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How to hire remote employees in
Laws about hiring are complicated. Especially when they’re in countries you’re not used to hiring in. But we’re here to make things simple. Below, you’ll learn the two options you have for hiring in South Africa—and the advantages and disadvantages of each.
If you want to successfully hire in
South Africa
, you have two options:
Laws about hiring contractors are significantly more simple in
South Africa
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
South Africa
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
South Africa
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
South Africa
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
South Africa
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in South Africa than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in South Africa.
The minimum mandatory annual leave in South Africa is 15 workdays and it is accrued monthly at a rate of 1.25 days per month.
There are 13 public holidays in South Africa.
In South Africa, sick leave is based on a 36–month cycle.
For the first 6 months of employment, the employee is entitled to 1 day of sick leave for every 26 days worked. From the first day of the 7th month, the employee receives:
The number of sick days taken is subtracted from these amounts to come up with the total number of sick days the employee is able to take.
At the end of the 36–month cycle, the number of sick days resets.
If the employee is absent for more than 2 consecutive days, they must produce a medical certificate. However, if the employee is sick from Friday to Monday, this is not considered consecutive days of sick leave, and are not obligated to produce a medical certificate.
During a leave due to illness, the employee is entitled to full pay and cannot be terminated so long as they have a medical certificate.
In South Africa, a woman is entitled to 4 months of unpaid maternity leave.
This entitlement can begin from at least 4 weeks before the birth. However, If the woman is not able to work due to her medical condition, it is possible to begin the leave earlier.
The employer is not obligated to pay the employee for maternity leave. Instead, a claim can be made from the Maternity Benefit Fund if contributions have been made to the Unemployment Insurance Fund (UIF). The maximum the employee is able to receive from this benefit is 60% of their regular pay and are paid for 121 days.
Paternity falls under Parental leave.
Fathers are entitled to 10 days of parental leave, paid by the UIF at a rate of 66% of the regular pay. For the father to exercise parental leave, they must inform their employer in writing at least one month before the expected due date of the child. This leave also applies to adoptive fathers
In South Africa, employers are not able to terminate an employee at will, but can be dismissed for the following:
When the employee and employer would like to separate amicably, a separation agreement is common.
Both the employee and employer must follow the same notice period based on the length of the employment relationship:
For farm and domestic employees, the above notice periods must be followed and may not be shortened.
It is possible, however, to shorten the notice of 4 weeks to no less than 2 if stated under a collective bargaining agreement for other types of employees.
If the employee is terminated due to poor performance or misconduct, the employee is not entitled to provide severance pay.
If the employee is terminated due to operational requirements, the company is obligated to pay the employee one week’s severance pay for every year employed.
3 months is the common practice.
Full-time employment is considered 45 hours weekly, and 9 hours daily.
Up to 10 hours overtime per week is permitted. Employees earning below the threshold (R 205,433.30 per year) must be paid 150% of their normal wage for overtime worked on weekdays and 200% for Sundays.
Employees who earn in excess of the threshold (R 205,433.30 per year) are not subject to overtime pay. However, the employer cannot force employees to work overtime without compensation unless the employee agreed to this.
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