Payroll records

Published Wednesday 12 August 2026

Table of contents

• What are payroll records?
• What do payroll records include?
• Why payroll records matter
• How long must you keep payroll records in South Africa?
• South African payroll compliance basics
• How to store and manage payroll records
• Keep your payroll records in order with Xero
• FAQs on payroll records
• Related terms
• Learn more about payroll records

Key takeaways

• Payroll records are documents that track employee pay and how it was calculated, including payslips, tax certificates, and SARS submissions.
• SARS requires you to keep tax records for at least five years, while the Basic Conditions of Employment Act requires employment records to be kept for three years; where a record falls under both, keep it for five years.
• South African employers must comply with PAYE, UIF (2% total contribution) and SDL (1% when payroll exceeds R500,000), and submit monthly EMP201 returns and twice-yearly EMP501 reconciliations along with IRP5 certificates for each employee.
• Under POPIA, you must store payroll records securely and take reasonable measures to protect employees' personal information such as ID numbers, tax numbers and bank details.

What are payroll records?

Payroll records are documents that show each employee's pay and how it was calculated. You can keep them on paper or store them electronically.

What do payroll records include?

Payroll records cover a range of information about your employees' earnings and deductions. Here's what you should keep:

• pay rates and hours worked
• leave and paid time off
• bonuses and allowances
• benefit contributions (for example, retirement or medical aid)
• deductions (PAYE tax, UIF, and any personal contributions)
• net (take-home) pay and payment details
• employee tax details such as their income tax number
• payslips and IRP5/IT3(a) certificates
• EMP201 and EMP501 submissions
• employment contracts

Why payroll records matter

Accurate payroll records protect your business and your employees. They help you meet your employer responsibilities and support good business practices.

• SARS and UIF compliance and audits
• resolving pay or leave disputes
• proof of employment and correct payments

How long must you keep payroll records in South Africa?

SARS requires you to keep records for at least five years from the date the return is submitted, as set out in the Tax Administration Act. The Basic Conditions of Employment Act (BCEA) requires employment records to be kept for three years from the date of the last entry.

Where a record is both a tax and an employment record (for example, payslips), you should keep it for the longer period. In practice, this means holding most payroll records for five years.

South African payroll compliance basics

When you run payroll in South Africa, you need to understand several statutory obligations. Managing payroll for your small business means staying on top of key SARS requirements.

• PAYE: tax you withhold from employees' pay and pay over to SARS
• Unemployment Insurance Fund (UIF): a total contribution of 2% (1% from the employee and 1% from the employer)
• Skills development levy (SDL): 1% of total pay, applicable when your payroll is expected to be more than R500,000 over the next 12 months; this is an employer cost and is not deducted from employees
• EMP201: a monthly declaration for PAYE, SDL and UIF, due within seven days after the end of the month (if that day is a weekend or public holiday, pay on the last business day before it)
• EMP501: an employer reconciliation submitted twice a year (an interim and an annual submission)
• IRP5/IT3(a): the tax certificate you issue to each employee showing pay earned and tax deducted; you must submit employer declarations to SARS

How to store and manage payroll records

You have several options for storing payroll records, and choosing the right method helps keep your information secure and accessible. Good small business bookkeeping practices include maintaining organised payroll files.

• paper records stored in a secure, fireproof location
• digital records saved on encrypted drives or cloud storage with regular backups
• payroll software that automates record-keeping and stores data securely

Under POPIA (Protection of Personal Information Act), you must take reasonable measures to protect employees' personal information such as ID numbers, tax numbers and bank details. If managing records becomes too time-consuming, you can outsource your payroll to a trusted provider.

Keep your payroll records in order with Xero

Xero payroll helps you keep accurate, compliant records in one place. You can calculate pay, track leave, and store employee information securely. Stay on top of your SARS submissions and get one month free.

FAQs on payroll records

Here are answers to common questions about payroll records in South Africa.

How long must payroll records be kept in South Africa?

Keep payroll records for at least five years to satisfy both SARS tax requirements and employment law obligations under the BCEA.

What payroll records does SARS require?

SARS requires records of employee earnings, PAYE deductions, UIF and SDL contributions, EMP201 and EMP501 submissions, and IRP5 certificates issued to employees.

Can payroll records be kept electronically?

Yes, SARS accepts electronic records as long as they are accurate, complete, and stored securely with proper backups.

Do small businesses need to keep payroll records?

Yes, all employers in South Africa must keep payroll records regardless of business size. This applies from your first employee.

What is the difference between EMP201 and EMP501?

EMP201 is a monthly declaration of PAYE, UIF and SDL due to SARS. EMP501 is a reconciliation submitted twice a year that confirms the totals declared match the IRP5 certificates issued.

Related terms

• Payslip
• Income tax

Learn more about payroll records

• How to hire employees
• How to record accounting transactions
• Small business monthly checklist