Employee cost calculator

This calculator works out what an employee costs the business, as opposed to what the employee is paid. The gap is made up of three statutory contributions that fall on the employer, UIF, the skills development levy and the COIDA assessment, plus whatever the employer has agreed to contribute to a pension or medical scheme and whether a thirteenth cheque is guaranteed. It is for anyone hiring for the first time, for small businesses budgeting for a new post, and for the common moment when an owner says "I pay her R15 000" and is surprised to find the true figure is closer to R17 000.

The statutory rates are stable, but the UIF ceiling and the COIDA earnings cap are adjusted by notice, so the calculator reads them from a dated rate table rather than from the text of this page.

What this calculator works out and who it is for

You enter the gross monthly salary, the total annual payroll of the whole business if you know it, your COIDA tariff per R100 of earnings from your Compensation Fund assessment notice, the employer's pension or provident contribution as a percentage, the employer's monthly medical aid contribution, and whether a thirteenth cheque is guaranteed. The calculator returns each cost on its own line, the total monthly cost to the employer, the percentage by which that exceeds the salary, and the annual total.

It is deliberately an employer's tool. PAYE and the employee's own UIF and fund contributions come out of the salary and are not costs to the business, so they are not here. If you are an employee trying to work out your take-home pay, this is the wrong calculator.

How the calculation works

UIF is one per cent of the employee's remuneration, paid by the employer, up to the monthly earnings ceiling, with a matching one per cent deducted from the employee. The calculator takes the lower of the salary and the ceiling and applies one per cent to it. On a salary above the ceiling the employer's contribution stops growing.

The skills development levy is one per cent of the employee's remuneration, but only employers whose total annual payroll exceeds the exemption of R500 000 pay it. The calculator uses the total payroll you enter to decide; if you leave it blank, it judges on this one salary and warns you that the real test is the whole payroll, because a business paying five people R9 000 a month is over the exemption even though no single salary comes close.

The COIDA assessment is an annual amount at a tariff per R100 of earnings set for your industry class, applied to each employee's earnings up to the Compensation Fund's annual ceiling. The calculator multiplies the lower of annual salary and the ceiling by your tariff, divides by 100 to get the annual assessment, and divides by twelve for the monthly share. If you leave the tariff blank it leaves COIDA out and says so, because the tariff varies from a fraction of a rand per R100 in an office to several rand in construction or security and there is no sensible default.

Pension or provident contributions are the percentage you enter applied to the salary. Medical aid is the rand figure you enter. A thirteenth cheque, if guaranteed, is a month's salary spread across twelve, so a twelfth of the salary is added to each month. The lines are summed, the uplift over salary is expressed as a percentage, and the annual figure is the monthly total times twelve.

The law behind the numbers

The Unemployment Insurance Contributions Act 4 of 2002 requires every employer to pay a contribution of two per cent of the remuneration of each employee, half deducted from the employee and half from the employer, on remuneration up to a ceiling the Minister sets by notice. The contributions are paid to SARS monthly with the EMP201 return, or to the Fund directly by employers not registered with SARS for PAYE. The ceiling has stood at R17 712 a month, R212 544 a year, since 1 June 2021. Domestic employers pay the same two per cent.

The Skills Development Levies Act 9 of 1999 imposes a levy of one per cent of the leviable amount, which is the employer's total remuneration bill, payable monthly to SARS. Section 4(b) exempts an employer whose total remuneration for the next twelve months will not exceed R500 000. The levy goes to the National Skills Fund and the sector education and training authorities, and an employer that pays it can recover up to 20 per cent as a mandatory grant by submitting a workplace skills plan and annual training report to its SETA by 30 April each year, plus discretionary grants for approved training.

The Compensation for Occupational Injuries and Diseases Act 130 of 1993 requires every employer to register with the Compensation Fund and to pay an annual assessment, calculated under section 83 as a percentage of the earnings of its employees at a rate set for the employer's industry class, with earnings per employee capped at a maximum the Minister sets under section 83(8). From 1 March 2026 that maximum is R668 000 a year, up from R633 168. The employer submits a return of earnings each year declaring actual earnings for the past year and estimated earnings for the next, and the Fund issues an assessment. Section 82 refers to 31 March, but the Fund announces a filing window each year, which ran from 1 April to 30 June in 2026. The minimum assessment for an ordinary employer is R1 621 a year, and for a domestic employer R560. In return, employees injured at work claim from the Fund rather than suing the employer.

