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Employer of Record FAQs

Unraveling the EOR Mystery: Your Curiosities Answered

Who can use your EOR services?

The vast majority of businesses can use our Employer of Record service in South Africa. Naturally, we vet all our clients to ensure that we are working with the right calibre of client from an industry and credit perspective.

The most common use cases are:

  • You are a platform-based global 'EOR' service using us as their in-country partner
  • You are a business with a global and/or remote workforce, and have found a member of staff in South Africa and now need an EOR to ensure compliance
  • You are a business looking to hire cost-effective and talented staff in South Africa to fulfill a function that is costly in your home jurisdiction and this function doesnt have to be based there
  • You are looking to launch commercially in South Africa but want to test the waters before launching into a full in-country setup

What are the employer tax contributions in South Africa?

There are 3 employer contributions to pay;

  1. UIF - The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption, parental leave, or illness. This contribution is, in the majority of cases, 1%
  2. SDL - The Skills Development Levy (SDL)  is a levy imposed to promote learning and development in South Africa and is driven by an employer's salary bill. The funds are to be used to develop and improve the skills of employees. This contribution is, in the majority of cases, 1%
  3. COIDA - The Compensation for Occupational Injuries and Diseases Act provides a system of no-fault compensation for employees injured or who contract diseases during the course of their employment. This contribution is hard to quantify as it is variable.

All in all, we make provision for c.3.5% in employer contributions.

There are optional additional employer costs, such as medical aid and pension, that are at the full discretion of the employer. We can add these on as part of packages; this certainly helps attract the best-caliber talent.

How much does your Employer of Record service cost?

In addition to the salary and benefits/variable compensation, we charge a fixed and clear amount to our clients. We run a strict no surprises policy, but this cost really is variable from client to client depending on requirements.

We tell clients to budget for 10% of the gross cost, with a minimum amount per staff member.

How do payroll payments work?

South African pay cycles are monthly, and payday falls on the 25th of the month (or the working day immediately after).

We will bill you a single amount from the UK in your local currency.

We get preferential FX rates and know how painful FX can be, but if you insist, we can bill you in South African Rand.

If it is GBP, we will take payment from you on payday by direct debit. If it is another currency, we will require payment to have hit our account by payday.

We have a per-payroll charge of £25, which covers the cost of our same-day transfers to staff in South Africa.

How do you deal with confidentiality, data security and IP?

South African policy is to encourage foreign business investment in the country. As such, they understand the requirement for robustness when it comes to data security, IP, and confidentiality. So do we.

  • Government - South Africa is heavily regulated from a data protection perspective via the Protection of Personal Information Act (often called the POPI Act or POPIA). This Act looks a lot like GDPR in the UK and is as robust as all data protection laws in the USA.
  • The Legends Agency - We work with our clients to ensure optimum data security, IP protection, and confidentiality. Our employment contracts and policies are aimed at aligning all staff in South Africa with our clients' data protection policies in their home country. We also have a full in-house IT support team that can work with our client IT support to ensure correct setup, correct IT protection, and the physical delivery, collection, and erasure of hardware. Our standard position is that one of our EOR staff is no more of a data risk than a member of staff in your HQ.

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