How to Read Your South African Payslip

•5 min read
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How to Read Your South African Payslip

Most South Africans check their payslip the same way: scroll to net pay, see if it matches last month, close it.

That habit means that if your employer is deducting too much PAYE, skipping your UIF contributions, or underpaying your provident fund, you would never know. Your payslip is a legally required document - the Basic Conditions of Employment Act says every employer must give you a written payslip every time you are paid. That document shows exactly what happened between your gross salary (the number in your offer letter) and the number that hits your bank account.

Here is how to read it.

The two sides: earnings and deductions

Every payslip has earnings (what you are owed) and deductions (what gets taken off). Net pay is what remains.

The earnings side

Basic salary. Your contracted base amount. Everything else builds on this.

Overtime. Hours worked beyond your contracted hours. Check your contract for the rate - typically 1.5x for the first few hours, 2x for work on public holidays or rest days.

Travel or car allowance. A regular allowance for using your own vehicle for work. Note: 80% of a travel allowance is included in your taxable income by default. You reclaim the portion based on actual business kilometres via your annual tax return - but only if you keep a logbook. Without a logbook, the full 80% stays taxable.

Commission. Fully taxable variable pay. It is added to your income for the month and taxed at your marginal rate.

Annual bonus or 13th cheque. Usually on a separate payslip for the payment month. A bonus is added to that month's income and taxed at your marginal rate - which is why a R30,000 bonus does not yield R30,000 in hand.

The deductions side

PAYE (Pay As You Earn). The portion of income tax SARS collects monthly via your employer. The amount depends on your annualised taxable income, your age (rebates differ), and adjustments for medical aid and retirement contributions. If you are on the same salary as last month and PAYE changes, ask HR for an explanation.

UIF (Unemployment Insurance Fund). Exactly 1% of your salary, capped at the monthly UIF remuneration ceiling (around R17,712/month as of 2026). Your employer also contributes 1% separately. The UIF deduction on your payslip is only your share. If UIF is not on your payslip at all, your employer may not be registering you - which affects future claims for unemployment or maternity benefits.

Pension or provident fund. Your monthly retirement contribution, typically 5-15% of your salary. This is deducted before PAYE is calculated, reducing your taxable income and therefore your tax bill. It is worth knowing your contribution rate as agreed in your contract.

Medical aid. Your portion of the monthly premium. The employer's contribution typically does not appear on your payslip - only yours does.

Medical tax credit. Your medical aid contributions generate a monthly tax credit that reduces the PAYE you owe. If you see a line for this (sometimes labelled "medical aid credit" or similar), it is working correctly - it is a reduction of your PAYE, not an extra deduction.

Why your taxable income is not your gross salary

PAYE is calculated on your taxable income, which is lower than your gross income. The calculation works like this:

Gross income, minus retirement fund contributions (up to 27.5% of income, capped at R350,000 per year), equals taxable income.

From the tax calculated on that taxable income, SARS then subtracts:

  • Primary rebate (a fixed reduction for all taxpayers under 65)
  • Medical aid tax credits (based on contributions and the number of dependants)

The result is your monthly PAYE. Two people on identical gross salaries can have meaningfully different PAYE if one contributes significantly more to a retirement fund.

The IRP5 at year end

At the end of each tax year (28 February), your employer issues an IRP5. This summarises everything your payslip recorded over the year: total remuneration, total PAYE deducted, UIF contributions, medical aid contributions, and retirement fund contributions. When you file your income tax return on SARS eFiling in July or August, the IRP5 data pre-populates your return.

If your employer does not provide an IRP5, they are in breach of the law. Follow up with HR. If they cannot provide it, contact SARS directly at 0800 00 7277.

What to check every month

Does the PAYE look roughly right? Use the CoolNerds PAYE calculator to estimate what your deduction should be. A significant unexplained change month-to-month is worth querying.

Is UIF being deducted? It should always be 1% of your salary up to the ceiling. If it is missing, your employer may not be paying over UIF on your behalf - which matters if you ever claim unemployment, illness, or maternity benefits.

Does the retirement fund contribution match your employment contract? If less is being deducted than agreed, less is accumulating in your fund.

Is net pay consistent with last month? Unexplained changes - even small ones - are worth checking. Payroll systems do make errors.

If something is wrong

Start with HR or payroll. Most discrepancies are genuine system errors and get corrected quickly once flagged.

If the error is persistent, or if you suspect your employer is not paying over your PAYE or UIF to SARS:

  • PAYE non-payment: Report to SARS at sars.gov.za or call 0800 00 7277
  • UIF non-payment: Report to the Department of Employment and Labour at 0800 843 843 or labour.gov.za

Both are serious legal obligations for employers and both are reportable. You do not have to absorb the consequences of your employer's non-compliance.

Your payslip is not just a receipt. It is the only regular document showing whether your employer is meeting their legal obligations to you. Read it.