Payroll might seem straightforward — until SARS, UIF, or the Department of Labour come knocking.
Payroll compliance is more than paying salaries; it’s about meeting all your legal responsibilities as an employer.
Here’s a simple guide from Schoemans Chartered Accountants to help South African businesses stay fully compliant.
Register for All Employer Obligations
Before hiring staff, ensure you’re registered for:
- PAYE (Pay-As-You-Earn) — SARS requires this for all salaried employees.
- UIF (Unemployment Insurance Fund) — with the Department of Labour.
- SDL (Skills Development Levy) — applies if your payroll exceeds R500,000 per year.
These registrations must be reflected on your EMP201 submissions.
Deduct and Submit PAYE Correctly
Employers must calculate PAYE based on SARS tax tables and submit payments by the 7th of each month.
Under-deductions or missed submissions can lead to penalties, interest, and compliance issues.
💡 Pro tip: Always double-check bonuses and commissions — they affect PAYE calculations.
Manage UIF and SDL Contributions
UIF: 2% of gross salary (1% employer + 1% employee).
SDL: 1% of gross salary (employer only).
These must also be paid monthly with the EMP201 form via eFiling.
File Bi-Annual Reconciliations (EMP501)
Every employer must submit an EMP501 reconciliation twice a year:
Interim period: March – August (due in October)
Final period: September – February (due in May)
This ensures all employee taxes match SARS records.
Issue IRP5 Certificates
At the end of each tax year, employers must issue IRP5 certificates so employees can file personal income tax returns.
Accurate payroll records make this process smooth and compliant.
Keep Records for at Least 5 Years
Maintain payroll records, payslips, and proof of submissions for a minimum of five years — SARS can request these during audits.
Stay Updated with Legislative Changes
Employment laws, tax tables, and UIF regulations change frequently.
Your accountant can help you stay up to date and adjust payroll processes accordingly.
Final Thoughts
Payroll compliance isn’t just an admin task — it’s a core part of responsible business management. By outsourcing or partnering with professionals, you ensure your staff are paid correctly, your records are compliant, and your business reputation remains solid.
At Schoemans Chartered Accountants, we assist Cape Town SMEs with payroll setup, submissions, and compliance — so you can focus on growing your business.
👉 Speak to our team for stress-free payroll management today. Schoemans are part of the Schoemans Group that included Schoemans & Coetzee Audit – Registered Auditors in Cape Town and Acredo Quality Auditing, Accounting and Tax Compliance