Manage remote teams: Your guide for compliance

The remote work revolution is here to stay, giving South African businesses the chance to build talented, flexible teams. However, this way of working brings important questions about compliance, tax, and employment law. Many business owners operate on a dangerous assumption: that the rules for a remote employee are fundamentally different from those for an in-office one.

The reality is more straightforward but requires careful attention. South Africa’s core legal frameworks – from SARS regulations to the Basic Conditions of Employment Act – apply uniformly, regardless of where an employee logs in. The challenge isn’t navigating different provincial laws, but correctly applying national laws to a distributed workforce.

The foundation: National laws for a modern workforce

Your key responsibilities as an employer remain unchanged under remote work arrangements. The critical areas of focus are:

Employees’ Tax (PAYE)

Your obligation to deduct PAYE from an employee’s salary continues unchanged. The employee’s physical location does not alter this. Your payroll system must be accurate, and all deductions must be paid over to SARS on time. The key is ensuring your employee’s correct physical address is recorded for official documentation like IRP5 certificates.

Unemployment Insurance Fund (UIF) and Skills Development Levy (SDL)

Contributions to UIF (1% from the employer, 1% from the employee) and SDL (1% from the employer, if payroll exceeds R500,000) are mandatory for remote employees. These are national levies, and remote work does not exempt you or your employee from these contributions.

The Compensation for Occupational Injuries and Diseases Act (COIDA)

This is a critical area for remote work. COIDA requires employers to cover employees for injuries sustained arising from and in the course of their work. This includes the home office.

Action point: If an employee injures themselves while performing a work task at home, it may be considered a workplace injury. You must ensure your company is registered with the Compensation Fund and that your remote employees are covered. A clear policy for reporting workplace incidents, regardless of location, is essential.

Beyond payroll: The importance of a robust remote work policy

While the laws are national, how you manage the practicalities of remote work is where you build a compliant and productive framework. A comprehensive Remote Work Policy is no longer a luxury; it’s a necessity.

This policy should be an annexure to the employment contract and address:

• Place of work: Explicitly state that the employee’s primary place of work is their home address.

• Work hours and availability: Define core working hours, especially for teams collaborating across different time zones, to manage expectations.

• Equipment and expenses: Specify who provides and maintains equipment (laptop, software, office furniture). Crucially, outline which work-related expenses (eg a portion of internet costs) will be reimbursed, ensuring this aligns with SARS guidelines on allowable deductions.

• Health and safety: While you cannot control the home environment, the policy should include a clause where the employee confirms they have a safe and suitable workspace. It should also outline the procedure for reporting work-related injuries.

Clarifying common misconceptions

Myth: A remote employee creates a “permanent establishment” in their location.
Fact: For a South African company hiring employees within South Africa, this is generally not a concern. Your company is a single tax entity registered with SARS. The risk of creating a separate permanent establishment is primarily an issue for foreign companies operating in South Africa.

Myth: Managing remote payroll is overly complex.
Fact: The complexity lies in setup, not daily operation. With modern cloud-based accounting software and clear policies, processing payroll for a remote team is as straightforward as for an in-office team. The key is initial accuracy.

Your accountant is your compliance partner

Navigating this landscape confidently requires shifting your accountant’s role from historian to strategist. A good accounting partner will help you:

• Set up systems: Ensure your payroll is correctly configured for a remote team from the start.

• Develop sound policies: Assist in crafting a Remote Work Policy that is legally sound and practical.

• Advise on expenses: Provide clarity on which remote work expenses are reimbursable and compliant with SARS regulations.

• Offer peace of mind: Give you the confidence to build a distributed team, knowing your compliance bases are covered.

   

Embrace flexibility with confidence

The ability to hire remotely is a significant advantage for South African businesses. By understanding that compliance is about the correct application of national laws rather than navigating a patchwork of regulations, you can eliminate fear and focus on the benefits.

Ready to implement a compliant remote work strategy? Contact us today. We’ll help you review your payroll systems, draft an effective remote work policy, and ensure your business is built for the future of work.