South Africa

Overview

Every country has something unique to offer in its workforce, and South Africa is no exception. 

It has a great talent pool, offering employers a unique blend of cultural diversity and a highly skilled workforce. 

With a vibrant economy fueled by its 62 million people, the country presents a compelling job market. 

In addition, South Africa's competitive business landscape and advanced infrastructure are why it is attracting global attention.

But before you dive in, remember that South Africa has its own set of employment laws.  

Navigating these can be tricky, but a reliable South Africa Employer of Record can make the process smoother, ensuring you're fully compliant with local regulations.

Skuad's South Africa EOR (Employer of Record) solution helps your business expand into South Africa without needing an entity setup. 

Our unified and automated global HR platform enables you to expedite the onboarding of your remote team and compliantly manage their payroll, benefits, etc. 

We help you streamline the global expansion process with the assistance of our international network. 

South Africa at a glance

• Estimated Population: 62 million (2022)
• Currency: South African Rand (ZAR)
• Capital city: Pretoria
• Official language: There are 11 official languages - Sepedi, Sesotho, Setswana, siSwati, Tshivenda, Xitsonga, Afrikaans, English, isiNdebele, isiXhosa and isiZulu.
• GDP: $748 billion PPP (2021) Wikipedia

What is an EOR in South Africa?

An Employer of Record in South Africa is a company that acts as the official employer for foreign workers, handling all HR, payroll, and legal compliance responsibilities. 

This allows businesses to hire and manage talent in South Africa without establishing a local entity.

The EOR is the legal employer for foreign workers, managing their payroll, taxes, benefits, and compliance with South African labor laws. 

The South Africa Employer of Record handles onboarding, termination, and other HR processes. 

This allows companies to focus on their core business operations while ensuring employees comply with South African regulations.

Cost Cost of Employment in South Africa

To hire employees in South Africa, you must know what you're working with. Budgeting is the first step. You need an estimate of the hiring cost, and a reliable cost estimate is crucial. 

To ensure your estimate is accurate, consult a reputable source like Skuad. 

The employee cost calculator is simple and easy to operate. 

Just feed in your data, and you'll get your estimate quickly! Once you have a definitive cost idea, you can make informed decisions about your expansion with Skuad.

Hiring in South Africa

Hiring in South Africa is particularly challenging given the strict employment laws of the country that are also applicable to any foreign company setting up a subsidiary here.

Hiring in South Africa starts with an employment contract which can be both oral and written. The contract should clearly define compensation, benefits, and termination criteria. 

In addition, the employer needs to give in writing specific details about the start date, place of work, designation, responsibilities, working hours, compensation, and leave. 

All employees should receive their remuneration in South African Rand - the national currency. Most employees receive an employment contract of indefinite duration as the law prohibits using fixed-term contracts for permanent tasks.

Most South Africans depend on personal networks and recommendations to find a job. Nonetheless, with the growth of the internet, more people have gravitated towards job websites in search of a job. Some of the popular job sites include – jobs.co.za, findajobinafrica.com, employsa, bestjobs, and career junction.

Another way of finding employment is through recruitment agencies listed on all Yellow Pages and online directories. 

In addition, trade unions and industry associations often help youth and the unemployed get jobs through referrals. 

Such jobs are not advertised and depend on the strength of one’s personal network to land.

In South Africa, one of the oldest ways of finding employment remains relevant even today: newspaper classifieds. 

Some prominent newspapers, such as Mail, Guardian South Africa, and the Times South Africa, publish area-specific open positions in their classifieds.

Recruiting employees on short notice in South Africa is a daunting task. However, partnering with an employer of record (EOR) can be a pragmatic move for a company seeking to expand business here. 

This would certainly open up possibilities and free up resources that would otherwise have been invested in managing HR-related functions. 

The EOR will take care of the compliance regulations, HR, and the hiring process. 

