South African payroll: PAYE, UIF and SDL for the 2027 tax year

Three monthly employer obligations, all collected by SARS on one return (the EMP201):

• Employees' tax (PAYE): income tax withheld from remuneration under the Fourth Schedule to the Income Tax Act 58 of 1962 ("ITA").
• Unemployment Insurance Fund contributions (UIF): 1% from the employee and 1% from the employer, under the Unemployment Insurance Contributions Act 4 of 2002 ("UIC Act").
• Skills Development Levy (SDL): 1% of the payroll, paid by the employer alone, under the Skills Development Levies Act 9 of 1999 ("SDL Act").

South Africa has no general social security contribution beyond UIF and SDL, so this skill covers both the payroll withholding (PR) and social contribution (SC) domains.

Tax year. The 2027 tax year runs from 1 March 2026 to 28 February 2027. The deduction tables in SARS's Guide for Employers (PAYE-GEN-01-G21) came into effect on 1 March 2026, after the 25 February 2026 Budget. SARS issues that guide under Fourth Schedule para 9(2), and it prescribes the deduction tables under para 9(1). The 2027 bands, rebates and medical credits apply from 1 March 2026 by the Minister's Budget announcement, which has effect for 12 months subject to Parliament enacting it (ITA ss5(2), 6(6), 6A(5)); the ITA consolidation to GG 55220 of 19 August 2026 still shows the 2026 amounts in s6(2) and s6A(2).

Who this applies to

• Employers who pay remuneration to employees. This includes paying directors of private companies and members of close corporations: a person who receives remuneration is an "employee" under Fourth Schedule para 1 (SARS guide G21, "Directors of private companies").
• PAYE: a resident employer, a non-resident employer with a permanent establishment in South Africa, or a representative employer must deduct employees' tax from remuneration and pay it to SARS monthly (Fourth Schedule paras 2(1), 9).
• UIF: applies to all employers and employees (UIC Act s4(1)) except:
  • an employee who works less than 24 hours a month for that employer;
  • officers and employees of national and provincial government under the Public Service Act;
  • the President, Deputy President, Ministers, Deputy Ministers, members of the National Assembly, permanent delegates to the National Council of Provinces, Premiers, members of Executive Councils and members of provincial legislatures;
  • municipal councillors, traditional leaders, and members of provincial Houses of Traditional Leaders and of the Council of Traditional Leaders.
• SDL: payable by every employer (SDL Act s3(1)) except those exempt under s4:
  • an employer with reasonable grounds to believe its total remuneration over the next 12 months will not exceed R500 000;
  • national and provincial public service employers;
  • certain public benefit organisations exempt under ITA s10(1)(cN);
  • national and provincial public entities at least 80% funded by Parliament;
  • municipalities holding an exemption certificate.
• Registration: an employer registered with SARS for employees' tax must also register with SARS for UIF. An employer that need not register for employees' tax, has not registered voluntarily and is not liable for SDL registers for UIF with the Unemployment Insurance Commissioner (SARS UIF page; G21 "Registration").

Not covered here, refer to a specialist: the Employment Tax Incentive; retirement and severance lump sums and tax directives; share incentive schemes; the full fringe-benefit valuation rules beyond the headline rates below; non-standard employment; foreign employers without a South African presence.

Rates, bands and thresholds

PAYE annual tax table, 2027 tax year (SARS rates page; SARS guide G21 quick reference card):

Annual taxable income (R)	Tax (R)	Source
0 – 245 100	18% of taxable income	SARS, Rates of Tax for Individuals
245 101 – 383 100	44 118 + 26% of the amount above 245 100	same
383 101 – 530 200	79 998 + 31% of the amount above 383 100	same
530 201 – 695 800	125 599 + 36% of the amount above 530 200	same
695 801 – 887 000	185 215 + 39% of the amount above 695 800	same
887 001 – 1 878 600	259 783 + 41% of the amount above 887 000	same
1 878 601 and above	666 339 + 45% of the amount above 1 878 600	same

