Registering as an employer: PAYE, UIF and SDL, and what to do each month

Employing the first person converts a business into an employer, and the obligations attach immediately - not at the end of the tax year, and not once the business “settles down”. The tax is withheld from the first payment.

Registering

Two registrations, in practice in one sitting:

1. SARS - for PAYE, UIF and SDL, through eFiling. The business needs its income tax reference number.
2. Department of Employment and Labour - for UIF, so that employees’ contributions and claims are recorded.

Delaying registration does not delay the liability. PAYE and UIF are due on amounts paid to employees from the first payroll, whether or not the employer has registered.

What each deduction is

Item	Rate	Who pays	Funds
PAYE	Per the tax tables, based on the employee’s earnings	Withheld from the employee	Income tax
UIF	1% each, up to the earnings ceiling	Employee and employer	Unemployment Insurance Fund
SDL	A percentage of payroll above a defined annual payroll threshold	Employer only	Skills development

SDL applies only to employers whose annual payroll exceeds the threshold set in the Skills Development Levies Act. Small employers with a modest payroll are often exempt, which is worth confirming rather than assuming.

The monthly routine

The EMP201 is declared and paid monthly, through eFiling, by the 7th of the month following the month it relates to. Payroll for March is declared and paid by 7 April.

Penalties attach to both failures:

• a late payment attracts a penalty plus interest;
• an outstanding return attracts its own penalty.

Three consecutive months of the same failure changes how the non-compliance is viewed, so the 7th of the month needs to be a standing calendar entry, not a task.

The twice-yearly reconciliation

• 31 October - interim EMP501, covering the first half of the payroll year.
• 31 May - annual EMP501, reconciling the full year against every IRP5 and IT3(a) issued.

The reconciliation is what makes the employees’ tax certificates valid. A payroll that has never been reconciled produces certificates that fail when an employee submits a return - and the employee finds out at the worst possible moment, usually while applying for a bond.

Certificates and payslips

Two documents employers must get right:

• IRP5 and IT3(a) certificates issued after the year end, reflecting income, PAYE, UIF and SDL for each employee.
• Payslips, which the Basic Conditions of Employment Act requires to show the employer’s name, the employee’s name and job title, the period, remuneration and every deduction.

The take-home salary calculator shows how PAYE, UIF and pension combine on a payslip, which is useful for checking a payroll against an employee’s expectation.

Where this sits

An employer with a VAT registration has the full small business tax calendar in play. A new employer that registered a company to employ people should also keep the CIPC annual return date, which is a separate obligation to a different body entirely.

Last reviewed 13 October 2026. Registration requirements and rates are set by the Fourth Schedule, the Unemployment Insurance Act, the Skills Development Levies Act and SARS practice; confirm current rates on the SARS site.