They can expedite the hiring process through virtual onboarding, and e-signing of documents with candidates. Talk to the Skuad team to know more.

Setting Up an Entity

Setting up an entity in South Africa presents both opportunities and challenges. On the positive side, South Africa offers a well-developed infrastructure, a skilled workforce, and access to a significant regional market. 

Additionally, businesses can benefit from hiring remote teams in South Africa, where the labor pool is not only diverse and highly educated but also cost-effective compared to many Western countries. 

However, potential challenges include navigating the country's bureaucracy, the complexity of labor laws, and potential political instability, which can affect both local and remote operations.

Here’s a list of the pros and cons for you to assess before hiring employees in South Africa:

Pros: 

• Growing Economy: South Africa boasts a diverse and dynamic economy with potential for growth in various sectors. 
• Strategic Location: Its position as a gateway to Africa offers access to a vast market.
• Skilled Workforce: South Africa has a skilled and educated workforce that attracts foreign investment.
• Government Support: The government offers incentives and programs to support businesses.

Cons:

• Bureaucracy: Setting up an entity can be complex and require extensive paperwork.
• Economic Challenges: The economy faces issues like high unemployment and inequality. 
• Infrastructure Constraints: Some infrastructure limitations may impact business operations.
• Regulatory Environment: The regulatory landscape can be complex and requires navigating multiple government departments. 

Employer of Record (EOR)

An EOR helps save valuable resources that can be invested in functions such as tax management, payroll management, hiring, and other related aspects looked after by the HR department. 

Skuad specializes in creating tailor-made contracts that comply with local South African laws. 

Our expertise extends to practices like amending contracts and expediting hiring with novel approaches like e-signing documents.

Given the range of regulations in South Africa relating to personnel hiring and company setting, it is important to have a partner to simplify legal and compliance-related matters for you. 

Skuad has a significant grasp of South Africa’s local laws and regulations. To expand your business to South Africa, connect with Skuad experts now.

What You Must Know Before Employing Someone in South Africa

The Department of Labor formed a ministerial legal task force in 1994 to draft the new labor legislation. It was introduced as Labor Relations Act 66 in 1995 and came into effect on 11 November 1996.

Employment protection applies to all employees working in South Africa and also covers individuals of other nationalities employed in South Africa. 

The legislation is often supported by statutory codes of practice drawn up by the National Economic Development Labor Council (NEDLAC) and non-statutory codes of practice issued by the Commission for Conciliation, Mediation, and Arbitration (CCMA).

These codes of practice are often known to give guidelines in labor courts to ascertain whether an employer has breached statutory employment regulations. Unlike in other countries, collective agreements between trade unions and employers are legally enforceable.

In South Africa, a written contract is not mandatory for establishing an employment relationship. However, the Basic Conditions of Employment Act (BCEA) compels employers to provide employment details before employment to protect vulnerable employees from powerful employers.

The employer must ideally enter into a detailed contract with the employee stating the company's disciplinary codes and avoid providing the details in an ad-hoc or non-contextualized manner. Moreover, a comprehensive employment contract benefits both parties as it is legally binding.

Onboarding & Agreements

What is onboarding?

Employee onboarding is the process of integrating new hires into a company. It goes beyond a simple orientation process and covers the entire experience of a new employee in their initial few days, weeks, or months. 

It makes the new hires comfortable with their new job designation. 

During onboarding, fresh hires are explained about the company culture and work environment. Good onboarding is crucial for the company since it ensures new hires reach their potential quickly and positively impacts employee retention. 

You should hire employees in South Africa with Skuad, an EOR that makes employee onboarding easy!

How to successfully onboard

Here’s how to successfully onboard employees via an Employer of records in South Africa:

• Proper communication: Communication is the key to making the new hires feel welcome to the company. If the employer is enthusiastic and friendly, it sends a message that they’re looking forward to working with the new joiners.
• Training programs: Training sessions are an ice-breaker, where the new joiners get to interact with each other, and also with the management. It can be any form of training, from a mentorship session to a job-specific program.
• Regular check-ins: The integration phase encourages the new joiners to connect and bond with the team. 

