%+ of travel is business).
From 1 September 2024, one-third of new retirement contributions go to a Savings Pot; two-thirds to a Retirement Pot.
The Department of Labour's online portal for submitting UI-19 declarations and UIF payments.
The monthly declaration of UIF contributions and terminations submitted to the Department of Employment and Labour.
The Unemployment Insurance Fund is a 1% employee + 1% employer contribution capped at R17,712 monthly earnings.
The maximum monthly remuneration on which UIF is calculated — R17,712 (effective 1 June 2021).
Secure delivery of payslips via WhatsApp — POPIA-compliant, with the PDF behind a signed portal link.