Employee Cost Calculator
Calculate the true cost of employing someone: salary + UIF + SDL + COIDA.
Last reviewed: Tax year: 2026/2027Source: Department of Employment and Labour
The gap between salary and total employment cost
When a company advertises a R30,000/month salary, the actual monthly cost to the employer is closer to R32,000–R40,000 depending on benefits, statutory levies, and insurance contributions. Understanding the gap helps employers budget accurately and helps employees negotiate compensation that reflects the full picture.
The components of total employment cost split into three buckets: statutory obligations (UIF, SDL, COIDA), benefits (medical aid, provident/pension), and fringe benefits that carry fringe benefits tax.
Statutory levies — what every employer pays
| Levy | Rate | Ceiling / threshold | Monthly max |
|---|---|---|---|
| UIF (Unemployment Insurance Fund) | 1% of remuneration | R17,712/month | R177 |
| SDL (Skills Development Levy) | 1% of payroll | Exempt if annual payroll < R500,000 | No cap (1% of all remuneration) |
| COIDA (Compensation Fund) | 0.5% – 4% of payroll (industry-specific) | Set by Compensation Commissioner annually | Varies by sector and risk class |
UIF — employer side
Employers contribute the same rate as employees: 1% of remuneration, capped at the R17,712 monthly ceiling. The combined 2% (employee + employer) is remitted to the UIF via SARS every month on the EMP201.
Domestic workers registered with the Labour Department pay UIF at the same rates. Since 2003 domestic workers must be registered with the UIF — employers who fail to register face back-payment of contributions plus penalties.
SDL — Skills Development Levy
The SDL funds SETA (Sector Education and Training Authority) training. Employers with an annual payroll above R500,000 pay 1% of all remuneration to SARS. Small businesses below the threshold are exempt — this is a significant saving for businesses with 5–8 employees.
Up to 20% of the SDL paid can be reclaimed by employers through SETA grants if they submit a Workplace Skills Plan and Annual Training Report. The remaining 80% is distributed by the SETA for discretionary training projects.
COIDA — Compensation for Occupational Injuries and Diseases
COIDA provides no-fault compensation to employees who are injured at work or contract an occupational disease. The cost to the employer depends on the industry risk class (higher-risk industries like mining and construction pay more than low-risk office environments).
| Industry | Approximate COIDA rate |
|---|---|
| Low-risk office (professional services, finance, IT) | 0.5% – 0.8% |
| Retail, wholesale, warehousing | 0.8% – 1.5% |
| Manufacturing, motor trade | 1.5% – 2.5% |
| Construction, mining, agriculture | 2.5% – 4.0% |
Worked examples
Junior developer — R25,000/month, small startup (<R500k payroll)
Startup with 4 staff, annual payroll below SDL threshold. Low-risk office environment.
- Gross salary
- R25,000/month
- Employer UIF (1% × R17,712 ceiling)
- R177/month
- SDL
- Exempt (payroll < R500k/year)
- COIDA (~0.7% of R25,000)
- ≈ R175/month
- Medical aid employer contribution (typical)
- R1,500–R3,000/month
Operations manager — R50,000/month, mid-size company
Company with R5m annual payroll. SDL applies. Manufacturing environment (2% COIDA).
- Gross salary
- R50,000/month
- Employer UIF (1% × R17,712 ceiling)
- R177/month
- SDL (1% × R50,000)
- R500/month
- COIDA (2% × R50,000)
- R1,000/month
- Medical aid (employer contributes R2,500)
- R2,500/month
Senior manager on R120,000/month — true cost
Large financial services firm. No cap on SDL or COIDA. 0.6% COIDA (low risk).
- Gross salary
- R120,000/month
- Employer UIF (capped at ceiling)
- R177/month
- SDL (1% × R120,000)
- R1,200/month
- COIDA (0.6% × R120,000)
- R720/month
- Medical aid employer contribution
- ~R5,000/month
Fringe benefits — cost that attracts PAYE
Some employer benefits are fringe benefits in terms of the Seventh Schedule to the Income Tax Act, meaning SARS taxes the employee on their value. Common examples:
| Benefit | Taxable value | Notes |
|---|---|---|
| Company car (private use) | 3.5% of determined value/month | Or 3.25% if maintenance plan included |
| Employer-paid medical aid | Amount contributed above 3× medical tax credit | Below the threshold is not taxable |
| Free or subsidised accommodation | Table value based on salary band | Published by SARS annually |
| Interest-free or low-interest loan | Difference vs SARS official rate (9.25%) | Employee loan at 0% → benefit = 9.25% of loan/year |
| Group life insurance | Employer-paid premiums taxable to employee | If paid for employee benefit |
How this calculator works
Enter the employee’s gross monthly salary, your approximate annual payroll (to determine SDL applicability), your industry COIDA rate, and any employer benefit contributions (medical aid, provident fund). The calculator returns the total monthly and annual cost to company, with a line-by-line breakdown of each component.
Sources
Frequently Asked Questions
Total cost of employing someone includes: annual salary, UIF contributions (employee + employer), SDL (Skills Development Levy), and COIDA insurance. This is the true cost-to-company.
UIF is 1% of gross salary (capped at R17,712 monthly ceiling). The employer pays 1% and the employee pays 1%. SDL adds an additional 0.5–1% for employers with payroll over R500,000.
The 2026/2027 minimum wage is R30.23 per hour. For a full-time employee (R249,285.25 threshold), the employer cost includes R30.23/hour × 2,000 hours/year + UIF + SDL.
PAYE is not an employer cost—it is withheld from the employee's salary. The employer deducts PAYE and remits it to SARS. The calculator shows gross cost before PAYE deduction.