Types of employment agreements

Employment contracts are of two types:

Fixed-term contracts: 

• These contracts are for a specific duration and may extend for a specific period or until the completion of a particular task. 
• The contract cannot be terminated without the agreement of both parties. 
• The laws specify that full-time contracts must be renewed, as non-renewal is treated as the dismissal of a contract in legal parlance.

Indefinite-Period Contracts: 

• The duration of the contract is not specified, and it endures until the termination of the contract. 
• Either the employer or the employee is entitled to give notice of termination emanating from a valid reason. 
• It is also possible to terminate a contract where a fundamental breach of contract has taken place. 
• Death on either side can also be the reason for the dissolution of the indefinite-period contract.

Onboarding Checklist

A comprehensive checklist is your secret weapon. It ensures everything is covered, leaving no room for confusion or missed steps. 

Here's what you need to include:

• Start with a friendly email, setting the stage for a positive experience.
• A clear schedule. Outline the first few days, giving your new hire a roadmap for their journey.
• Provide all the necessary paperwork for joining, tax and benefits enrollment.
• Share training materials tailored to their new role.
• Introduce them to their team and key stakeholders, fostering a sense of belonging.

For more information, check out Skuad’s article on recruiting and onboarding remote employees.

Types of Visas in South Africa

Work Permits

SA Work permits or temporary visas are provided by the Department of Home Affairs. 

Applicants are required to apply for South Africa job visas which get processed and finalized at the foreign offices of the Department of Home Affairs. 

You can make travel arrangements only when the visa has been approved.

Taxes

The tax year begins on January 1 and ends on December 31. All employees are required to file income tax returns by the end of January. 

The government, through SARS, can invoice any taxpayer who owes additional tax after they have filed returns.

Employer tax obligations

In South Africa, the tax you pay is included in standard income tax withholdings, Standard Income Tax on Employees (SITE), Unemployment Insurance Fund (UIF), and Skills Development Levy. 

All employers must be registered with four tax destinations within two governmental entities.

Social security contributions

In South Africa, there is no national or central social security system, no centralized healthcare program, and thus, no social security contributions. 

Employee tax deductions

Employees in South Africa have to contribute to income tax. Here are the details:

VAT

Value-added tax, or VAT, is levied on all goods and services in South Africa. The standard taxation rate is 15%.

Any vendor producing taxable supplies worth more than R1 million per year must have a VAT registration. 

Other tax contributions and incentives

In addition to the abovementioned taxes, here’s a list of other tax contributions a company might be entitled to:

• Donations tax: Levied at a standard rate of 20%
• Estates duty: It is usually levied on properties. The standard rate of taxation is 30% on the first R30 million and 25% beyond that.
• Securities transfer tax: Levied on any transfer of securities, like company shares. 0.25% is the standard taxation rate.‍
• Skills development levy: Employers must pay a skills development levy of 1% of the employee's total salary.

Compliance

Legal Landscape (Employment Laws)  

The legal landscape in South Africa is a mix of its cultural heritage, laws, regulations, and principles. 

An employer must be aware of these laws so that they don’t attract compliance issues. A South Africa EOR can easily guide you through these. The key legislations are:

• Labour Relations Act (LRA) of 1995: This Act oversees the employee-employer relationship, focusing on dispute resolution, protecting worker rights, etc.
• Basic Conditions of Employment Act (BCEA): Governs work hours in South Africa, leave entitlements, and other conditions of employment. Employers must ensure compliance to avoid penalties.
• Employment Equity Act (EEA) of 1998: This Act focuses on ensuring workplace equality. It ensures fair employee treatment and seeks to remove disparities.
• Skills Development Act of 1998: This Act governs regulations related to upskilling human resources at the workplace.
• Occupational Health and Safety Act (OHSA) of 1993: This Act governs mandatory regulations to be followed in the workplace to ensure the safety of the employees.
• Unemployment Insurance Act: Provides unemployment benefits to workers who contribute to the Unemployment Insurance Fund (UIF) and face job loss or certain other conditions.

