Employing Your First Worker: BCEA Basics, PAYE, UIF and COIDA

Before your first worker starts, you need three registrations (SARS for PAYE, UIF and SDL, the Department of Employment and Labour for UIF claims, and the Compensation Fund for injuries), a written statement of employment particulars, and a wage of at least R30.23 per hour. The Basic Conditions of Employment Act 75 of 1997 (the BCEA) sets the legal floor for every employment relationship in South Africa, and it covers anyone who works for you more than 24 hours a month.‍‌​‌​​‌​‌‌​‌‌​​​‌‌‌‌‌​​​‌​​‌‌​​​​‍

The wage floor

The National Minimum Wage (NMW) is R30.23 per ordinary hour worked from 1 March 2026, a 5% increase on the previous R28.79. It applies equally to farm workers and domestic workers; the main exception is Expanded Public Works Programme workers at R16.62 per hour. The rate is reviewed every year, so check the current Government Gazette at www.gov.za or the Department of Employment and Labour before you set wages. If a bargaining council agreement covers your area and trade, its rates sit above the NMW and you must pay the higher figure: see Bargaining councils in the building industry and check your council's current schedule.

Hours, overtime and the earnings threshold

• Ordinary hours: maximum 45 a week, 9 a day on a 5-day week or 8 a day on a 6-day week.
• Overtime: only by written agreement, paid at 1.5 times the normal rate, capped at 10 hours a week and 12 hours in any single day.
• Sundays: 2 times the normal rate if the worker does not usually work Sundays; 1.5 times if Sunday is a normal working day.
• Public holidays: at least double the normal daily wage if worked; full normal pay if the holiday falls on a working day and is not worked.
• Night work (18:00 to 06:00): an extra allowance or reduced hours, and transport must be available.

One big carve-out: employees earning above the BCEA earnings threshold of R269,600.90 a year (R22,466.67 a month) from 1 May 2026 are not automatically entitled to overtime, Sunday or night-work premiums. Below the threshold, these are statutory rights you cannot contract out of.

Leave

• Annual leave: 21 consecutive days per 12-month cycle (15 working days on a 5-day week). It cannot be paid out instead of taken, except on termination.
• Sick leave: 30 working days in a rolling 36-month cycle. In the first 6 months the worker earns 1 day per 26 days worked. You may require a medical certificate for more than 2 consecutive days off, or for a pattern of Monday and Friday absences.
• Family responsibility leave: 3 paid days a year (birth of the worker's child, a sick child under 18, or a death in the close family) for workers with more than 4 months' service who work at least 4 days a week. It does not carry over.
• Maternity leave: 4 consecutive months. The BCEA grants the leave; UIF pays the benefit (see UIF claims). Parental leave is 10 consecutive days, also paid through UIF.

Written particulars (section 29 of the BCEA)

Section 29 requires written particulars of employment from day one: the names and addresses of both parties, a job description, place of work, start date, hours and days of work, the wage or rate and how it is calculated, the overtime rate, allowances and payments in kind, payment frequency, deductions, leave entitlements, the notice period, and any bargaining council or sectoral determination that applies. This is particulars, not a formal contract: a signed letter of appointment that covers the list is compliant. Keep a copy for 3 years after the worker leaves.

The registration sequence

1. SARS. File form EMP101e on SARS eFiling within 21 business days of becoming an employer. One form registers you for PAYE, UIF (employer side) and SDL, and SARS issues the reference numbers.
2. Department of Employment and Labour. Complete forms UI-8 (employer) and UI-19 (employee details) at ufiling.labour.gov.za or a Labour Centre, so your worker appears on the UIF system when they need to claim.
3. Compensation Fund. Submit form W.As.2 before the first day on the tools. COIDA cover is entirely employer-funded; never deduct it from wages (see COIDA injury claims).
4. Monthly cycle. File EMP201 and pay PAYE plus UIF by the 7th of the following month, reconcile twice a year on EMP501, and issue IRP5 certificates to employees.

UIF costs 1% from the worker and 1% from you, calculated on a salary ceiling of R17,712 a month, so a maximum of R177.12 each (R354.24 in total). That ceiling was last revised in 2021 and is still current as of June 2026; confirm it with the Department of Employment and Labour before payroll setup. The skills development levy (SDL, 1% of payroll) only applies once your annual payroll passes R500,000 (see Skills levies and employment equity).

Worked example: a tiler on minimum wage

• Wage: R30.23 x 45 hours = R1,360.35 a week, roughly R5,893 a month.
• UIF: R58.93 deducted from wages, plus your own R58.93.
• PAYE: nil, because roughly R70,700 a year is below the 2026/27 tax threshold of R99,000 for under-65s.
• SDL: exempt while payroll is under R500,000 a year.
• COIDA: an annual assessment based on your return of earnings, paid by you alone. Budget roughly 1.1 times gross wages for a low earner once levies and admin are in.

Notice and severance

Notice to terminate is 1 week during the first 6 months of service, 2 weeks from 6 to 12 months, and 4 weeks after a year. Severance pay on retrenchment is at least 1 week's pay per completed year of service. Dismissal also has to be fair in reason and process: see Dismissals and the CCMA before you act.

Common mistakes

• Paying cash with nothing in writing. Section 29 particulars are mandatory, and without paperwork the CCMA will usually prefer the worker's version.
• Skipping COIDA registration. One scaffold fall without cover and you carry the claim personally.
• Treating the earnings threshold as an opt-out. Below R269,600.90 a year, overtime and Sunday premiums are not negotiable.
• Forgetting the bargaining council. Council minimums and fund contributions override the NMW in covered areas.

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