None of these contributions may be deducted from the employee's pay except the employee's own half of UIF. An employer that recovers its own UIF, SDL or COIDA from salaries is making an unlawful deduction under section 34 of the Basic Conditions of Employment Act, and the salary deduction checker deals with that.

Worked example

A design studio with a total payroll of R2 million a year hires a designer at R20 000 a month. The studio's COIDA tariff is R1 per R100, it contributes 7.5 per cent of salary to a provident fund and R1 500 a month to medical aid, and a thirteenth cheque is guaranteed.

UIF: the salary exceeds the ceiling of R17 712, so the employer's one per cent is R177.12. SDL: payroll of R2 million is over the exemption, so one per cent of R20 000 is R200. COIDA: annual earnings of R240 000 are under the R668 000 cap, so the assessment is R240 000 at R1 per R100, which is R2 400 a year or R200 a month. Provident fund: 7.5 per cent of R20 000 is R1 500. Medical aid: R1 500. Thirteenth cheque: R20 000 spread over twelve months is R1 666.67.

The total monthly cost is R25 243.79, which is 26.2 per cent above the salary, and the annual cost is R302 925.48. The salary the designer sees is R20 000; the number the studio must budget is a little over R25 000. Had the studio been a two-person business with a total payroll of R300 000, the SDL line would be zero and the uplift correspondingly smaller; the calculator's warning about judging SDL on one salary is there because the whole payroll decides it.

What the calculator does not include

It does not include the cost of leave. Annual leave, sick leave and family responsibility leave are paid time not worked, which in budgeting terms adds roughly eight to ten per cent to the effective hourly cost of an employee's output. Parental leave is unpaid by the employer unless a policy says otherwise.

It does not include bargaining council levies, which apply in sectors with a council and are set by the council's agreement.

It does not include the employment tax incentive, which reduces PAYE payable for qualifying young employees and is a saving rather than a cost.

It does not include recruitment, onboarding, training, equipment, software licences, workspace or the time spent on payroll administration, all of which are real costs of employing someone.

It does not know your COIDA tariff. The tariff depends on the industry class the Fund has assigned you and is on your assessment notice; the calculator asks for it rather than guessing.

It does not calculate the employee's take-home pay.

When to get advice

A first-time employer should register with SARS for PAYE, UIF and SDL in one application, register with the Compensation Fund, and set up a payroll before the first pay day; the guide for first-time employers sets out the steps. Get a payroll provider or an accountant involved if you have more than a handful of employees, if you are near the SDL exemption, or if you have never submitted a return of earnings to the Compensation Fund, because an injured employee of an unregistered employer is still paid by the Fund, and since 1 April 2026 the employer can be made to pay a penalty of up to the full compensation payable for that injury. Get advice before structuring pay to minimise contributions; an "allowance" that is really salary is remuneration for all three levies.

Frequently asked questions

How much does an employee cost on top of salary? At minimum, the employer's UIF at one per cent up to the monthly cap, SDL at one per cent if the total payroll exceeds R500 000, and the COIDA assessment at your industry tariff on earnings up to R668 000 a year. With pension and medical contributions and a thirteenth cheque the uplift is commonly 20 to 30 per cent.

Who pays UIF? Both. The employer pays one per cent and deducts a matching one per cent from the employee, on remuneration up to R17 712 a month. The employer pays both over to SARS.

Do I have to pay the skills development levy? Only if your total annual payroll exceeds R500 000. Below that you are exempt. Above it, the levy is one per cent of total remuneration, and you can recover up to 20 per cent as a mandatory grant through your SETA.

What is the COIDA assessment? An annual payment to the Compensation Fund at a tariff per R100 of earnings set for your industry class, on each employee's earnings capped at R668 000 a year from 1 March 2026. It covers employees for injuries and diseases at work. The Act refers to 31 March, but the Compensation Fund sets the filing window by notice each year: for the 2025 assessment year it ran from 1 April to 30 June 2026 on ROE Online.

Can I deduct these costs from the employee's salary? No, apart from the employee's own half of UIF. The employer's UIF, SDL and COIDA are the employer's costs, and recovering them from pay is an unlawful deduction.

Does a thirteenth cheque count as salary for UIF and SDL? Yes. Bonuses are remuneration for both, which is one reason the calculator accrues it monthly.

Is PAYE a cost to the employer? No. PAYE is the employee's income tax, withheld from the salary and paid to SARS on the employee's behalf. The employer's cost is the gross salary, not the gross plus PAYE.