Employee and Contractor classification

South African law clearly distinguishes between an employee and an independent contractor. 

According to the rule of law, an employee is in an employee-employer relationship and offers subordinated services to the employer. 

An independent contractor delivers a set of services within a specific duration. 

There is no subordination in the relationship, and the independent contractor is only answerable to the contracted service deliverables.

The key points of differences between employees and independent contractors are:

• Payment/remuneration: Employees are paid regularly or periodically based on the number of hours worked, whereas independent contractors are paid according to pre-agreed deliverables based on the submission of an invoice.
• Tools of the Trade: Employees use the tools of the trade provided by their employer, whereas independent contractors often use their own tools of the trade.
• Expenses: Employees get reimbursed for expenses such as conveyance incurred during the work. On the other hand, independent contractors are likely to bear their expenses themselves.
• Benefits: Employees have the advantage of paid leaves, allowances, contributions to provident funds, etc. At the same time, contractors are only entitled to the remuneration agreed upon in the contract for the pre-agreed deliverables.

Fines and Penalties

Any non-compliance with employment laws can attract fines and penalties. 

From unfair dismissals and breaching the BCEA protocols to refusing minimum wage payment, everything makes an employer vulnerable to fines and penalties. 

These can range from hefty compensation to even imprisonment. But not to worry. Hiring employees in South Africa via an EOR reduces such risks. 

IP protection

Intellectual Property or IP protection is another vital compliance aspect to take care of.

• In South Africa, IP protection applies to everything original, from creative music or literature to new inventions, distinctive marks, and symbols.
• The Copyrights Act, the Designs Act, the Trade Marks Act, and the Patents Act, are the most important South African Acts that guide intellectual property protection.
• The government is taking this step to encourage creativity and innovation and boost the country’s economic growth.

Payroll

Every employer in South Africa must ensure their employees are registered with SARS. 

Instead of registering under a single tax authority, employers must register and file under the South African Revenue Service (SARS) and the South African Department of Labor. Tax contributions work on the principle of “Pay as You Earn”, wherein employers directly deduct tax from employee’s earnings.

Here are how employers in South Africa can pay their employees:

• Bank transfers: An employer can directly transfer the employee’s wage to their bank account. However, for international transfers, you have to check beforehand to see if the local banks accept them. 
• Digital payments: You can use digital payment methods like PayPal or Skrill to pay the employees working in South Africa.
• Money order services: You can partner with providers like Western Union to transfer salaries to employees working abroad.‍
• EOR: The best way to pay employees in South Africa is via an EOR. The employer of record in South Africa ensures that you don’t have to deal with any legal payroll matters, while they streamline employee payments on your behalf.

Benefits & Compensation

As an employer, knowing the local benefits and compensations can make it easy to attract talent and adhere to employment laws. EOR Services South Africa can help you in this journey.

Government benefits

The South African government offers the following benefits to its citizens:

• Old-age pension: A citizen aged 60 or more is eligible for this grant. 
• Disability grant: Any citizen who is either mentally or physically disabled and unable to work can apply for a disability grant.

Insurance

• The South African government offers unemployment insurance. 
• Employers and employees must contribute 1% of the employee’s salary.
• It is not mandatory for employers to provide public health insurance facilities to employees. 

Bonuses

• Employers are not required by law to pay bonuses. 
• Bonuses may be paid at the employer's discretion, under contract, custom, or as a result of a contract.

Worker Rights

Working hours

• Working hours in South Africa are limited to 45 hours for a five-day week (hour hours per day)

Rest Period

• A 12-hour rest period is mandatory between ending a shift and starting another one.
• A 36-hour rest period is mandatory per week.

