What Is PAYE in South Africa?
Quick Answer
What Is PAYE in South Africa?
PAYE (Pay As You Earn) is the system where employers deduct employees’ income tax from each salary and pay it to SARS monthly. If you pay anyone a salary, you must register as an employer, deduct tax per the SARS tables, and declare it on the EMP201 by the 7th of the following month.
What this means in plain language
PAYE is not your money or the employee’s money – it is SARS’s money passing through your payroll. You calculate it from the official tax tables, deduct it before paying the salary, and hold it in trust until the monthly declaration.
The 2026/27 tables run from 18% to 45% with a primary rebate of R17,820, which means employees under 65 earning under R99,000 a year (about R8,250 a month) pay no PAYE at all. Try the PAYE calculator.
Who this applies to
- Every employer paying salaries or wages
- Directors drawing salaries from their own companies – directors’ PAYE applies too
Step by step
- Register as an employer with SARS when you first pay a salary.
- Each month, calculate PAYE from the tax tables on the gross salary.
- Deduct PAYE and 1% UIF from the employee; add your 1% UIF and SDL if applicable.
- Submit and pay the EMP201 by the 7th of the following month.
- Reconcile twice a year on the EMP501 and issue IRP5s.
Common mistakes to avoid
- Paying salaries “cash” without PAYE – the liability and penalties are the employer’s.
- Using last year’s tax tables – they change every March.
- Forgetting directors’ remuneration is subject to PAYE like any salary.
A South African example
A Nelspruit salon owner pays her stylist R12,000 a month. Using the 2026/27 tables, annual tax on R144,000 is R25,920 minus the R17,820 rebate = R8,100 a year, so she deducts R675 PAYE each month and declares it on the EMP201.
Related questions
- When Must a Business Register for PAYE?
- UIF vs PAYE: What's the Difference?
- What Is an EMP201?
- Hiring Employees in South Africa: The Complete Employer Guide
Always verify this information with official South African government sources. Rules, fees and thresholds change. Check SARS, CIPC, the Department of Employment and Labour or gov.za before you act.
Frequently Asked Questions
Who must register for PAYE?
Any employer who pays (or expects to pay) remuneration to employees – including a company paying its own director a salary. Registration is with SARS and is free.
When is PAYE due each month?
The EMP201 declaration and payment are due by the 7th of the month following the salary month. Pay late and a 10% penalty plus interest applies.
What is the difference between PAYE and income tax?
PAYE is the collection method – income tax deducted at source from salaries monthly. The employee’s final income tax is settled on assessment against the PAYE already paid.
Official sources
About BizAnswers: BizAnswers is a privately owned South African company – not a government department. Our guides are free to read and show you how to do things yourself through official channels. If you would rather have the paperwork handled for you, we assist individuals and businesses with filing their South African tax returns and staying compliant, which is a paid service, not a free government service. Contact us for help.
Last reviewed: September 2026 by the BizAnswers editorial team. How we write and check our guides.
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