Hiring your first employee is a milestone — and the moment payroll becomes your responsibility. It can feel intimidating: tax tables, three different acronyms, monthly deadlines and a law that says exactly what a payslip must contain. The good news is that once you understand the cycle, it repeats the same way every month.
This guide walks you through the whole thing from the very start: registering as an employer with SARS and the UIF, gathering the right employee details, working out the difference between gross and net pay, knowing what gets deducted versus what you as the employer pay, issuing a compliant payslip, paying SARS on time, and keeping your records. By the end you will know exactly what happens each month — and where OrigamiPay quietly does the arithmetic for you.
Step 1: Register as an employer before payday
Before you pay anyone, you need to be registered with the right authorities. There are two registrations that matter for almost every small employer.
Register for PAYE with SARS. If you employ staff and pay salaries above the tax threshold, you must register as an employer with SARS so you can withhold and pay over employees' tax. You do this on SARS eFiling, and SARS will give you a PAYE reference number. The same registration process covers SDL if you are liable for it.
Register with the UIF. Employers must register with the Unemployment Insurance Fund within 30 days of employing their first worker. Once registered you declare and pay UIF contributions every month — either to SARS through the monthly EMP201, or directly to the UIF via uFiling.
Don't skip the UIF clock
The 30-day UIF registration window starts when you take on your first employee — not your first payday and not the end of the tax year. Late registration is a common and avoidable compliance slip for new employers.
Step 2: Gather each employee's details
Accurate payroll starts with accurate information. Before the first run, collect and store the following for every employee:
- Full legal name and occupation or job title
- South African ID number (or passport and work permit details)
- Residential and postal address
- Tax reference number, if they have one
- Banking details for their net pay
- Their date of birth — age affects tax rebates and thresholds
- Agreed remuneration: monthly salary or an hourly rate plus hours worked
- Medical aid membership and number of dependants, if you contribute or run it through payroll
Date of birth matters more than people expect. The primary rebate of R17 235 applies to everyone, but employees aged 65 and over get an additional secondary rebate of R9 444, and those 75 and over get a further tertiary rebate of R3 145. Get the birth date wrong and you will over- or under-withhold tax.
Step 3: Understand gross pay, deductions and net pay
Every payslip tells the same story in three acts. Gross pay is what the employee earns before anything is taken off — their salary, plus any overtime, allowances or commission. Deductions are amounts withheld from that gross figure. Net pay is what actually lands in their bank account: gross minus deductions.
The two statutory deductions you take off the employee are PAYE and the employee's 1% UIF. Separately, there are costs you carry as the employer that never come out of the employee's pay: your matching 1% UIF and, if you are liable, SDL. It is worth being crystal clear on which is which — we cover the detail in PAYE, UIF and SDL explained.
How PAYE is worked out
PAYE (Pay As You Earn) is the employee's income tax, withheld by you each month. The method is to annualise the month's pay (multiply by 12), apply the annual tax table, subtract the rebates and any medical scheme tax credits the employee qualifies for, then divide the result by 12 to get the month's tax. Here are the 2025/26 annual brackets:
PAYE brackets for the 2025/26 tax year (1 March 2025 – 28 February 2026).
| Annual taxable income | Tax |
|---|---|
| R0 – R237 100 | 18% of taxable income |
| R237 101 – R370 500 | R42 678 + 26% above R237 100 |
| R370 501 – R512 800 | R77 362 + 31% above R370 500 |
| R512 801 – R673 000 | R121 475 + 36% above R512 800 |
| R673 001 – R857 900 | R179 147 + 39% above R673 000 |
| R857 901 – R1 817 000 | R251 258 + 41% above R857 900 |
| R1 817 001 and above | R644 489 + 45% above R1 817 000 |
Not everyone pays PAYE. If annual income falls below the tax threshold — R95 750 for under-65s, R148 217 for ages 65–74, and R165 689 for 75 and over — no PAYE is due. There are also medical scheme tax credits that reduce monthly PAYE: R364 for the main member, R364 for the first dependant, and R246 for each additional dependant.
How UIF and SDL work
UIF is straightforward: 1% from the employee and 1% from you, so 2% of remuneration in total, capped at a monthly remuneration ceiling of R17 712. That makes the maximum R177.12 from each side per month, no matter how high the salary. SDL is the Skills Development Levy — 1% of your total leviable payroll, paid entirely by you, never deducted from staff. If your total annual payroll is R500 000 or less, you are exempt from SDL altogether.
