Understanding PAYE & UIF

Learn how South African income tax (PAYE) and Unemployment Insurance Fund (UIF) contributions work. Master the calculations, brackets, rebates, and compliance requirements for accurate payroll processing.

2024/2025 Tax Year

This guide uses the current tax brackets and rates for the 2024/2025 tax year (March 2024 - February 2025). Tax rates are updated annually by SARS.

PAYE Tax Brackets (2024/2025)

Annual Income Range	Tax Rate	Annual Tax (Example)
R0 - R237,100	18%	R42,678
R237,101 - R370,500	26%	R77,362
R370,501 - R512,800	31%	R121,475
R512,801 - R673,000	36%	R179,147
R673,001 - R857,900	39%	R251,258
R857,901 and above	45%	Variable

Tax Rebates

Primary Rebate

R17,235

Available to all taxpayers

Secondary Rebate

R9,444

Taxpayers 65 years and older

Tertiary Rebate

R3,145

Taxpayers 75 years and older

UIF Contributions

Employee Contribution

Deducted from employee salary

Max: R177.12 per month

Employer Contribution

Paid by employer (additional cost)

Max: R177.12 per month

Total UIF

Combined employee + employer

Max: R354.24 per month

UIF Contribution Limits

UIF contributions are capped at a maximum monthly salary of R17,712. This means the maximum monthly UIF contribution is R177.12 per person (1% of R17,712).

Step-by-Step Calculation Process

Calculate Gross Salary

Basic salary + allowances + overtime + bonuses

Apply Retirement Fund Deductions

Deduct pension/provident fund contributions (if applicable)

Calculate Annual Equivalent

Convert monthly salary to annual amount for tax calculation

Apply Tax Brackets

Calculate tax using progressive tax brackets

Deduct Tax Rebates

Apply primary, secondary, or tertiary rebates

Convert to Monthly PAYE

Divide annual tax by 12 for monthly deduction

Calculate UIF

1% of gross salary (max R177.12)

Example Calculation

Monthly Salary: R25,000

PAYE Calculation

Annual Salary:R300,000
Annual Tax (before rebates):R54,000
Primary Rebate:-R17,235
Annual PAYE:R36,765
Monthly PAYE:R3,064

UIF Calculation

Monthly Salary:R25,000
UIF Rate:1%
Calculated UIF:R250.00
UIF Cap:R177.12
Monthly UIF:R177.12

Continue Learning

Statutory Deductions Explained

Learn about SDL, medical aid tax credits, and other mandatory deductions

SA Compliance Overview

Understand SARS reporting requirements and compliance deadlines

Master Payroll Calculations

Understanding PAYE and UIF is fundamental to South African payroll. Continue learning about other statutory requirements and compliance obligations.

Learn About SDL Payroll Timing