Payroll for small business: one month, payslip to EMP201
Payroll for small business in South Africa is one loop a month. Collect the hours, issue each payslip, deduct PAYE and UIF, and add SDL. Then declare and pay all of it to SARS on the EMP201 within seven days of month end. Twice a year, the EMP501 reconciles the lot.
This month the loop has two dates on it. The September EMP201 is due today, 7 October. The EMP501 interim reconciliation closes on 31 October.
The worked example
Take a contractor with 12 people on the books: an office of two and two crews of five, one on a site in Midrand and one in Polokwane. The business is illustrative. The obligations are not. Every registered employer carries the same calendar.
Step 1: hours from the site
Payroll starts on site, not in the office. Each foreman sends a timesheet at month end, usually as a photo on WhatsApp. The office types it in.
Most payroll errors start here. A crew member who moved from Midrand to Polokwane halfway through the month appears on both sheets, or on neither. Settle one rule before you pay anyone: one list of people, and each site's hours are recorded against a name on that list.
Step 2: the payslip
Each person gets a payslip showing hours, rate, gross pay, every deduction and net pay. Section 33 of the Basic Conditions of Employment Act requires these details in writing on each day an employee is paid. Section 28 exempts employers with fewer than five employees, which our contractor is not. Keep a copy, because the same figures feed every SARS return that follows.
Step 3: PAYE, UIF and SDL
Three amounts come off or sit on top of each gross figure.
PAYE is income tax deducted from the employee. It depends on each person's pay, so work it out per person. The free PAYE calculator does one employee at a time.
UIF is shared. SARS states that employees and employers each contribute 1% of remuneration. On a labourer earning R8,000 a month, that is R80 off the payslip and R80 from the business.
SDL is paid by the employer only, at 1% of the total paid in salaries. An employer whose payroll will not exceed R500,000 over the next 12 months is exempt. Our contractor, at roughly R150,000 a month, is well over that, so it owes about R1,500 a month.
Step 4: the EMP201 by the 7th
The EMP201 is the monthly declaration. SARS describes it as a payment return declaring the total, with the split between PAYE, SDL, UIF and ETI. Payment is due within seven days after the end of the month in which the tax was deducted.
When the 7th falls on a weekend or public holiday, pay on the last business day before it. That is why the next one is due on Friday 6 November, not Saturday the 7th. The compliance calendar of SARS employer dates sets out the full year.
The declaration and the payment are two separate acts. Filing the return without paying, or paying without filing, both leave the account wrong.
Step 5: the EMP501 interim by 31 October
The EMP501 is the reconciliation. The interim one covers 1 March to 31 August, and the SARS window for it runs from 21 September to 31 October 2026.
According to the SARS reconciliation page, three things must agree: the EMP201s you declared, the payments you made, and the PAYE, SDL and UIF values on the IRP5 and IT3(a) certificates. If they do not balance, SARS says it will alert you by letter. File before the deadline to avoid penalties and interest.
For our contractor, the trap is the crew member who appeared on two sites. If he was paid twice in April and corrected in May, the certificates and the monthly declarations may not match. Find that now, while there is still time to correct an EMP201.
Different rates on different sites
Paying the Polokwane crew less than the Midrand crew for the same work is a decision you may need to defend. Write the reason for each rate down.
On 11 August 2026 the Labour Court decided Mulaudzi, where Pretoria staff earned R14,216.50 a month against R17,857.87 for a comparable Johannesburg employee. The Labour Guide summary records the court's view that there could be rational explanations, "such as different market conditions, cost-of-living considerations or operational requirements".
The court found the location was "a circumstance of employment" rather than a ground of unfair discrimination on those facts. It also said geography could be discriminatory in another context, and it left the CCMA award standing, though it refused to make it an order of court. A written reason, dated when the rate was set, is far easier to stand behind than one reconstructed for a hearing.
Where payroll for small business stops fitting in a spreadsheet
At 12 people the loop runs on two foremen, one admin person and a spreadsheet. It breaks when the site register, the payroll and the SARS return each keep their own list of names. The crew member moves sites, one list updates, and October's reconciliation finds the gap.
Zorah joins the site register, payroll and leave records your team already keeps into one list of people, so the hours, the payslip and the EMP201 read from the same names. The same records feed the job cards and site operations the foremen already work from.
Before 31 October, pull the six EMP201s from March to August and add them up. Then check the total against the PAYE, UIF and SDL on your IRP5s. If the two numbers differ, you have found this month's job.