Employment Law
Minimum Wage and Sectoral Determinations
The National Minimum Wage Act established a statutory floor below which no employee in South Africa may be paid. Paying below the minimum wage is not a civil matter. It is a criminal offence. There is no exception for small businesses, no grace period for new employers, and no defence of ignorance.
The Act applies to all workers and their employers except members of the South African National Defence Force, the National Intelligence Agency, and the South African Secret Service. Every other employer, including households employing domestic workers, is bound by it.
The Current Rate
From 1 March 2026, the national minimum wage is R30.23 per ordinary hour worked, up from R28.79 in 2025. This is a 5% increase, in line with the National Minimum Wage Commission's recommendation of CPI plus 1.5%.
The rate is expressed as an hourly amount and applies to ordinary hours only. For a full-time employee working 45 hours per week, the minimum weekly pay is R30.23 x 45 = R1 360.35. The monthly equivalent is approximately R5 893 (R1 360.35 x 4.333).
The rate changes every 1 March. Always verify the current rate at www.labour.gov.za before setting any wages. Relying on a figure from a previous year is a compliance risk that costs money to correct.
The NMW cannot be varied by contract, collective agreement, or any other arrangement. It is also an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the NMW — meaning you cannot reduce an employee's hours to lower their weekly pay while keeping the hourly rate technically compliant.
Who the Rate Applies To
The national minimum wage applies to full-time, part-time, casual, temporary, and fixed-term employees. It is not limited to permanent staff. A casual worker employed for a single day must be paid at least R30.23 per hour for every hour worked.
Domestic workers and farm workers are now fully aligned with the national rate at R30.23 per hour. This alignment happened in 2024, closing a gap that previously existed between these sectors and the general workforce. Any household or farm that previously relied on a lower domestic or agricultural rate needs to have updated its wages accordingly.
Learners under registered learnership agreements (in terms of section 17 of the Skills Development Act) receive weekly allowances rather than an hourly rate. These allowances are structured by NQF level and credits earned, ranging from R455 to R2 654 per week for 2026. Check Schedule 2 of the Government Gazette for the applicable allowance for your learner's NQF level and credit status.
Expanded Public Works Programme workers receive R16.62 per hour — a separate, lower rate applicable only to government-funded public works projects. This does not apply to private sector employers.
Sectoral Determinations
Certain sectors have minimum wages set by sectoral determinations that may be higher than the national minimum wage in specific areas or job categories. Where a sectoral determination applies and sets a higher rate, the sectoral rate overrides the national minimum.
Contract Cleaning Sector: The minimum hourly rate for metropolitan areas (Area A) is R33.27 per hour from 1 March 2026 — materially higher than the national rate. Area B and Area C rates are lower but still have their own minimums. If you employ cleaning staff, verify which area classification applies to your workplace before setting wages.
Wholesale and Retail Sector: Minimum rates are differentiated by job category and geographic area. The lowest job category in the least expensive area is aligned with the national minimum wage at R30.23 per hour, but higher categories attract higher minimums. Check the full schedule in Government Gazette No. 554075 (3 February 2026) for the rate applicable to each employee's job category.
Private Security Sector: The sectoral determination sets rates above the national minimum wage for most security grades. Area A (metropolitan) rates are significantly higher than R30.23.
Hospitality, taxi, and forestry sectors have existing sectoral determinations whose current status should be verified directly with the Department of Employment and Labour, as the National Minimum Wage Commission noted uncertainty about whether these determinations remain fully in effect.
The practical rule: before setting wages for any employee, identify whether a sectoral determination applies to your industry and area. Where it does and sets a higher rate, that rate applies. Where no sectoral determination applies, the national minimum wage of R30.23 applies.
Overtime and Premium Rates
The minimum wage is the base for all premium rate calculations. Premium rates cannot bring an employee's effective hourly earnings below the minimum — they are additions to it, not substitutes for it.
Overtime must be paid at 1.5 times the ordinary rate. For an employee on the minimum wage: R30.23 x 1.5 = R45.35 per overtime hour.
Sunday work that is not an ordinary working day must be paid at double the ordinary rate. For a minimum wage employee: R30.23 x 2 = R60.46 per hour. If Sunday is an ordinary working day for that employee, overtime rates (1.5 times) apply instead.
