How much does payroll outsourcing cost in South Africa?

For small businesses in South Africa, fully managed payroll typically ranges from R80 to R150 per payslip per month, with a small monthly base fee. Pricing depends on frequency, number of employees, and whether SARS submissions (EMP201, EMP501, IRP5s) and UIF declarations are included.

Is it cheaper to run payroll in-house or outsource it?

Once you add software licences, training, staff time, and the risk of SARS penalties, outsourcing is usually cheaper for employers under 30 staff. A fixed monthly fee replaces multiple variable costs and removes single-person-dependency risk.

What are the hidden costs of DIY payroll software?

Beyond the monthly licence, DIY payroll carries the cost of admin hours, annual PAYE/UIF/SDL rate updates, EMP501 reconciliations, SARS penalty exposure (10% of PAYE plus interest), and the productivity lost when the person who ‘knows payroll’ is on leave.

South Africa · 2026 pricing

The real cost of payroll outsourcing in South Africa

"How much does payroll cost?" is the wrong question. The right one is: what does payroll cost me once SARS penalties, licences, admin hours and key-person risk are on the table? Here is what South African employers actually pay in 2026 — and where the hidden costs sit.

Typical 2026 pricing at a glance

Model	Monthly cost (10 staff)	What's included
DIY software (Sage / SimplePay)	R450 – R900 licence + ~8 admin hrs @ R250 = R2,000	Software only. You run payroll, SARS submissions and UIF filings.
Bureau / part-managed	R900 – R1,500	Payslips run for you. SARS/UIF often extra or DIY.
Fully managed (Patuza)	R1,200 – R1,800	Payslips, EMP201, EMP501, IRP5s, UIF, SDL, queries — one fee.

Indicative 2026 prices for a South African employer with 10 monthly-paid staff. Prices vary by frequency, complexity and whether directives/terminations are involved.

The hidden costs of DIY payroll

SARS penalties. Late EMP201 = 10% of PAYE + interest. One missed month wipes out a year of licence savings.
EMP501 reconciliations. Twice a year. A mis-mapped source code (3601 vs 3605 vs 3901) causes IRP5 rejections and employee tax pain.
Key-person risk. When "the person who does payroll" resigns or takes leave, salaries still need to run on the 25th.
Annual rate changes. PAYE brackets, UIF ceiling, medical credits and retirement caps change every March. Missing an update quietly under- or over-taxes staff for months.
Terminations & directives. Severance, notice pay, leave pay-out and IRP3(a) directives — one wrong source code turns into a SARS assessment.

Total cost of ownership — worked example

10-employee retail business, monthly pay cycle

DIY software licence: R700
Bookkeeper time (8 hrs @ R250): R2,000
SARS penalty risk (1 late EMP201 per year, averaged): ~R800/month
Annual EMP501 & IRP5 prep (averaged): ~R400/month

True DIY cost ≈ R3,900/month. Fully managed at R1,500 replaces all four lines and removes the risk.

What "fully managed" should include

Monthly / weekly / fortnightly payslips
PAYE, UIF, SDL calculations
EMP201 filing every month
EMP501 bi-annual reconciliation
IRP5 / IT3(a) issuing
UIF declarations + UI-19s
New hires, terminations, directives
SARS & DoL query handling

Get a fixed monthly quote for your headcount

Send us your headcount, pay frequency and any terminations coming up. We'll come back with a fixed monthly fee — no surprises, no per-query billing.

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Related guides

Payroll options in South Africa →
In-house vs outsourced vs hybrid — compliance and cost tradeoffs.
Sage vs SimplePay vs Patuza →
Feature-by-feature comparison of the main SA payroll options.
PAYE calculator (2025/2026) →
Interactive PAYE calc using the current SARS tables.
Severance pay calculation →
BCEA formula, SARS lump-sum tax and an interactive calculator.

General pricing indication based on typical South African market rates at publication. Not a formal quotation. Contact Patuza for a fixed monthly fee tailored to your business.