Overtime

• Three hours of overtime a day and 10 hours of overtime a week are permitted.
• Overtime is paid 1.5 times the salary of the employee.
• An agreement is necessary between the employee and the employer for overtime.

Minimum wage

• As of 2024, the basic wage in South Africa is ZAR27.58 per hour.

Specific labor laws

• The Basic Conditions of Employment Act (BCEA) of 1997 guides the employment landscape in South Africa. It provides for minimum working hours, leave entitlements, termination procedures, and more.
• The Labour Relations Act (LRA) of 1995 protects employees' rights to form trade unions and associations. It also protects an employee’s freedom of collective bargaining and the right to strike.

Notice period

• A minimum of 1 week is required if an employee has worked for less than 6 months.
• Between 6 months and 1 year, the notice period increases to 2 weeks.
• If the employee has worked for over a year, the minimum notice period is 4 weeks.

Severance pay

• Severance pay in South Africa is equal to a week’s wage, per completed service year.
• If there is any outstanding leave, that must be fully encashed.

Working conditions

• The working conditions in South Africa are guided by strict employment laws.
• These laws specify a 45-hour-per-week working rule, along with 36 hours of rest.
• It also provides leave entitlements, like annual leave, sick leave maternity and paternity leaves etc.
• Employees in South Africa cannot be terminated on any general grounds and must be given severance pay.

Anti-discrimination laws/acts

• The Constitution guarantees the right to equality and gives protection from unfair discrimination.
• The Employment Equity Act has been created to ensure workplace equity.
• Trade unions are allowed in the country to collectively bargain for employee rights. Unions are required to have a constitution that meets the law's requirements.

Health & Safety

• Workplace safety is of utmost importance in South Africa. 
• Every employer has to take every reasonable measure to guarantee the safeguard of employees. 
• Employers must also undertake a risk assessment of the workplace situation and implement safety protocols.

Remote & Hybrid Work

There isn't any specific law governing remote work policies in South Africa. However, there are certain relevant regulations mentioned in The Basic Conditions of Employment Act (BCEA).

Flexible work arrangement

Recently, the South African government has tweaked its visa reforms to attract more skilled labor to the country. The introduction of the ‘Remote Work Visitor Visa’ allows employees to live in the country and work for international employers. 

This flexible work arrangement creates new job opportunities in the country and encourages investment.

Technology requirements

• Employee responsibilities: The employee is responsible for ensuring a reliable network connection and maintaining the devices and tools provided by the employer.
• Employer responsibilities: The employer must provide the required hardware, tools, and equipment. This covers desktops or laptops, anti-virus software, project management tools, and access to collaboration platforms.

Infrastructure requirements

Beyond technology, there are infrastructural elements that support a remote & hybrid work facility. These are:

• Home office setup: Employees should have a dedicated workspace that enhances productivity.
• Training and support: The employer must provide the required training and support on remote working tools.
• ‍Supportive policies: Companies must have a supportive remote working policy that addresses communication protocols, work expectations, and likewise.

Salary

Before hiring in a different country, you must know how to calculate payroll properly, and failing to do so can penalize you. You can use a proficient employee cost calculator like the one offered by Skuad. 

The average salary in South Africa varies depending on the inflation rates and the job post. 

However, as of 2023, the average salary in South Africa is reported to be approximately R31,100 per month, which translates to about USD 1,599 at current exchange rates. 

Understanding average salaries for different posts in different countries takes a lot of time. Fortunately, tools like salary calculators, such as the one offered by Skuad, simplify this process. 

These calculators allow employers to enter the job role and the country of interest, instantly providing an approximate salary range for that position. This helps businesses make informed decisions about compensation and offer market-competitive salaries that align with local standards.

