South Africa - Tax Guide for Freelance Contractors
Welcome to our guide to South African Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, South Africa.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in South Africa. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in South Africa.
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South African Income Tax
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South African Social Security
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Umbrella and Contract Management Services in South Africa
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Download our South African Taxation factsheet
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Residents and non-residents
- working in South Africa are required to pay social security contributions on their gross salary in South Africa or in the country of their employer if a social security agreement exists between the two countries and the employer obtains a detachment certificate.
In principle, South African employers withhold South African social security contributions on the remuneration of their employees working in South Africa. Contributions are paid to the Unemployment Insurance Fund (UIF) which covers benefits for unemployment, illness, maternity, adoption and for dependants of deceased persons.
The employer also has to make contributions to the Compensation Fund which provides benefits in case of disablement or death caused by occupational injuries or diseases.
The contributions depend on the annual earnings of their employees and the nature of activities.
Social security rates for 2009/2010:
The employer pays 1% of his employee’s salary up to ZAR 149’736 per year to the Unemployment Insurance Fund and 1% on the employee’s full salary to the Skills Development Levy (SDL) if the employer’s payroll total exceeds ZAR 500’000 per annum.
The employee pays 1% of his salary up to ZAR 131’592 to the Unemployment Insurance Fund.