Item	Amount	Tax year	Source
Primary rebate	R17 820	2027 (2026: R17 235)	SARS rates page; G21
Secondary rebate (65 and older)	R9 765	2027 (2026: R9 444)	SARS rates page; G21
Tertiary rebate (75 and older)	R3 249	2027 (2026: R3 145)	SARS rates page; G21
Tax threshold, under 65	R99 000	2027 (2026: R95 750)	SARS rates page
Tax threshold, 65 and older	R153 250	2027	SARS rates page
Tax threshold, 75 and older	R171 300	2027	SARS rates page
Medical scheme fees tax credit, taxpayer	R376 a month	2027	G21 (ITA s6A; Fourth Schedule para 9(6))
Medical scheme fees tax credit, first dependant	R376 a month	2027	G21
Medical scheme fees tax credit, each additional dependant	R254 a month	2027	G21
Retirement fund deduction limit	the lesser of R350 000 and 27.5% of the higher of remuneration and taxable income, and taxable income before the deduction and any taxable capital gain (with the exclusions in s11F(2)). SARS's guide G21 and Budget 2026 FAQ give R430 000 for 2027; that increase is not in the Act text read (see "Not yet confirmed")	2027	ITA s11F(2) (consolidation to GG 55220)
UIF, employee	1% of remuneration	current	UIC Act s6(1)(a)(i)
UIF, employer	1% of remuneration for each employee	current	UIC Act s6(1)(a)(ii)
UIF remuneration ceiling	R17 712 a month (R212 544 a year), from 1 June 2021	current	UIC Act s6(2) (set by GN 475, GG 44641 of 28 May 2021, per the consolidation's note); amount from SARS UIF page and G21
UIF maximum employee deduction	R177.12 a month	current	SARS UIF page
SDL	1% of the leviable amount (monthly remuneration as determined for PAYE)	current	SDL Act s3(1)(a)(ii), (3)
SDL exemption	expected remuneration over the next 12 months not above R500 000	current	SDL Act s4(b)
Company car fringe benefit	3.5% a month of determined value (3.25% if a maintenance plan was included in the price)	2027	G21
Travel allowance subject to PAYE	80% of the allowance (20% if the employer is satisfied business use is at least 80%)	2027	G21
Interest on late tax	10.25% a year from 2 March 2026	from 2 Mar 2026	SARS Budget 2026 FAQs

The taxable base

PAYE: the annual-equivalent method. SARS's deduction tables give the result. To check them, or to compute PAYE without them, take these steps for a monthly-paid employee:

1. Start from the month's remuneration as defined in Fourth Schedule para 1, including taxable fringe benefits and the taxable part of allowances.
2. Deduct the employee's retirement fund contributions that the employer deducts. Employer contributions count as a fringe benefit and as deemed employee contributions. The deduction is capped at the s11F limit, pro rated for the period (Fourth Schedule para 2(4); G21).
3. Annualise: multiply by 12 for monthly pay. If the employee works only part of the year, use total remuneration x total pay periods in the year / pay periods worked (Fourth Schedule paras 9(1)–(2); G21 "Annual equivalent calculation").
4. Apply the annual table, then subtract the rebates for the employee's age: primary; plus secondary from 65; plus tertiary from 75. Do not go below zero.
5. Divide by 12 to get the month's tax.
6. Subtract the monthly medical scheme fees tax credit where the employer pays the medical scheme fees, or, at the employer's option, where the employee gives proof of paying them (Fourth Schedule para 9(6)). Do not go below zero.

The result can differ from the printed tables by a few cents of rounding.

UIF base. Monthly remuneration as defined for UIF: Fourth Schedule para 1 remuneration, excluding pensions and retiring allowances, amounts under paras (a), (cA), (d), (e), (eA) and (eD) of "gross income", and commission (UIC Act s1 "remuneration"). Employee pension contributions are not deducted first. The base is capped at R17 712. Remuneration above the ceiling is ignored, so the maximum contribution is R177.12 from the employee plus R177.12 from the employer (UIC Act s6(2); SARS UIF page). The employer deducts the employee's share each month, or at each pay interval if it pays other than monthly (s7(1)–(2)). It may not recover arrear employee contributions after the end of the financial year (s7(3)(c)), and it is liable for any share it failed to deduct (s7(4)).

SDL base. The leviable amount is the total remuneration paid, payable or deemed paid in the month, as determined under the Fourth Schedule for PAYE. It counts whether or not PAYE is actually deducted (SDL Act s3(3)). SARS's guide G21 ("SDL liable amount") reads this as the balance of remuneration after the deductible pension, provident and retirement annuity contributions and donations. There is no ceiling. Excluded (s3(4)):

• pay to persons holding a para 2(5)(a) exemption certificate;
• pensions, superannuation and retiring allowances;
• amounts under paras (a), (d), (e), (eA) and (eD) of the "gross income" definition, such as annuities and lump sums.

