When must I register for PAYE?

Within 21 business days of becoming an employer, meaning from when you first pay remuneration that is subject to employees tax. Registering late attracts penalties even if no tax was ultimately due.

Do I need to register for PAYE for one employee?

Yes, if that person is an employee and their remuneration is subject to employees tax. The obligation is triggered by being an employer, not by headcount or by the employee earning above the tax threshold.

What is the difference between EMP201 and EMP501?

The EMP201 is a monthly declaration and payment of PAYE, UIF and SDL, due by the 7th of the following month. The EMP501 is a reconciliation submitted twice a year that ties your monthly EMP201s to the tax certificates issued to employees.

Must I register for UIF and SDL as well?

UIF applies to almost all employees, at 1% from the employee and 1% from you, capped at R17,712 of monthly earnings. SDL applies at 1% of total payroll only once your annual payroll exceeds R500,000.

PAYE Registration in South Africa: A Step-by-Step Guide

The moment you pay your first employee, you have 21 business days to register for PAYE. Most first-time employers discover this deadline after they have missed it.

Here is the whole process.

When the obligation starts

You must register as an employer within 21 business days of first paying remuneration subject to employees tax.

This is triggered by the act of employing, not by the size of the payroll. One part-time employee is enough. It applies even if that person earns below the annual tax threshold — you may deduct no PAYE from them, but you still register, still submit EMP201s, and still issue a tax certificate.

What you actually register for

Three separate but linked obligations, all declared on the same monthly form:

PAYE (employees tax). Tax withheld from the employee's salary and paid to SARS on their behalf. Calculated on sliding brackets with rebates applied.

UIF. 1% deducted from the employee and 1% contributed by you, so 2% total. Both sides are capped at monthly earnings of R17,712, which caps each contribution at roughly R177 a month.

SDL. 1% of your total payroll, payable by you only. This kicks in only once your annual payroll exceeds R500,000. Below that you are exempt.

Registering

Have your details ready. Company registration documents, income tax reference number, bank details, business address, and the details of a public officer or representative.

Register on eFiling. Log in, go to the SARS registered details section, and add PAYE. UIF and SDL are registered alongside it where applicable.

Register with the UIF separately through the Department of Employment and Labour. SARS collection does not replace the Labour Department registration.

Record your PAYE reference number. It goes on every EMP201, every EMP501, and every tax certificate.

Monthly: the EMP201

Due by the 7th of the month following the payroll month. If the 7th falls on a weekend or public holiday, submit and pay by the last business day before it.

The EMP201 declares:

PAYE withheld from all employees

UIF, both the employee 1% and your 1%

SDL, where applicable

The total payment due

Late payment attracts a 10% penalty plus interest. This is one of the deadlines SARS enforces most consistently, because the money is not yours — you withheld it from someone else's salary.

Twice yearly: the EMP501

The EMP501 reconciles your monthly declarations against the certificates issued to employees.

Interim reconciliation: covers March to August, submitted around September or October.

Annual reconciliation: covers the full tax year to end February, submitted around April or May.

The reconciliation must balance three things: your EMP201 declarations, the payments you actually made, and the IRP5 and IT3(a) certificates issued to employees. Mismatches are one of the most common triggers for a payroll audit.

Annually: employee tax certificates

Each employee receives an IRP5 where tax was deducted, or an IT3(a) where remuneration was paid but no tax was deducted. These are generated from your EMP501 submission and flow through to the employee's own tax return.

Common and expensive mistakes

Registering late. The 21 business day clock is short and it starts at first payment.

Treating employees as contractors. SARS applies substance over the label on the agreement. Get this wrong and you are liable for the PAYE you should have withheld, plus penalties and interest.

Missing the 7th. Diarise it as a hard deadline.

UIF cap errors. The 1% applies to earnings up to R17,712 a month, not to the full salary of a higher earner.

Registering for SDL unnecessarily. Below R500,000 of annual payroll you are exempt. Confirm before you start paying it.

EMP501 that does not reconcile. Fix the monthly records as you go rather than trying to force a reconciliation six months later.

Directors and sole proprietors

Directors of private companies are generally subject to employees tax on their remuneration and belong in the payroll.

A sole proprietor is not their own employee. You do not pay yourself a salary through PAYE; your business profit is taxed in your own hands, typically through provisional tax.

Doing it without a bookkeeper

Every calculation above is rule-based. LEDGA applies the current PAYE brackets and rebates, handles the UIF ceiling of R17,712 automatically, only applies SDL once your payroll crosses R500,000, and produces EMP201 figures in SARS format each month.

Register first, then set up payroll. The 21 business day deadline does not wait for your software decision.

Try LEDGA free.