The Day You Hire Someone, You Become an Employer in the Eyes of SARS
The moment your Pty Ltd signs its first employment contract, three separate registrations at SARS and the Department of Labour become legally binding — PAYE, UIF and SDL. Most first-time employers only discover this when SARS issues an IT88 penalty months later.
This guide walks you through each registration, the 2026 rates, the monthly submission calendar, and how to avoid the three most common employer mistakes.
1. PAYE (Pay-As-You-Earn) — Employee Income Tax
PAYE is the tax you withhold from your employees' salaries and pay over to SARS on their behalf every month.
Who must register for PAYE?
Any employer whose employees earn above the tax threshold (R95,750 per year for under-65s in 2026) must register within 21 business days of paying the first salary.
2026 PAYE tax brackets
| Taxable income | Rate |
|---|
|---|---|
| R0 – R237,100 | 18% |
|---|---|
| R237,101 – R370,500 | 26% |
| R370,501 – R512,800 | 31% |
| R512,801 – R673,000 | 36% |
| R673,001 – R857,900 | 39% |
| R857,901 – R1,817,000 | 41% |
| Above R1,817,000 | 45% |
PAYE monthly deadlines
- •EMP201 return + payment: 7th of every month
- •EMP501 reconciliation: twice a year (May & October)
- •IRP5 certificates to employees: by end of May
2. UIF (Unemployment Insurance Fund)
UIF gives employees income protection when they lose their job, get sick, go on maternity leave, or pass away.
Rate: 2% of gross salary
- •1% deducted from the employee
- •1% contributed by the employer
- •Capped at a monthly earnings ceiling of R17,712 (2026)
Where to register
UIF has two separate registrations:
- SARS (paid together with PAYE via EMP201)
- Department of Labour uFiling ([www.ufiling.co.za](https://www.ufiling.co.za))
Skipping the Department of Labour registration is the #1 mistake we see — SARS collects the money, but Labour holds the employee benefits records. Employees cannot claim UIF without it.
3. SDL (Skills Development Levy)
SDL funds SETAs (Sector Education and Training Authorities) to subsidise employee training.
Who must register?
Any employer with a total annual payroll above R500,000 (roughly R41,700 per month).
Rate: 1% of total payroll
Paid monthly on the same EMP201.
The hidden refund most employers miss
By registering with the relevant SETA and submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR) by 30 April each year, you can claim back up to 20% of SDL paid as a mandatory grant.
How to Register: Step-by-Step
- Log into SARS eFiling with your company income tax number
- Navigate to Organisation → Register New → PAYE / UIF / SDL
- Complete the EMP101e application form
- Submit — SARS issues your PAYE/UIF/SDL numbers within 21 business days
- Register the same company on the Department of Labour uFiling portal for UIF
- Set up payroll software (SimplePay, PaySpace, Sage Pastel) to auto-generate EMP201s
Penalties for Non-Compliance
| Offence | Penalty |
|---|
|---|---|
| Late EMP201 submission | 10% of amount due |
|---|---|
| Late payment | 10% + interest at repo rate + 3.5% |
| Failure to register | Up to R2,000 admin penalty per month |
| Understatement of tax | 25% – 200% of tax shortfall |
SARS can also issue an IT88 garnishee against the company bank account to recover unpaid PAYE.
Frequently Asked Questions
Do I need to register for PAYE if I only pay directors' fees?
Yes — directors are employees for PAYE purposes, regardless of whether they draw a salary or dividends.
Can Amashad handle my payroll?
Yes — we register your PAYE, UIF and SDL with SARS and Labour, and offer monthly payroll administration from R500 per month.
Register Your PAYE, UIF & SDL with Amashad
Skip the SARS queues and eFiling frustration. Amashad completes your full employer registration — PAYE, UIF (SARS + Labour), and SDL — in 5–7 working days for a single flat fee. [Request a quote](/services) or contact us on WhatsApp today.