Hiring your first employee is a milestone — and a compliance trigger. The moment you take someone on, a 21-day clock starts and you become responsible for PAYE, UIF, and possibly SDL. Get it right and it’s routine; miss a step (especially the Department of Labour one almost everyone forgets) and it gets expensive. Here’s the plain-English version.
When do you legally become an employer?
The day you hire your first employee, SARS gives you roughly 21 business days to register for the right combination of payroll taxes. “Employee” is broader than you might think — paying someone a regular salary almost always counts, even if it’s just one person.
The three things you register for
PAYE — the tax you deduct from salaries
Pay-As-You-Earn is income tax you withhold from your employee’s salary and pay over to SARS, normally by the 7th of the following month. You deduct it; you don’t pay it out of your own pocket.
UIF — and the step people miss
The Unemployment Insurance Fund is a 2% contribution (1% from you, 1% from the employee). The catch: you register for UIF with both SARS and the Department of Employment & Labour. Paying the SARS side but skipping the Labour side leaves your employee unable to claim UIF when they need it — a common and damaging mistake.
SDL — the skills levy (only sometimes)
The Skills Development Levy is 1% of your payroll, but it only applies once your total annual payroll exceeds R500,000 (verify the current figure with SARS). Below that, you’re generally exempt.
The one form that covers all three
You register for PAYE, UIF and SDL together using the EMP101e form via SARS eFiling. One registration, three obligations — then a separate UIF registration on the Department of Labour’s uFiling system to close the loop.
What you need before you start
- Your company registration details and CIPC documents
- Company bank account details
- Your employee’s details and signed employment contract
- Active SARS eFiling profile with a Public Officer appointed
The mistake almost everyone makes
Treating UIF as a SARS-only task. Register on the Department of Labour side too, or your worker isn’t really covered. It’s a five-minute step that saves a major headache later.
Your monthly obligations after registration
- Deduct PAYE and UIF from each salary
- Submit your EMP201 and pay SARS by the 7th
- Issue payslips that meet the BCEA requirements
- Contribute UIF on uFiling
- Issue IRP5s and reconcile (EMP501) at the relevant SARS filing seasons
Penalties for getting it wrong
Late or missed PAYE and UIF attract penalties and interest, and SARS can raise estimated assessments. The system rewards being set up properly from day one far more than scrambling after a notice arrives.
Becoming an employer adds a whole compliance layer — PAYE submissions, UIF on two systems, payslips, COIDA, and the monthly calendar that keeps them on time. The Core Course’s employer module walks you through every step and deadline so SARS and the Department of Labour never catch you out.
