Looking to grow your company? Hiring international employees can give you access to cost-effective, skilled talent that will benefit your team.
Hiring from South Africa offers a wealth of hiring opportunities. In fact, the talent pool in South Africa is not only deep but is also quickly specializing in tech skills. As such, the country is an ideal choice if you’re looking to grow your team worldwide.
Of course, you’ll need to understand the costs of hiring in South Africa beyond salaries. This includes benefits, bonuses, payroll, and taxation.
In this article, we’ll break down the cost of hiring talent from South Africa and look at how much you can expect to spend per hire.
South Africa Hiring Costs
To start, as an employer, you’ll need to fulfill a few basic payment obligations. These include:
- Payroll (gross salaries)
- Tax payments and withholding
- Statutory benefits
- Paid leave
- Overtime
- Severance pay
To make your hiring offers more attractive to prospective employees, it’s always helpful to include bonuses and if possible, “fringe benefits”. The latter could include pay-in retirement plans, health insurance, meal subsidies, or other extras that go above and beyond an employee’s basic salary.
Required Costs of Hiring an Employee in South Africa
South African Gross Salary
The South African minimum wage is R25,42 per hour (1.30 USD).
South African Work Bonuses
Work bonuses are not mandatory in South Africa, but employees often expect a 13th cheque, similar to the thirteenth-month salary in other parts of the world. Unlike elsewhere, this bonus is not mandatory but recommended and expected. To remain competitive, it is also a good idea to research whether bonuses are the industry standard in your sector.
South African Government Fees and Taxes
In South Africa, 2% of total remuneration goes to payroll fees. The employer and employee contribute 1% each. These contributions go towards the Unemployment Insurance Fund (UIF) or the South African Revenue Services (SARS) at 1%, with 1% supporting the Skills Development Levy (SDL).
Benefit Payments and Social Security
Although South Africa does not have a comprehensive social security program, social security rates in South Africa varied between 2% and 3% in 2022.
Overtime pay
Overtime is paid at 150% of the standard hourly wage. Employers can also agree to offer paid time off instead of overtime pay for employees (or some combination of the two).
Severance pay
The Basic Conditions of Employment Act (BCEA) in South Africa states that entitled employees must receive severance equal to at least one week's pay for each completed year of work for the employer.
Optional Remote or Office Working Costs
Does your remote South African team need digital hardware or software set up? If you are bringing on team members remotely, you may have added costs like high-speed internet service, upgraded electronics, printers, or higher-volume servers.
While South Africa is a multilingual society, English is the most widely-spoken European language in the country. If you look primarily towards cities like Cape Town and Johannesburg, you should have no trouble finding workers without language barriers. That being said, it is good to consider the cost of translation software if hiring from other countries on the African continent.
Are you looking to hire a large number of South African workers? If there’s a significant team, it could be worth investing in an office or coworking space so your team can access the technologies they need and build connections with their coworkers.
Total Cost of Hiring
Let’s say you wanted to hire an employee in South Africa at a salary of USD 100,000 (1,951,038 ZAR).
- Salary: USD 100,000 Gross pay
- Employer social security contributions: USD 2,500 (48,775.95 ZAR)
- Bonuses and other costs: Optional
- Total: USD 102,500 (1,999,813.95 ZAR)
Note that this is a minimum payment. Generally, you will attract higher-skilled and competent candidates by including bonuses or other paid benefits.
How Borderless Can Help
Although it can seem like all these costs add up quickly, we want to make your hiring process stress-free. Onboarding your new South African team should feel like a breeze. It’s an investment, but it’s a major step for your company that you deserve to feel confident about.
At Borderless, we help you hire employees from South Africa and over 150 different countries if you are looking to grow your team. Book a demo to see how we’ll help you hire top global talent quickly and compliantly.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.