Cost to Hire an Employee Calculator: True Cost in South Africa (2026/27)

Beyond basic salary, an employer's real, unavoidable statutory costs are small: 1% employer UIF (capped at R177.12 a month), a 1% Skills Development Levy once your whole business's payroll passes R500,000 a year, and a Compensation Fund (COIDA) assessment that depends on your industry's risk class. Together these usually add only 1% to 4% to a payroll, more at the low end if you're a single employee hit by the Compensation Fund's flat minimum. The bigger additions are business choices, not law: a pension or provident fund contribution, a medical aid subsidy, a 13th cheque, and if you use an agency, a recruitment fee of 15% to 20% of first-year salary. This calculator adds up all of it against your own numbers.

No, and the difference matters. Most South African salaries are advertised as CTC, an all-in figure that already has UIF, pension and medical aid built into it, so the employee's payslip works backwards from that number. This calculator works the other way round, you enter a basic salary and it adds the employer's on-costs on top, which is the more useful question when you're deciding what a new hire will cost you, not how to split an existing CTC number. If you already quote roles as CTC, treat the on-costs shown here as costs already folded into that figure rather than extra.

ETI is a monthly reduction in the PAYE you pay over to SARS for hiring an employee aged 18 to 29, on a salary under R7,500 a month, in their first 24 months with you. It is worth up to R1,500 a month in the first 12 months and R750 a month in the second 12, tapering to zero as pay approaches R7,500. It doesn't apply to domestic workers, connected persons (close relatives of an owner), or anyone paid below the national minimum wage for their hours. Because it reduces PAYE you'd otherwise remit, not a cheque SARS sends you, it only becomes real cash if you have enough PAYE liability across your payroll to offset against, which is normally the case once you have any employees earning above the tax threshold.

The Compensation Fund's minimum annual assessment, about R1,621 for a commercial employer or R560 for a domestic worker, applies once to your whole business's payroll, not per employee. If this hire is your only employee, that minimum lands on them specifically, so the calculator applies it. If you already have other staff, your business has likely already cleared that minimum through their combined assessment, so adding it again to a new hire would double-count it, the calculator leaves it out in that case.

No. South African law does not require an employer to offer a retirement fund, medical aid subsidy or 13th cheque, they are business choices used to attract and keep staff. What is compulsory is UIF, and once you have any employee, registering for the Compensation Fund (COIDA), which covers workplace injury claims. A Skills Development Levy applies only once your total payroll passes R500,000 a year. Bargaining council agreements in some sectors can add their own compulsory minimums on top of these, check whether one applies to your industry.

The first year usually costs more, because of once-off costs like a recruitment agency fee (commonly 15% to 20% of first-year salary) and equipment or onboarding, laptop, tools, training, that don't recur. From the second year, the ongoing cost is salary plus statutory contributions and whatever benefits you offer, without those once-off additions. This calculator separates the two so you can see your real first-year outlay against the steady-state cost you'll carry every year after.

A simple salary-over-workdays sum assumes an employee is at their desk every single working day of the year, but they aren't. Between roughly 10 public holidays that fall on a weekday, 15 days of statutory annual leave, and a typical few sick days used, a full-time employee is realistically productive for about 230 of the year's 260 weekdays. You are still paying their full cost across all of those working days, so the true cost per day they're actually at work is higher than the naive calculation, this calculator shows both figures so the gap is visible.

No, deliberately. PAYE is the employee's own income tax, deducted from their pay and paid over to SARS on their behalf, it is not an extra cost to the employer on top of salary. Adding it here would overstate what hiring someone actually costs your business. Employer UIF, by contrast, genuinely is an employer cost on top of salary, and is included.

The Compensation Fund classifies employers into 13 industry classes with tariffs from about 0.18% for low-risk office and professional services up to over 3% for the highest-risk activities like rock drilling and blasting. Construction, transport, security services and mining sit toward the higher end, typically 2.6% to 2.7%, reflecting genuine workplace injury risk. This calculator uses a representative rate for common categories, your own registration certificate shows the exact subclass and rate the Compensation Fund has assigned to your business.

No, it is a free independent tool using the current UIF, SDL, COIDA and ETI rates and thresholds to give you a reliable estimate. It doesn't model bargaining council agreements, sectoral minimum wage determinations above the national minimum wage, workmen's compensation claims history, or an employee's own PAYE. It is general information, not tax, legal or payroll advice. For your specific situation, confirm with SARS, the Department of Employment and Labour, or a registered payroll provider.