Directors of private companies. Under ITA s7B, a director's variable remuneration accrues when it is paid (since 1 March 2017). The company may recover from the director any PAYE it paid on deemed remuneration (G21).

Deadlines and filing

Obligation	When	Source
Pay PAYE, UIF and SDL with the EMP201	within 7 days after the end of the month in which the amount was deducted or became due. If the 7th is a Saturday, Sunday or public holiday, pay by the last business day before it	Fourth Schedule para 2(1); SDL Act s6(1); UIC Act s8(1); G21 "Payments" (weekend rule)
EMP201 declaration	with each payment, through eFiling or e@syFile	G21; SDL Act s6(2); UIC Act s8(2)
Electronic filing and payment	compulsory for employers who pay or are likely to pay more than R10 million of PAYE in any 12 months	SARS PAYE page
Employees' tax certificate when an employee leaves (death, resignation, retirement) while the employer keeps other employees	within 14 days after the employment ends; on death, even before the EMP501 is filed	Fourth Schedule para 13(2)(b); SARS PAYE page
Annual and interim reconciliation (EMP501) and IRP5 certificates	see za-emp501-reconciliation-and-irp5-corrections-syfile	not covered here
SDL and UIF return when the employer stops being an employer	within 14 days	SDL Act s6(2A)(b); UIC Act s8(2A)(b)
Record keeping	five years from submission of the return (longer during an audit, objection or appeal)	TAA ss29(3)(a), 32; G21

Penalties and interest

• Late or short payment: a penalty equal to 10% of the PAYE, SDL or UIF not paid in time, plus interest at the prescribed rate (Fourth Schedule para 6(1); UIC Act s13(1); TAA s213; ITA s89bis(2) for PAYE interest; G21 "Interest and penalty", which also cites SDL Act ss11–12). The prescribed rate is 10.25% a year from 2 March 2026 (SARS Budget 2026 FAQs).
• Intent to evade: a penalty of up to twice the unpaid PAYE, SDL or UIF (G21).
• Personal liability:
  • the employer is personally liable for PAYE and UIF it failed to deduct (G21; UIC Act s7(4));
  • where a non-listed company deducted UIF but did not pay it over, the representative employer and every director or shareholder who controls or regularly manages its finances is personally liable (UIC Act s7(4A)).
• Payment allocation: SARS applies a payment first to penalties, then interest, then tax (G21).
• Estimated assessments: if no EMP201 is filed, or it is wrong, SARS may estimate the PAYE, SDL or UIF due (TAA Chapter 8; UIC Act s9A).
• Offences: failing to deduct, withhold or pay UIF, or to file or register, is an offence under TAA Chapter 17. It carries a fine or up to two years' imprisonment (SARS UIF page).

Cross-border points

• PAYE is due on remuneration paid by a resident employer, or by a non-resident employer with a permanent establishment in South Africa, to any employee, including a non-resident (Fourth Schedule para 2(1)). Treaty relief was not read for this version.
• A resident working abroad may qualify for the s10(1)(o)(ii) foreign employment exemption; see za-foreign-employment-exemption.
• The UIC Act applies to all employers and employees other than those listed in s4(1); the exclusions are based on working hours and public office, not nationality.

Worked examples

Example 1: employee earning R30 000 a month, medical scheme with one dependant

Thandi is 34 and earns R30 000 a month in the 2027 tax year. She has no retirement fund deduction through the payroll. She belongs to a medical scheme with one dependant, paid through the payroll. Her employer's total payroll is well above R500 000 a year.