Leave Policy

Employees in South Africa are guaranteed some leaves and compensations as per the Employment Act 75 of 1997. Here is a detailed leave policy:

Paid leaves

• Apart from the public holidays’ employees are also awarded 21 days of leave for a completed year of employment.
• Paid leave cannot be accumulated from one year to the next.

Medical/Sick Leave

• Employees receive one day of sick leave for every 26 days they work during the first four months of their employment.
• During each 36-month cycle, employees are entitled to paid sick leave equal to the number of days they work in six weeks.
• Employees will only be granted sick leave for more than two days if they produce a medical certificate from a registered medical practitioner.

Maternity Leave

• Female employees are eligible for four months of paid maternity leave before the child’s birth.
• Maternity leave is paid leave. These benefits are paid under the Unemployment Insurance Act. 
• A worker contributing to UIF is eligible for a maternity benefit of up to 60% of average earnings in the last six months, depending on the insured person's income level.

Paternity Leave

• All parents, including fathers, adopting parents, and surrogates, are entitled to 10 days of unpaid parental leave when their children are born.

Family Responsibility Leave

• Employees who have worked for four months and longer and those who have worked for at least four days a week for the same employer are entitled to fully paid family responsibility leave.
• This is normally taken by male employees in the event of a child’s birth, in case of a sick child or due to a death in the family.

Paid Public Holiday

South Africa has a significant number of national holidays, all of which are generally available for employees. The national holidays of South Africa are as follows.

• New Year’s Day (January 1)
• Human Rights Day (March 21)
• Good Friday (April 10)
• Family Day (April 13)
• Freedom Day (April 27)
• Worker’s Day (May 1)
• National Women’s Day (August 9)
• Heritage Day (September 24)
• Day of Reconciliation (December 16)
• Christmas Day (December 25)
• Day of Goodwill (December 26)

Public holidays that fall on a Sunday roll over to the following Monday.

Incorporation: How to set up a Subsidiary in South Africa

South Africa has few restrictions on the opening of new companies or branches. Nonetheless, it's a good idea to revisit tax treaties that South Africa has with specific countries. This will ensure the profits you earn are not taxed twice by authorities.

The most common type of business set up in South Africa is Pty Ltd. This has no restrictions on shareholder ownership and it can be entirely foreign-owned.

The prescribed steps to set up a Pty Ltd are as follows:

• Companies need to reserve a name and file a notice with the Companies and Intellectual Property Commission (CIPC).
• The companies need to register with the South African Revenue Service (SARS) for Pay as You Earn (PAYE) and Standard Income Tax on Employees.
• All this can take several months.
• In addition, it is necessary to open a bank account.

All employees must be registered with the Department of Labor which ensures employees are treated fairly by their employers.

Background Checks

You can hire employees in South Africa only after a thorough background check. It is completely legal, so keep in mind these areas:

• A written consent from the employee is a must.
• The employee must be aware of the background check purpose.
• The most common background checks in South Africa are criminal background checks, verification of employment history, academic qualification checks, and credit history checks. 
• Any third-party engagement for a background check, which isn’t legally registered, will lead to a hefty penalty. Thus, it is best to hire via EOR services in South Africa to ensure compliance.

Termination & Offboardings

Notice period

Employment contracts can be terminated by the employer on justifiable grounds. A notice period must be given in writing. The employer can also offer payment instead of notice period service. 

Severance pay

Employees in South Africa are eligible for severance pay, which is a week’s pay per completed service year.

Termination grounds

It is common for employers to engage employees for a probationary period. The law does not specify a definite period and leaves it at the discretion of the employer to define the period of probation. However, the labor code does insist on a “reasonable time period” given the circumstances of the job and the time it takes to determine an employee's suitability.

The code also specifies offering appropriate remedial treatment and providing a reasonable period of improvement before the final termination of probationary employees. If things still fail to work out between the employer and the employee, then as per the law – the employer can dismiss the employee.

