How to Create Payslips for South African Employees (UIF & PAYE)

Why South African Payslips Are a Legal Requirement

The Basic Conditions of Employment Act (BCEA) requires every South African employer to provide employees with a written payslip on each payday. The payslip must detail earnings, deductions, and net pay. Non-compliance can lead to penalties from the Department of Employment and Labour and issues with the South African Revenue Service (SARS).

What Must Appear on a South African Payslip

Under the BCEA, a payslip must include:

• Employer name and address
• Employee name and job title
• Period of payment
• Gross remuneration and rate of pay
• Overtime hours and payment
• Each deduction itemised with its purpose
• Net pay
• Employee's UIF reference number

Step 1: Determine Gross Remuneration

Start with the employee's total cost to company (CTC) or gross salary. South African pay structures often include a basic salary plus allowances such as travel, cellphone, or housing. All cash remuneration forms part of the PAYE calculation.

Step 2: Calculate PAYE Income Tax

South Africa uses a progressive tax system administered by SARS. Employers must withhold PAYE from employees' remuneration and pay it to SARS monthly. The 2025/2026 tax brackets for individuals under 65 are:

Taxable Income (ZAR, Annual)	Rate
1 - 237,100	18%
237,101 - 370,500	26%
370,501 - 512,800	31%
512,801 - 673,000	36%
673,001 - 857,900	39%
857,901 - 1,817,000	41%
Above 1,817,000	45%

Tax Rebates and Thresholds

Employees also receive annual tax rebates that reduce the amount of PAYE owed:

Rebate	Annual Amount (ZAR)
Primary (all individuals)	17,235
Secondary (65 and older)	9,444
Tertiary (75 and older)	3,145

The primary rebate means that individuals under 65 with annual income below ZAR 95,750 pay no income tax.

Step 3: Deduct UIF (Unemployment Insurance Fund)

UIF contributions are mandatory for most employees. Both the employee and employer contribute:

Contributor	Rate	Cap
Employee	1%	Of remuneration, up to ZAR 17,712/month
Employer	1%	Of remuneration, up to ZAR 17,712/month

The employee's 1% is deducted from their salary. The employer's 1% is an additional cost. Total UIF remitted to the Unemployment Insurance Commissioner is 2% of the employee's remuneration, subject to the monthly ceiling.

Step 4: Account for SDL (Skills Development Levy)

Employers with an annual payroll exceeding ZAR 500,000 must pay SDL at 1% of total remuneration. This is an employer-only cost and does not reduce the employee's pay, but it is often shown on the payslip for transparency.

Levy	Rate	Paid By
SDL	1%	Employer

Step 5: Deduct Retirement Fund Contributions

Many South African employees belong to a pension fund or provident fund. Contributions are typically shared between employer and employee. Employee contributions to approved retirement funds are tax-deductible up to the lesser of 27.5% of remuneration or ZAR 350,000 per year.

Typical Split	Employee	Employer
Pension/Provident Fund	7.5%	7.5%

The exact split varies by company policy and fund rules.

Step 6: Deduct Medical Aid Contributions

Where an employee belongs to a medical aid scheme, contributions are deducted from gross pay. Employees receive monthly Medical Tax Credits to offset their PAYE liability:

Beneficiaries	Monthly Credit (ZAR)
Main member	364
Main member + 1 dependant	728
Each additional dependant	+246

Step 7: Calculate Net Pay

Subtract PAYE, UIF (employee share), retirement fund (employee share), and medical aid contribution from gross salary to arrive at net pay.

Sample Monthly Deduction Breakdown

Line Item	Amount (ZAR)
Gross Salary	35,000.00
PAYE	-5,437.00
UIF (employee 1%)	-350.00
Pension Fund (employee 7.5%)	-2,625.00
Medical Aid (employee share)	-2,100.00
Net Pay	24,488.00

Step 8: Generate the Payslip with CleverSlip

CleverSlip's South Africa payslip template is built to meet BCEA requirements out of the box. Enter your employee's remuneration details, and CleverSlip structures the payslip with PAYE, UIF, retirement fund, and medical aid deductions clearly itemised. Download the payslip as a PDF and provide it to your employee on payday.

Stay SARS-Compliant

South African tax tables and UIF thresholds are updated each tax year. CleverSlip helps you stay on top of these changes so your payslips remain accurate and compliant with SARS and Department of Labour requirements.