• Annualised remuneration: R30 000 x 12 = R360 000.
• Annual tax before rebates: R44 118 + (R360 000 - R245 100) x 26% = R44 118 + R29 874 = R73 992.
• Less the primary rebate of R17 820: R56 172 a year, or R4 681 a month.
• Less the medical credit of R376 + R376 = R752 a month: PAYE R3 929.
• UIF: her pay is above the ceiling, so 1% x R17 712 = R177.12 from Thandi and R177.12 from the employer.
• SDL: 1% x R30 000 = R300, paid by the employer.
• EMP201 for the month: R3 929 + R354.24 + R300 = R4 583.24, due by the 7th of the next month.

name: Monthly R30 000, under 65, medical scheme + 1 dependant (2027)
inputs:
  monthly: 30000
  uif_ceiling: 17712
steps:
  - annual: monthly * 12
  - tax_before_rebate: 44118 + (annual - 245100) * 0.26
  - tax_after_rebate: max(0, tax_before_rebate - 17820)
  - monthly_tax: tax_after_rebate / 12
  - medical_credit: 376 + 376
  - paye: max(0, monthly_tax - medical_credit)
  - uif_employee: min(monthly, uif_ceiling) * 0.01
  - uif_employer: min(monthly, uif_ceiling) * 0.01
  - sdl: monthly * 0.01
  - emp201_total: paye + uif_employee + uif_employer + sdl
expected:
  annual: 360000.00
  tax_before_rebate: 73992.00
  tax_after_rebate: 56172.00
  monthly_tax: 4681.00
  medical_credit: 752.00
  paye: 3929.00
  uif_employee: 177.12
  uif_employer: 177.12
  sdl: 300.00
  emp201_total: 4583.24

Example 2: employee aged 66 at a small employer, with a retirement fund

Pieter is 66 and earns R15 000 a month. He contributes R1 500 a month to his employer's pension fund through the payroll. His employer, a small business, expects to pay total remuneration of R420 000 over the next 12 months. Pieter has no medical scheme.

• Retirement fund deduction: R1 500 x 12 = R18 000. That is within the s11F cap: 27.5% x R180 000 = R49 500, below R350 000 (and below R430 000, so the unconfirmed increase does not matter here). So the full R1 500 is deductible each month.
• Annualised balance of remuneration: (R15 000 - R1 500) x 12 = R162 000. That is above the 65-and-older threshold of R153 250, so some tax is due.
• Annual tax before rebates: 18% x R162 000 = R29 160.
• Less rebates (primary R17 820 + secondary R9 765 = R27 585): R1 575 a year, so PAYE R131.25 a month.
• UIF: R15 000 is below the ceiling, so 1% x R15 000 = R150 from Pieter and R150 from the employer. Age does not remove UIF.
• SDL: nil. The employer expects total remuneration of no more than R500 000 over the next 12 months, so it is exempt under SDL Act s4(b) and need not register.
• The edge: if the employer's expected payroll rose above R500 000, SDL would start for Pieter. On SARS's reading of the leviable amount (G21), it is 1% of the balance of remuneration after his pension contribution: 1% x (R15 000 - R1 500) = R135 a month.

name: Age 66, R15 000 a month, R1 500 pension, employer exempt from SDL (2027)
inputs:
  monthly: 15000
  pension: 1500
  uif_ceiling: 17712
  sdl_liable: 0
steps:
  - rf_cap_annual: min(350000, monthly * 12 * 0.275)
  - rf_deduction_annual: min(pension * 12, rf_cap_annual)
  - annual_taxable: monthly * 12 - rf_deduction_annual
  - tax_before_rebate: annual_taxable * 0.18
  - rebates: 17820 + 9765
  - tax_after_rebate: max(0, tax_before_rebate - rebates)
  - paye: tax_after_rebate / 12
  - uif_employee: min(monthly, uif_ceiling) * 0.01
  - uif_employer: min(monthly, uif_ceiling) * 0.01
  - sdl: monthly * 0.01 * sdl_liable
  - sdl_if_liable: (monthly - pension) * 0.01
expected:
  rf_cap_annual: 49500.00
  rf_deduction_annual: 18000.00
  annual_taxable: 162000.00
  tax_before_rebate: 29160.00
  rebates: 27585.00
  tax_after_rebate: 1575.00
  paye: 131.25
  uif_employee: 150.00
  uif_employer: 150.00
  sdl: 0.00
  sdl_if_liable: 135.00

Ask the client first

1. Each employee's age at the end of the tax year (it sets the rebates and thresholds), pay frequency, and start and end dates if they did not work the full year.
2. Gross monthly remuneration, with each fringe benefit and allowance (company car, travel allowance, bursaries, low-interest loans).
3. Retirement fund contributions through the payroll, by both employee and employer, and medical scheme membership with the number of dependants.
4. Hours worked per month by each employee (the 24-hour UIF test), and whether any employee holds a public office excluded from UIF.
5. The employer's expected total payroll over the next 12 months (the R500 000 SDL test), and whether it is a public body or an exempt PBO.
6. Whether any payee is a director of a private company, a non-resident, or working abroad.

