Running a small business is challenging, especially when you don’t have a dedicated payroll or HR team. But generating accurate payslips for your employees is essential — it keeps things transparent, professional, and compliant with South African labor laws.
If you’re wondering how to create payslips yourself, calculate employee pay correctly, and track payments effectively, this guide is for you.
What Is a Payslip and Why Is It Important?
A payslip is a document that shows your employee how much they’ve earned during a pay period, along with deductions and net pay. It serves as proof of payment and helps employees understand their salary breakdown.
Payslips are legally required in South Africa under the Basic Conditions of Employment Act. Providing clear payslips builds trust and professionalism in your workplace.
Key Elements to Include on a Payslip
Employer and employee details (names, ID numbers)
Pay period dates
Gross salary or wages
Details of all deductions (tax, UIF, pension, medical aid, etc.)
Net pay (amount after deductions)
Leave balances (optional but helpful)
How to Calculate Payslips in South Africa
1. Determine Gross Salary or Wages
This is the total pay before deductions. It can be a monthly salary or hourly wage multiplied by hours worked.
2. Calculate Deductions
a. PAYE (Pay-As-You-Earn) Tax: South Africa uses a progressive tax system. PAYE is withheld by the employer and paid to SARS. Use SARS’s latest tax tables or an online calculator to find the exact tax amount for the employee’s income.
b. UIF (Unemployment Insurance Fund): Employers and employees each contribute 1% of the employee’s gross salary, capped at a monthly salary of R17,712 (2025 figure). So max UIF deduction per side = R177.12.
c. Other deductions (optional):
Pension/provident fund contributions
Medical aid
Loan repayments or garnishments
Step-By-Step Example
Suppose an employee earns R10,000 per month gross.
Gross salary: R10,000
PAYE: Use SARS calculator (approx. R850 for R10,000)
UIF: 1% employee = R100
UIF: 1% employer = R100 (not deducted from employee, but employer pays)
No other deductions
Net pay = Gross salary – PAYE – UIF Net pay = 10,000 – 850 – 100 = R9,050
Payslip Etiquette and Best Practices
Provide payslips on or before payday
Use clear, simple language and a clean format
Keep payslip records safely for at least 3 years
Be transparent about all deductions and benefits
Respect employee privacy when handling payroll info
How to Track Payslips and Payments
Use a spreadsheet to record pay periods, gross pay, deductions, and net pay for each employee
Maintain a separate file or folder (digital or physical) for all payslips issued
Regularly back up your payroll data
Consider simple payroll software or online tools as your business grows
Payslip Template (Copy & Paste Ready)
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[Your Company Name]
Payslip for the Period: [Start Date] to [End Date]
Employee Name: [Employee Full Name]
Employee ID / Number: [ID or Employee Number]
Position: [Job Title]
Gross Salary: R[Amount]
Deductions:
- PAYE Tax: R[Amount]
- UIF (1%): R[Amount]
- Other Deductions: R[Amount] (Specify)
Net Pay: R[Amount]
Date Paid: [Date]
Payment Method: [EFT / Cash / Other]
Leave Balance (Optional):
Annual Leave: [Days]
Sick Leave: [Days]
Thank you for your hard work!
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Final Thoughts
Creating payslips manually might seem daunting, but with a little organization and attention to detail, small businesses in South Africa can do it well — ensuring compliance, building trust, and keeping employees happy.
