How to hire your first employee
Hiring your first person is a big step, and getting the basics right protects both of you. Here is what South African law expects of a new employer, in plain language.
Put it in writing
Under the Basic Conditions of Employment Act, an employee must receive written particulars of employment: their job, hours, pay, leave, notice period and when they start. A simple employment contract covers this. Agree a probation period up front if you want one.
Pay at least the minimum wage
South Africa has a national minimum wage, reviewed every year, and some sectors have their own. Check the current rate before you set pay, and keep a payslip record for every payment.
Register with UIF and COIDA
- UIF: register as an employer with the Unemployment Insurance Fund. Contributions are shared between you and the employee, and you pay them over monthly.
- COIDA: register with the Compensation Fund, which covers employees injured or made ill at work. You pay an annual assessment.
PAYE and SARS
Register with SARS as an employer for PAYE, deduct tax from salaries above the tax threshold, and pay it over monthly. Even if no PAYE is due because pay is below the threshold, you still need to keep payroll records. An accountant or a payroll service can do this for you: how to check one.
Keep good records
Keep the contract, payslips, leave taken and any warnings. If there is ever a dispute at the CCMA, written records are what protect a fair employer.
Common questions
What do I need to do when I hire my first employee?
Give written particulars of employment, pay at least the national minimum wage, register with UIF and the Compensation Fund (COIDA), register with SARS for PAYE, and keep payroll and leave records.
Do I need to register my employee for UIF?
Yes. Employers must register with the Unemployment Insurance Fund and pay monthly contributions, which are shared between employer and employee.
What is COIDA?
The Compensation for Occupational Injuries and Diseases Act. Employers register with the Compensation Fund, which covers employees injured or made ill at work.