Sources

Source	URL	Read on
SARS, Rates of Tax for Individuals (read for 2027 bands, rebates, thresholds)	https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-for-individuals/	2026-10-29
SARS, PAYE-GEN-01-G21 Guide for Employers iro Employees' Tax for 2027, Revision 1 (read for prescribed tables under Fourth Schedule para 9; medical credits, fringe benefits, annual equivalent, payments, penalties, UIF ceiling history, SDL exclusions, directors)	https://www.sars.gov.za/wp-content/uploads/Ops/Guides/PAYE-GEN-01-G21-Guide-for-Employers-iro-Employees-Tax-for-2027-External-Guide.pdf	2026-10-29
SARS, Unemployment Insurance Fund (read for rates, ceiling, exclusions, payment, offences)	https://www.sars.gov.za/types-of-tax/unemployment-insurance-fund/	2026-10-29
SARS, Skills Development Levy (read for rate, R500 000 exemption, exempt employers, payment)	https://www.sars.gov.za/types-of-tax/skills-development-levy/	2026-10-29
SARS, Pay As You Earn (read for EMP201, R10 million electronic rule, deceased employees)	https://www.sars.gov.za/types-of-tax/pay-as-you-earn/	2026-10-29
Income Tax Act 58 of 1962, SARS-provided consolidation to GG 55220 of 19 August 2026 (ss5(2), 6, 6A, 7B, 11F, 89bis; Fourth Schedule paras 1, 2, 6, 9, 13)	https://sars.mylexisnexis.co.za/ (linked from https://www.sars.gov.za/legal-counsel/primary-legislation/)	2026-10-29
Tax Administration Act 28 of 2011, SARS-provided consolidation to GG 54447 of 1 April 2026 (ss29, 32, 213)	https://sars.mylexisnexis.co.za/ (linked from https://www.sars.gov.za/legal-counsel/primary-legislation/)	2026-10-29
Unemployment Insurance Contributions Act 4 of 2002, SARS-provided consolidation to GG 51828 of 24 December 2024 (ss1 "remuneration", 4, 6, 7, 8, 13)	https://sars.mylexisnexis.co.za/ (linked from https://www.sars.gov.za/legal-counsel/primary-legislation/)	2026-10-29
Skills Development Levies Act 9 of 1999, SARS-provided consolidation to GG 51828 of 24 December 2024 (ss3, 4, 6)	https://sars.mylexisnexis.co.za/ (linked from https://www.sars.gov.za/legal-counsel/primary-legislation/)	2026-10-29
SARS, Budget 2026 Frequently Asked Questions (read for SDL and UIF rates, interest from 2 March 2026, retirement cap R430 000)	https://www.sars.gov.za/about/sars-tax-and-customs-system/budget/budget-2026-frequently-asked-questions/	2026-10-29

Not yet confirmed:

• The text of GN 475 (GG 44641 of 28 May 2021) setting the UIF ceiling under UIC Act s6(2). The consolidation names the notice, but its subordinate legislation is behind a login. The R17 712 figure is SARS's own (UIF page and guide G21).
• The R430 000 retirement fund deduction cap for 2027 (SARS guide G21; Budget 2026 FAQ). ITA s11F(2)(a) in the consolidation to GG 55220 of 19 August 2026 still says R350 000, and s11F has no Budget-announcement clause, so the skill uses R350 000 until the amendment is in the Act.
• Whether the SDL leviable amount is reduced by employee retirement contributions. SDL Act s3(3) refers to remuneration as determined under the Fourth Schedule; the reduction is SARS's reading in guide G21.
• How an employer applies the s10(1)(o)(ii) foreign employment exemption in the payroll.
• The 2026 Rates and Monetary Amounts Act Gazette text. The tables come from SARS's prescribed guide G21 and the rates page.
• The 2027 EMP501 submission windows. SARS's Budget 2026 FAQ gives only "expected" dates.
• The Employment Tax Incentive amounts.
• How the fringe-benefit "determined value" is calculated.
• The treaty rules for short-term non-resident employees.