HomeIco

Home

 InternalIco

Internal
Deutsch|English
Insights Employer of Record in South Africa

Employer of Record in South Africa

PrintMailRate-it

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​published on 13 May 2024 | reading time approx. 2 minutes​

  

Although EoR services are offered in South Africa, the concept is not regulated by law. It is similar to temporary employment. Contractors do not require a special licence and contracts are open-ended. Tax risks may exist and there are special regulations in the double taxation agreement with Germany. The development of the EoR concept depends on obstacles such as obtaining visas and could be driven by the provision of foreign expertise to South African companies.
  ​

   

  ​​​​​

Is the concept of EoR known in your country? Is the concept of EoR regulated by law in your country?​​​

EoR services are offered in South Africa. In our experience, foreign companies show more interest in providing EoR services. EoR is not regulated by specific laws, and there is also no relevant case law.
  
The model of EoR in South Africa is similar to temporary employment.​
     

Special features of the activity within the framework of the EoR concept or labour leasing​

No special permit is required. Note that South African courts follow the substance of a contract rather than its legal form if the substance differs from the form of the contract. A licence or special permit for the economic employer's activities is not required and the contract is not limited in time.
  
The answer on the question of whether the employee is entitled to the same employment conditions as a regular employee of the economic employer depends on the term of the contract and whether the terms and conditions of the actual employer override those of the EoR employer. It may enhance the validity of the contract if employment conditions are the same as other regular employees.
     

What are the special tax features of the EoR concept in your country?​​

The risk of establishing a permanent establishment cannot be ruled out. South Africa follows OECD guidelines with regard to circumstances which can create a permanent establishment. 
  
A double taxation agreement between Germany and Soth Africa provides for special regulations on temporary employment. Remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if the income is subject to tax therein and the recipient is present in the other State for a period not exceeding in the aggregate 183 days in the fiscal year concerned other conditions are met.
     

How do you see the EoR concept developing in your country?​

There are other primary obstacles which must first be overcome, including obtaining the required visa. The model EoR may be helpful if it can bring the required skills to the country. Note also that many foreign companies with South African subsidiaries assign staff from their foreign head office to provide specialist skills in their South African subsidiaries.​​

Insights
Employer of Record
Employer of Record – A country overview of opportunities and limits​

Contact

Contact Person Picture

Roger Bramwell

+27 11 4793 000

Send inquiry

How we can help
Skip Ribbon Commands
Skip to main content
Deutschland Weltweit Search Menu