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Tax & compliance (South Africa)

PAYE and UIF

PAYE and UIF are payroll amounts South African employers withhold from salaries and pay to the authorities — income tax and unemployment insurance. Here's how they work.

Quick answer

PAYE (Pay As You Earn) and UIF (Unemployment Insurance Fund) are two payroll amounts South African employers withhold and pay over on behalf of employees. PAYE is the employee's income tax deducted from salary and paid to SARS. UIF is a contribution — shared between employer and employee — to a fund that pays benefits to workers who lose income. Employers report and pay these monthly.

PAYE is how most employees' income tax is collected: rather than paying a lump sum at year end, tax is deducted from each salary by the employer and paid to SARS. This keeps the employee roughly up to date on their tax throughout the year.

UIF is a separate contribution that funds benefits for workers who become unemployed or cannot work for certain reasons, such as illness or maternity. Both the employer and the employee contribute, and the employer pays the combined amount over.

Employers typically calculate, deduct and remit PAYE and UIF monthly, and report them to the authorities. Exact rates and rules are set by SARS and the relevant funds — confirm current requirements with a payroll professional or SARS.

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FAQ

Common questions

Who pays PAYE and UIF?

The employer withholds both from the employee's pay and remits them. PAYE is entirely the employee's income tax. UIF is contributed by both the employer and the employee, with the employer paying the combined amount over.

How often are PAYE and UIF paid?

Employers generally calculate and pay them monthly, and report them to the authorities. Exact deadlines, rates and rules are set by SARS and the UIF — confirm current requirements with a payroll professional.

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