Public holiday work attracts double the ordinary rate if the public holiday falls on a day that is not an ordinary working day. If it falls on an ordinary working day, the employee is entitled to the public holiday at full pay, plus pay for the hours worked — effectively double pay, or a paid day off for not working.
Tips and gratuities in the hospitality sector may not be counted toward the minimum wage. An employer in hospitality must pay at least R30.23 per hour regardless of tips received by the employee.
Accommodation deductions for live-in domestic workers are capped at 10% of the wage. This is the only permissible deduction related to accommodation and cannot be used to bring effective pay below the minimum.
The Exemption Mechanism
The Department of Employment and Labour operates an exemption system for employers who genuinely cannot afford the prescribed minimum wage. An employer may apply for a temporary exemption allowing payment below the national minimum wage for a defined period.
In 2025, the Department received 103 exemption applications. The process is formal, requires evidence of financial incapacity, and results in a time-limited determination. It is not a blanket escape from the Act — it is a structured relief mechanism for businesses in genuine financial difficulty.
If you believe your business cannot sustain the current minimum wage, contact the Department of Employment and Labour before paying below the rate, not after. Paying below the minimum without an approved exemption is a criminal offence regardless of financial circumstances.
Enforcement and Penalties
Labour inspectors from the Department of Employment and Labour have powers to enter any workplace without prior notice, inspect wage records, and issue compliance orders. An employer who fails to comply with a compliance order can be fined. Employees may also report underpayment to the Department by calling 0800 030 007 (toll-free), visiting their nearest labour centre, or filing a complaint online. Reports may be made anonymously.
Employers found to have underpaid face penalties of up to twice the underpaid amount. An employee who has been underpaid may also refer the matter to the CCMA for resolution.
The National Minimum Wage Commission has noted that compliance remains a major challenge, particularly in sectors with high informality such as agriculture and domestic work. Enforcement activity is increasing. The Commission's 2026 report specifically flagged a Non-Compliance Workshop planned for 2026 as part of a drive to address the gap between the legal standard and actual payment practice.
Record-Keeping Obligations
Every employer must keep accurate records of hours worked and wages paid for every employee. These records must be retained for at least three years and produced on demand from a labour inspector.
Paper timesheets that can be retrospectively amended are a compliance risk. Where hours are disputed, the burden of proof falls on the employer to demonstrate that the correct hours were recorded and the correct wages paid. Verbal agreements and foreman recollections are not adequate records.
For businesses with multiple sites or shift workers, time-tracking that captures the worker, location, and time creates a defensible compliance record. The investment in accurate time-tracking is small relative to the cost of a compliance order or CCMA award.
Practical Checklist for Employers
Before 1 March each year, work through the following:
- Verify the new national minimum wage rate at www.labour.gov.za
- Check whether a sectoral determination applies to your industry and area
- Identify the applicable rate for each job category in your workforce
- Update payroll to reflect the new rate from 1 March
- Recalculate overtime, Sunday, and public holiday rates based on the new ordinary rate
- Verify that no deductions from pay bring effective wages below the minimum
- Confirm that accommodation deductions for live-in domestic workers do not exceed 10%
- Retain updated payroll records for at least three years
Common Mistakes Worth Avoiding
Using last year's rate after 1 March. The rate changes annually. A payroll system that is not updated from 1 March is immediately non-compliant.
Assuming domestic and farm worker rates are still lower. They aligned with the national rate in 2024. Employers still paying a discounted domestic or agricultural rate are underpaying.
Not checking sectoral determinations. The national minimum wage is the floor for employers without a sectoral determination. Where a sectoral determination applies and sets a higher rate, it is the legal minimum for that industry.
Reducing hours to lower the weekly wage while keeping the hourly rate compliant. This is explicitly prohibited as an unfair labour practice under the NMW Act.
Counting tips toward minimum wage compliance in hospitality. Tips do not count. The R30.23 per hour must be paid regardless of gratuities received.
Not applying for a formal exemption before paying below the minimum. Financial difficulty does not automatically excuse underpayment. The exemption process exists for this purpose and must be used before the underpayment occurs, not after.
This article provides general information about the National Minimum Wage as at 1 March 2026. The rate changes annually on 1 March. Verify the current rate and any applicable sectoral determination at www.labour.gov.za before setting wages.
This article provides general information about South African business law and regulation. It is not legal, tax, or financial advice. Laws and regulations change — verify current requirements with a qualified professional or directly with the relevant authority before making decisions.