Hiring employee number one is a milestone — and the moment your admin obligations jump. Here's the checklist, in the order you'll actually need it.
1. A written employment contract
Required by the Basic Conditions of Employment Act: names, job description, pay, hours, leave, notice period. Sign it before the start date — retrofitting terms later is where disputes come from.
2. Register as an employer with SARS (PAYE)
If you'll deduct PAYE (broadly, when an employee earns above the tax threshold), register as an employer on SARS eFiling — the rule of thumb is within 21 business days of becoming an employer. This gives you a PAYE reference number and puts you into the monthly EMP201 cycle: declare and pay PAYE, UIF and SDL by the 7th of the following month.
3. Register for UIF
Every employee working 24+ hours a month must be registered for UIF — 1% from the employee, 1% from you (on pay up to the earnings ceiling). You register with SARS (collected via the EMP201) and declare employees to the Department of Labour (uFiling), so the employee can actually claim one day.
4. Check whether SDL applies
The Skills Development Levy (1%) only kicks in once your expected annual payroll exceeds R500,000 — most first-hire businesses are exempt, but tick the box knowingly.
5. Register with COIDA (Workmen's Compensation)
Registration with the Compensation Fund is compulsory when you employ anyone. You'll submit an annual Return of Earnings and pay an assessment — it's what covers your employee for workplace injuries.
6. Run payroll properly from day one
Every month you must:
- Calculate PAYE (with rebates), UIF and, if applicable, SDL
- Give the employee a payslip
- File the EMP201 and pay SARS by the 7th
Twice a year you reconcile it all on the EMP501, and each employee gets an IRP5 certificate for their tax return.
7. Keep the records
Contracts, payslips, leave records and payroll calculations — SARS and the Department of Labour both expect years of history on request.
The shortcut
360books runs SA payroll natively: PAYE, UIF, SDL and ETI calculated per payslip, IRP5s and EMP201/EMP501 prepared for you, and a bank file to pay salaries in one batch — from R199/month, with payroll on every plan. Try the salary tax calculator to see the deductions on any wage.