The most common legal  form for doing business in South Africa is the private company (Proprietary Limited, abbreviated as (Pty) Ltd). The incorporation process typically takes 1 -3 business days via BizPortal in simple cases.

A minimum of one shareholder and one director is required for setting up a company.

The official company register can be accessed at Companies and Intellectual Property Commission (CIPC) www.cipc.co.za.

Companies must file beneficial ownership (BO) information. Newly incorporated entities must file BO within 10 business days of incorporation, and all entities must update BO within 10 business days of any change. From 1 July 2024, CIPC enforced a “hard-stop”: annual returns cannot be filed unless BO information is submitted and up to date. This requirement is particularly relevant for foreign-owned entities.

Entitlement to work

All individuals with valid work permits or permanent residency are entitled to work in South Africa.

Employment contracts

Types of employment contracts include permanent, fixed-term, and temporary contracts.

Minimum wage and earnings threshold

The National Minimum Wage (NMW) is ZAR 28.79 per hour, effective 1 March 2025. Sectoral exceptions may apply as prescribed by the Department of Employment and Labour.

The BCEA Earnings Threshold is the annual pay level set under section 6(3) of South Africa’s Basic Conditions of Employment Act. It determines whether certain working-time protections in the BCEA (e.g., ordinary hours, overtime pay, compressed working weeks, meal intervals, Sunday/public-holiday pay in some cases) apply. Employees earning at or below the threshold get those protections by law; employees earning above it are excluded from those specific sections (their contracts or policies would need to grant equivalent benefits).

• Current amount: ZAR 261,748.45 per year (≈ ZAR 21,812.37/month), effective 1 April 2025.
• “Earnings” definition (for this threshold): regular remuneration before deductions (tax, pension, medical, etc.), excluding employer contributions, subsistence/transport allowances, achievement awards, and overtime payments.
• Knock-on effects: The threshold also gates some protections in the Labour Relations Act for non-standard employment (labour brokers / fixed-term / part-time), which generally apply only to employees below the threshold.

Official notice: Government Gazette No. 52232 (7 Mar 2025) sets the current figure and definitions.

Personal income tax rates in South Africa range from 18% to 45%, depending on income levels.

The tax period is the fiscal year, running from March 1 to February 28/29.

The due date for individual tax returns is usually around the end of November for non-provisional taxpayers and end of January for provisional taxpayers.

An individual is considered a tax resident if they are ordinarily resident in South Africa or meet the physical presence test.

Taxable income includes salaries, wages, bonuses, rental income, and investment income.

Unemployment Insurance Fund (UIF)

UIF contributions are payable at 1% by the employer and 1% by the employee on the employee’s remuneration, subject to the earnings ceiling of ZAR 17,712 per month (ZAR 212,544 per year). Where an employee earns above the ceiling, contributions are calculated on the ceiling amount only.

Skills Development Levy (SDL)

Employers generally pay the Skills Development Levy at 1% of total remuneration. Employers whose total remuneration will not exceed ZAR 500,000 in any 12-month period are exempt and need not register for SDL.

Workers’ Compensation (COIDA)

Under COIDA, employers must submit a Return of Earnings (ROE) and pay an assessment based on total remuneration, capped at a maximum of ZAR 633,168 per employee per annum from 1 March 2025. The cap and minimum assessments are prescribed annually by the Department of Employment and Labour.

Special Economic Zones (SEZ) – Tax Incentive

Qualifying companies operating in approved SEZs may benefit from a reduced corporate income tax rate of 15% and a 10% building allowance on the cost of new and unused buildings (including qualifying improvements), subject to legislative conditions (e.g., location in a designated SEZ and qualifying active-trade activities). Note: Budget 2025 proposed extending the incentive’s sunset date (subject to enactment).