How to do your own payroll in South Africa: a step-by-step guide

<h2>Can You Do Your Own Payroll?</h2><p>Yes — many small businesses manage payroll in-house using free or low-cost <a href="/compare/payroll-software">payroll software</a>. You need to understand PAYE, UIF and SDL deductions.</p><h2>Key Deductions Every Employer Calculates</h2><ul><li><strong>PAYE (Pay As You Earn):</strong> Income tax withheld monthly based on SARS tax tables. Submit via eFiling.</li><li><strong>UIF (Unemployment Insurance Fund):</strong> 1% from employee + 1% from employer = 2% of remuneration. Max ceiling applies.</li><li><strong>SDL (Skills Development Levy):</strong> 1% of monthly payroll if annual wage bill exceeds R500,000.</li></ul><h2>Monthly Process</h2><ol><li>Calculate gross salary for each employee</li><li>Apply PAYE using SARS tax tables (or let payroll software do it)</li><li>Deduct UIF (employee portion) and add employer contribution</li><li>Calculate SDL if applicable</li><li>Pay net salary to employees</li><li>Submit EMP201 to SARS and pay PAYE + UIF + SDL by the 7th of the following month</li></ol><h2>Annual Obligations</h2><p>Submit EMP501 reconciliation and IRP5/IT3(a) certificates by 31 May each year.</p><h2>Free Tools</h2><p>Use our <a href="https://tools.xage.co.za/payroll.php">free payroll calculator</a> to estimate take-home pay and deductions.</p>