Payroll, PAYE and UIF: a plain-language checklist for small employers

Paying someone is more than transferring a salary. Once you have an employee, the law expects you to register, deduct, declare and pay across to the right authorities. Dates and rules can change, so always confirm current details with SARS and the UIF. Here is the big picture in plain language.

One-time set-up

• Register as an employer with SARS so you can deduct and pay PAYE.
• Register with the UIF and declare your employees.
• Register with the Compensation Fund, which covers employees injured at work.
• Collect employee details: ID, tax number, bank details, start date and a signed contract.

Every month

1. Calculate pay: salary, overtime, allowances and approved deductions.
2. Deduct PAYE and UIF. UIF is generally 1% from the employee and 1% from the employer, up to a monthly earnings ceiling.
3. Issue payslips showing earnings and every deduction.
4. Submit your monthly employer declaration to SARS and pay, usually by the 7th of the following month. Check SARS for the exact due date, especially around weekends and public holidays.
5. Declare and pay UIF for the month.

Twice a year

Employers reconcile their payroll records with SARS: an interim reconciliation around the end of October and an annual one around the end of May. Employees receive tax certificates after the annual reconciliation. Check SARS for the current dates.

Keep your records

Employers generally need to keep employment records, including payslips and time and pay records, for at least three years. Store them somewhere safe, and organised.

Common mistakes

• Paying "cash in hand" with no payslip or declaration.
• Deducting UIF but not paying it across.
• Forgetting to register new employees or to remove leavers.
• Missing the monthly deadline, which attracts penalties and interest.

If this feels like a lot, that is normal. Payroll is repetitive work that rewards accuracy and consistency, which is exactly why many small employers hand it to a specialist.

This article is general information for South African small businesses and is not legal, tax or financial advice. Rules, fees and dates change, so confirm current requirements with the relevant authority or speak to us.