Who pays what each month.
| Item | Who pays | Rate | Notes |
|---|---|---|---|
| PAYE | Employee (you withhold) | Per tax table | Annualise, apply table, less rebates/credits, ÷12 |
| UIF (employee) | Employee | 1% | Capped at R177.12/month |
| UIF (employer) | Employer | 1% | Capped at R177.12/month |
| SDL | Employer | 1% | Exempt if annual payroll ≤ R500 000 |
Step 4: Issue a compliant payslip
Once the maths is done, the law requires you to give each employee a written payslip. Section 33 of the Basic Conditions of Employment Act (BCEA) sets out the minimum it must show. A payslip is not optional and it is not just good manners — it is a statutory document.
The section 33 payslip checklist.
| A BCEA payslip must show | Included? |
|---|---|
| Employer's name and address | Required |
| Employee's name and occupation | Required |
| The period for which payment is made | Required |
| Remuneration in money (gross pay) | Required |
| The amount and purpose of each deduction | Required |
| The actual amount paid (net pay) | Required |
| Pay rate, overtime rate and hours worked, where relevant | Required |
| Sunday or public-holiday hours, where relevant | Required |
Where overtime or weekend work applies, the rates matter too: overtime is paid at 1.5× the normal rate, Sunday work at 1.5× (or 2× if the employee does not ordinarily work Sundays), and public-holiday work at 2×. Payslips must be given in writing at the workplace or an agreed place, during or just after working hours. For a fuller walkthrough, see how to issue a compliant payslip.
Let the software build the payslip
OrigamiPay calculates the PAYE, UIF and SDL for each employee and produces a BCEA-compliant payslip PDF automatically — every required field in the right place, every month, without you reaching for a calculator.
Step 5: Pay SARS via EMP201 by the 7th
Withholding tax is only half the job — you also have to declare and pay it over. Each month you submit an EMP201, the Monthly Employer Declaration, which reports the total PAYE, UIF and SDL for that month. You submit and pay it through SARS eFiling.
The deadline is the 7th of the following month. If the 7th falls on a weekend or public holiday, it moves to the last business day before the 7th. Miss it and SARS charges penalties and interest, so this is the date to put in your calendar. The full process — including how to reconcile your figures — is covered in our EMP201 submission guide.
Payroll is not a once-a-year scramble. It is a calm monthly rhythm: calculate, pay the team, pay SARS by the 7th, file it away. Get the rhythm right and the year takes care of itself.
Twice a year there is a bit more: employers file an EMP501 reconciliation and issue IRP5/IT3(a) tax certificates to employees, reconciling everything declared on the monthly EMP201s. Because OrigamiPay tracks each month's figures, it can pre-fill your EMP201 so the monthly declaration is a quick check rather than a manual rebuild.
Step 6: Keep your records
The final step in every cycle is record-keeping. Under the BCEA you must keep employment and pay records for at least three years. That means payslips, the underlying calculations, hours worked, leave taken and your EMP201 submissions. Good records protect you if an employee queries their pay, if SARS reviews your account, or if the Department of Employment and Labour inspects your workplace.
Keeping records is far easier when payroll lives in one system rather than scattered across spreadsheets and email. As your business grows and a manual approach starts to creak, it is worth knowing when to switch payroll software — the right time is usually before the admin becomes a headache, not after.
Your monthly payroll cycle, at a glance
- 1Confirm pay — salary or hours, plus any overtime, allowances or commission.
- 2Calculate — gross pay, then PAYE, the employee's 1% UIF, your matching 1% UIF and SDL if liable.
- 3Pay your team their net pay and hand each one a BCEA-compliant payslip.
- 4File and pay the EMP201 to SARS by the 7th of the following month.
- 5Store the records for at least three years.
Do that five-step loop each month and you are running compliant payroll. The figures rarely change within a tax year, so once your first run is right, the rest tend to follow. If you would rather not do the arithmetic by hand, OrigamiPay handles the PAYE, UIF and SDL maths, produces the payslip PDFs and pre-fills your EMP201 — leaving you to focus on running the business. Ready to begin? Start your free trial.
Run your first payroll with confidence
OrigamiPay does the PAYE, UIF and SDL maths, builds BCEA-compliant payslips and pre-fills your EMP201 — so payday is simple and compliant.
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