As per South African law, an employee can be terminated under the following circumstances:

• Upon expiration of the period of employment
• On completion of the designated task
• By process of giving notice by either party
• In event of a contractual breach by either party
• By mutual agreement
• By death
• By insolvency of the employer
• Inability of either party to engage in performing assigned duties.

An employer can also unilaterally terminate an employee under the following circumstances:

• Misconduct on the part of the employee
• Poor work performance or incapacity
• Operational requirements of the employer

Employee rights

An employee can approach the legal council within 30 days of termination to prove unfair dismissal. If found guilty, the employer is obligated to pay the compensation, provided the employee has spent at least 12 months with the employer.

Unilateral termination often results in unfair dismissals. Under such circumstances, the employee can approach the High Court of South Africa. However, the exercise of these rights is rare.

Skuad can draft well-articulated labor contracts within the legal framework established by South African authorities.

Cultural Considerations

Understanding South African culture is important since it gives insight into local customs and values. 

It also builds trust and loyalty between employers and employees and can lead to better talent management and retention. 

Hierarchical structures

• South African businesses are segregated from others by a defined hierarchy and a top-to-bottom approach. 
• The business culture in South Africa promotes centralized power and decision-making. 
• Crucial information is sent to the decision-makers, based on which decisions are made. 
• Recently, the country has been undergoing a transitional stage, where employees also take part in the decision-making process.

Holidays and festivities

• South Africa has numerous statutory holidays and regional observances. 
• Employers should be aware of these days and ensure employees are given time off to celebrate their local traditions.

Professional Employer Organization (PEO)

A professional employer organization (PEO) and an EOR render almost similar services. The key difference is that a PEO acts as your co-employer to handle the HR administration. The employees hired by a PEO are your legal employees, and you are liable for them.

On the other hand, an EOR becomes the legal employer of your employees and the liability of employees lies with them. You may opt for a PEO or an EOR depending on how much responsibility you are ready to take on. If you do not want to get involved in the daily decisions of human resources operations, then EOR is your safe choice.

Skuad offers both PEO and EOR solutions. Book a demo for comprehensive support and guidance.

Conclusion: What Gives Skuad’s South Africa Solutions an Edge?

When a company decides to set up a remote team anywhere in the world, knowledge of the local laws will likely impact the local hiring process. 

In South Africa, several factors, including payrolls, taxation rules, the South African negotiation process, state laws, etc., can be hurdles in business expansion. 

By partnering with an EOR, handling HR functions becomes much easier and streamlined. Skuad’s in-depth experience can simplify hiring exceptional talent from South Africa. Leave your worries aside and get in touch with Skuad experts.

FAQs

1) What is an employer of record in South Africa?

An Employer of Record (EOR) in South Africa, like Skuad, is an entity that legally hires employees for client companies without a legal entity. An EOR takes on global workforce management, including payroll, taxes, benefits, and South African labor laws compliance.

2) What is the difference between employer of record and payroll?

Payroll involves employee salaries, wages, deductions, and overall compensation management. It also calculates earnings, withholds taxes, and distributes payments. On the other hand, an Employer of Record (EOR) takes on full-fledged legal responsibility for global workforce management, including payroll.

3) What are the benefits of an EOR?

‍Using an Employer of Record offers several advantages, including ensuring compliance with employment laws, enabling quicker market entry without establishing a local entity, and allowing companies to concentrate on their core business activities.

4) What is the difference between Employer of record and PEO?

A PEO works alongside your company to manage HR functions as a co-employer. In contrast, an EOR takes on the full employment in regions where your business doesn’t have a local entity.

5) How does an EOR work?

An EOR becomes a company's legal employer in a different country. They manage taxation and payroll on behalf of the company and ensure that it stays compliant with the local rules and regulations. 

6) How much does an EOR cost?

The cost of an EOR depends on local labor laws and the number of employees. EOR providers generally charge a monthly fee per employee, ranging from $100 to $1000 or even more. Pricing structures vary based on local regulations and your requirements.