In the bursar's office, fee collection gets the attention and payroll gets the months. But payroll is usually the school's biggest cost, and the employer side of it carries hard, monthly, non-negotiable deadlines. Getting it wrong produces penalties, angry staff and a SARS file nobody wants to open. The good news is that the employer basics are small in number and highly repeatable. Here they are.
First: register as an employer
Before the school pays its first employee, it must register as an employer with SARS. Registration covers the payroll taxes in one place: PAYE (the tax deducted from salaries), UIF (unemployment insurance) and SDL (the skills levy). The registration is done through eFiling, and it is the foundation everything else hangs off.
If your school is new or you have taken over the finance role, confirm the registration actually exists. Schools that have been running for years and never registered are more common than you would think, and the fix starts with one phone call to SARS.
PAYE: deduct monthly, pay on time
PAYE (Pay-As-You-Earn) is the tax the school deducts from employees' salaries and pays over to SARS. The rhythm is simple:
- Deduct every month from each employee's salary using the SARS tax tables, before the money reaches the staff member.
- Pay SARS by the 7th of the following month, together with the EMP201 return.
- Submit even when nothing is owed. A month with no PAYE liability still gets a nil return. Missing returns create interest and penalties that are painful to unwind.
The amounts the school deducts are the employees' tax, not the school's money; holding onto them past the 7th is where late-payment interest starts accruing. This is a discipline, not a negotiation.
UIF: the 1% and the 1%
Unemployment Insurance Fund contributions are collected together with PAYE through SARS:
- Employees contribute 1% of their remuneration, deducted from salary.
- The employer contributes a matching 1%.
- Both are paid monthly with the EMP201 and shown on payslips.
Some categories of employment are exempt from UIF, but for the ordinary school payroll the 1% and 1% applies. One detail worth knowing: contributions are only due on remuneration up to a statutory monthly ceiling, so very senior salaries stop attracting UIF at that level. Your payroll system handles the calculation and the ceiling; your job is to make sure it is actually happening and being paid over.
SDL and COIDA: the two that get forgotten
Two obligations sit just outside the monthly PAYE rhythm and are the ones schools most often miss:
- Skills Development Levy (SDL). 1% of the payroll, payable by employers whose total annual remuneration of all employees exceeds the statutory threshold (R500,000 over the next 12 months). Once you cross it, it applies from the relevant date and it compounds if missed. Two notes for schools: public benefit organisations approved by the Tax Exemption Unit are exempt from SDL entirely regardless of payroll size, so check whether your school holds that status before budgeting for it - and confirm the current rules with your accountant or SARS.
- COIDA. Under the Compensation for Occupational Injuries and Diseases Act, the school must register with the Compensation Fund and pay an annual assessment based on its payroll and industry risk rating. This is the insurance that covers staff injured at work. It is annual, easy to postpone, and not optional.
Employees vs independent contractors
This is the quiet trap in school payrolls. Independent contractors - coaches, relief teachers, therapists and other specialists - are often engaged with an invoice instead of a payslip, and that is fine when they genuinely are contractors. The mistake is calling someone a contractor when they are really an employee.
The test is about control and integration, not about what you call the relationship: does the school direct how, when and where the work happens? Does the person work as part of the school's team with its tools and its hours? If yes, SARS (and the labour courts) will treat them as an employee, which means PAYE, UIF, leave and the rest were due all along - plus interest and penalties for the months they were not paid.
If your school uses a stable team of "contractors" who turn up every term and do the same job as employees, get the classification reviewed before SARS does.
The annual rhythm: EMP501 and IRP5s
Beyond the monthly EMP201, the employer year has two bigger beats:
- Twice-yearly reconciliations (EMP501). SARS wants a reconciliation of the monthly deductions, usually once in the first half of the year and again in the second. The process compares what the school deducted against what employees were issued, and flags mismatches for follow-up.
- Employee tax certificates (IRP5/IT3(a)) issued to every employee at year end, and submitted to SARS with the reconciliation. Staff need these to file their own returns; late certificates are a staff-relations problem as much as a SARS one.
If these feel like a wall of deadlines, they are - and that is precisely why the calendar should hold them. Add the EMP201 7th, the two EMP501 windows and the year-end certificate run to the same compliance calendar as everything else. Our annual compliance checklist keeps the full list in one place.
Records to keep
Payroll records are the audit trail behind every deduction, and they are also employee records in the POPIA sense. Keep:
- Monthly payroll runs with the calculations behind each salary.
- Payslips and proof they were issued (electronic delivery is fine).
- EMP201 returns and payment proof for every month.
- Reconciliation documents for both EMP501 periods.
- Employee files: contracts, tax numbers, bank details, leave records - secured, with access limited to the staff who need them.
Because these records contain personal and financial information about staff, the same protection you give parent data applies here. If your school's approach to protecting personal information needs work, our guide to POPIA for the bursar's office walks through it.
Payroll software, not spreadsheets
Every school starts payroll on a spreadsheet and every school eventually regrets it. Tax tables change, rates change, thresholds change, and a spreadsheet updates only when someone remembers to update it. A proper payroll system (or a good outsourced payroll partner) keeps the tables current, calculates the deductions, generates payslips and produces the EMP201 and EMP501 files SARS expects.
This is not an expense to economise on. The cost of one wrong tax table year, in penalties and staff irritation, dwarfs the annual price of a payroll system. Bursars who run payroll properly treat it as a line in the budget, not a spreadsheet they inherited.
Sources & further reading
- SARS: Pay As You Earn - PAYE, UIF, SDL registration, returns and reconciliation guidance.
- SARS: Tax deduction tables - the monthly PAYE tables your payroll uses.
- Department of Employment and Labour - UIF and COIDA registration and assessment.
- ISASA: Overview of the Bursars' Toolkit - practical guidelines for the bursar's office, compiled with SABISA.
- Annual Compliance Checklist for Independent Schools - where the employer duties sit in the year.
This page is general information, not tax or legal advice. Employer obligations depend on your school's specific circumstances, staffing and remuneration. Confirm the details that apply to your school with your accountant, payroll provider or tax advisor.
