It's late November and Zanele's gift shop at the V&A Waterfront is heaving. She's hired three students for the December rush, a cashier for weekends and a packer who comes in "when it's busy". Wages go out in cash every Friday, everyone's happy, and payroll is the last thing on her mind. Then, at year-end, her accountant spots the problem: no PAYE, no UIF and no IRP5s for any of them.

Hiring seasonal staff in South Africa is one of the smartest ways to handle peak trade. But temporary workers carry the same tax and labour obligations as permanent ones, plus a few rules of their own. Here's exactly what you owe, and how to get it right before the festive season starts.

Seasonal Staff Are Still Employees in the Eyes of SARS

A common misconception is that short-term workers sit outside the payroll system. They don't. If you control when and how someone works and you pay them for their time, they are almost certainly your employee, whether they're with you for three weeks or three years. Calling a holiday packer a "contractor" doesn't change that. SARS and the Department of Employment and Labour look at the substance of the relationship, not the label.

That means seasonal staff are entitled to at least the national minimum wage, which has been R30.23 per hour since 1 March 2026. They should also have a written contract that sets out the start and end dates of the engagement.

If you don't already run a payroll, register as an employer with SARS (using the EMP101e form on eFiling) within 21 business days of paying anyone who earns above the tax threshold. You must also register with the Unemployment Insurance Fund (UIF) and the Compensation Fund, which covers workplace injuries under COIDA.

PAYE for Casual and Temporary Workers

PAYE (Pay-As-You-Earn) is the income tax you withhold from wages and pay over to SARS each month. For seasonal staff, how you calculate it depends on how many hours they work.

Standard employment: 22 hours or more a week

If a temp works at least 22 hours a week for you, use the normal SARS deduction tables, exactly as you would for a permanent employee. Because the tables annualise earnings, many short-term workers fall below the tax threshold (R99 000 a year for under-65s in the 2026/27 tax year), so little or no PAYE is due.

Non-standard employment: under 22 hours a week

Workers on fewer than 22 hours a week, such as weekend-only staff, are classed as non-standard employees. Here, SARS requires you to withhold PAYE at a flat 25% from the first rand.

There are two important exceptions. You may use the normal tables if the worker gives you a written declaration that they have no other employer during the period. Limited relief also applies to full-day casuals who work at least five hours and earn below a daily limit set by SARS.

Consider the difference. A student working Saturdays and Sundays for 16 hours at R35 an hour earns R560 a week. Without a declaration, you must withhold R140 in PAYE. With a signed declaration, the tables apply and, on those earnings, PAYE is likely to be nil. Keep a declaration template ready on day one.

UIF for Temporary Employees: The 24-Hour Rule

UIF applies to anyone who works more than 24 hours a month for you, which covers almost every seasonal hire. Contributions total 2% of remuneration: 1% deducted from the employee and 1% paid by you, capped at earnings of R17 712 a month (a maximum of R177.12 each).

Back to Zanele: a temp earning R4 500 for the month has R45 deducted for UIF, and Zanele contributes another R45. These are small amounts, but missing them exposes you to penalties and interest, and can complicate the worker's UIF claim when the contract ends.

If you're registered with SARS for PAYE or SDL, UIF is paid on your monthly EMP201 return. You also need to declare new starters and leavers to the UIF via uFiling. End-of-season terminations are where most employers slip up.

SDL: When Extra Staff Push You Over the R500 000 Threshold

The Skills Development Levy (SDL) is 1% of your total payroll, paid by the employer only. It applies once your annual payroll is expected to exceed R500 000.

This is where seasonal hiring catches growing businesses off guard. A Durban restaurant with a R420 000 annual payroll might add R100 000 in December and January wages for extra waitrons and kitchen staff. That pushes the total past the threshold, and SDL becomes payable on the whole payroll, not just the portion above R500 000. Run the numbers before you hire so you can budget for the levy and register in time.

Your Seasonal Payroll Checklist

Before your first temp walks through the door:

1. Confirm your SARS employer, UIF and COIDA registrations are active.

2. Issue a written fixed-term contract with start and end dates, hours and hourly rate.

3. Collect each worker's ID number, tax number (if they have one) and banking details.

4. Get signed "no other employer" declarations from part-timers where they apply.

5. Record hours accurately; they determine PAYE treatment and UIF eligibility.

6. Submit your EMP201 and pay PAYE, UIF and SDL by the 7th of the following month.

7. Include every seasonal worker in your EMP501 reconciliations and issue IRP5 certificates.

Paying in cash doesn't exempt you from any of this. Late EMP201 payments attract a 10% penalty plus interest, and SARS can hold you liable for PAYE you should have withheld, even after the worker has left.

It's also worth checking whether you qualify for the Employment Tax Incentive (ETI), which can reduce the PAYE you pay over when you employ eligible young workers aged 18 to 29. Many seasonal hires fit that profile.

If this feels like a lot to manage during your busiest trading month, outsourcing payroll processing to a firm like Saber Accounting means every temp is set up correctly from the first pay run, and nothing surfaces as a surprise at reconciliation time.

Conclusion

Hiring seasonal staff in South Africa lets you meet festive demand without committing to permanent headcount, but the compliance obligations arrive with the first pay run. Get the hours right for PAYE, deduct and pay UIF for anyone working more than 24 hours a month, and watch the SDL threshold as your wage bill grows. Sorting this out in October or November is far cheaper than untangling penalties at year-end. With the right setup, your temporary team becomes a profit driver rather than a compliance risk.

Ready to get your finances in order?
At Saber Accounting, we help South African small businesses stay compliant, cut unnecessary costs, and make smarter financial decisions. Whether you need help setting up seasonal payroll, managing PAYE and UIF, or staying on top of your EMP201 submissions, our expert team is here.