Payroll · 4 min read
PAYE, UIF and SDL: a checklist for small South African employers
By The Small Business Accountant. Reviewed by Rudolf Etsebeth. Updated 28 September 2026. General information for South African small businesses, not advice on your return.
Before the first salary
Register as an employer. Get a tax number for each employee who needs one, at the start, not in March when the reconciliation is due. Collect an ID or passport, a bank account, the address, and the tax number. Decide what is salary, what is a travel reimbursement, and what is a tool of trade. Those choices change the PAYE.
Put it in writing. A payroll instruction that contradicts the contract creates both a labour problem and a tax problem. We will run the numbers. We will send you to a labour adviser when the instruction is really a dispute.
Every pay run
Gross pay, taxable benefits, pension or retirement contributions, PAYE, UIF, and any other deduction the employee has agreed to. The payslip should let a person re-perform the net pay. The journals in the books should match the payslips. The EMP201 should match both.
UIF is 1% withheld and 1% added by the employer, capped by the monthly earnings ceiling. SDL is 1% of leviable remuneration once you are over the annual threshold, which has for years been R500 000. Both the ceiling and the threshold should be confirmed for the year you are paying. Do not budget from memory if the year has just turned.
The dates
EMP201 declarations and payments are generally due on or before the 7th of the following month. If the 7th is a weekend or public holiday, use the SARS rule for that date rather than “the Monday we noticed”. EMP501 reconciliations happen twice a year, an interim and an annual. The annual run for a February period is the one that produces IRP5 and IT3(a) certificates employees need to file.
The 2026 hard stop on missing tax numbers
SARS has said that from the 202602 reconciliation (the annual EMP501 that opens on 1 April 2026), eFiling and e@syFile will reject the submission if any employee who must be registered under the Income Tax Act lacks a valid income tax reference number. There is no warning period in that announcement. Register the stragglers through ITREG or BundleReg, or at a branch by appointment, before you sit down to reconcile.
This is the single most common reason a “small, simple” payroll becomes a March crisis. Three employees and one missing number is still a rejected submission.
A monthly checklist you can pin up
If you want this run by the practice, it is the payroll service, and it belongs in the same month as the accounting close so the accounts and the certificates never drift apart.
- Joiners and leavers processed before the run, with tax numbers on file
- Hours, commission and allowances agreed by someone who saw the work
- Payslips issued, net pay paid from the business account
- EMP201 values agreed to the pay run and paid by the 7th
- UIF and SDL calculated with the current ceiling and threshold
- Journals posted into the same month as the work
- Exceptions written down, not remembered
Sources
Still asking
Remuneration paid to a director can be subject to PAYE. Drawings that are not remuneration are a different thing and still need a record, usually on the loan account. Which one you are doing is a decision to document, not a label to swap at year-end.
Yes. We need the year-to-date payslips, the EMP201s already filed, and the employee masterfile. Starting clean in March is easier. Starting in October is normal.