To pay yourself a salary from your own company you must register the company as an employer with SARS within 21 business days of the first payment, deduct PAYE and UIF, issue yourself a payslip each month, submit an EMP201 by the 7th, and issue yourself an IRP5 through the EMP501 reconciliation. A one-person company paying its director is an employer with exactly the same obligations as a business with thirty staff.
The alternative most owners default to — transferring money as needed and calling it drawings — is not a salary, does not avoid tax, and creates a loan account with its own consequences.
Why this matters more than it looks
Drawings are not a salary. A transfer from the company account to your personal account, with no payroll behind it, is not remuneration. It is a loan from the company to you.
That creates a debit loan account, which can trigger a deemed dividend under section 64E and 20% dividends tax, measured against the official rate of 7.75% per annum from 1 December 2025.
It also means no IRP5, which makes proving your income to a bank considerably harder, and it means no retirement fund deduction, because contributions are deductible against remuneration.
See what is a director's loan account.
Step 1: register as an employer
The trigger is the first payment of remuneration on which employees' tax is deductible — including to yourself.
The deadline is 21 business days from becoming an employer.
What to register for:
| Registration | Applies |
|---|---|
| PAYE | Always, where remuneration is above the threshold |
| UIF | Generally, though see the exclusion below |
| SDL | Only where total annual remuneration exceeds R500,000 |
The UIF point for sole directors. Employees working fewer than 24 hours a month are excluded from UIF, and certain other exclusions exist. A working director drawing a monthly salary is normally included. Where you are the only person in the company, confirm the position rather than assuming either way — it is a common source of incorrectly configured payroll.
Full detail in when must you register for PAYE.
Step 2: decide the amount
Three considerations, in order of importance.
It must be commercially reasonable
A salary of R5,000 a month from a company generating R2 million of profit, paired with large dividends, is an arrangement that attracts questions. There is no prescribed minimum, but the amount should bear some relationship to the work you do.
It interacts with the dividends decision
Salary is deductible in the company and taxed at your personal rates. Dividends are paid from after-tax profit and cost 41.6% combined for a standard company.
The practical rule for a non-SBC: draw salary while your marginal rate is below 41.6% — which means up to the 41% bracket starting at R887,001 — then take the balance as dividends.
For a qualifying Small Business Corporation, the maths changes materially, because the first R550,000 of company profit is taxed at 0%, 7% and 21%. Model both. See salary or dividends.
It sets your retirement contribution capacity
Contributions are deductible at 27.5% of the greater of remuneration or taxable income, capped at R430,000 for 2026/27 — up from R350,000, the first adjustment since 2016.
Dividends do not count as remuneration for this purpose. An owner taking only dividends can find their deductible contribution capacity severely limited.
Step 3: run it through payroll, monthly
Every month, on the same date:
Calculate PAYE — annualise, apply the tax table, subtract rebates and medical credits, divide by 12. See how to calculate PAYE
Calculate UIF — 1% employee and 1% employer, capped at R17,712 of monthly remuneration, so a maximum of R177.12 each
Issue yourself a payslip. The BCEA requires written particulars of remuneration for every employee, every pay period. Yes, including you
Pay the net amount to your personal account
Submit the EMP201 by the 7th of the following month, or the last business day before it
Pay SARS using the Payment Reference Number generated with the return
Worked example. A director on R55,000 a month, under 65, no medical aid.
| Amount | |
|---|---|
| Gross salary | R55,000.00 |
| PAYE | (R12,875.58) |
| UIF (1% of R17,712 cap) | (R177.12) |
| Net to you | R41,947.30 |
| Employer UIF | R177.12 |
| Employer SDL (1%, if payroll > R500,000) | R550.00 |
| Total cost to the company | R55,727.12 |
PAYE calculated on the 2026/27 tables: annual R660,000, tax R125,599 + 36% × R129,800 = R172,327, less the R17,820 primary rebate = R154,507, divided by 12.
The deemed remuneration rule
Directors of private companies are subject to a specific anti-avoidance provision.
The problem it addresses: a director who takes nothing during the year and a large amount at year-end, deferring PAYE for eleven months.
How it works, broadly: where a director's actual remuneration is low or irregular, a deemed remuneration amount can be calculated by reference to the previous year's remuneration, and PAYE must be deducted monthly on that deemed amount even where less is actually paid.
The practical answer is simpler than the rule: pay yourself a regular monthly salary. Doing so keeps you outside the awkward part of the provision entirely, and it makes every other part of your financial life easier — bond applications, credit, and proving income.
If your drawings are irregular or you have been taking nothing, get the position reviewed. This is one of the more commonly missed provisions in small company payroll.
Step 4: the annual obligations
Two EMP501 reconciliations a year — an interim one covering March to August, and an annual one after the February year end.
Your own IRP5 flows to SARS through the annual EMP501 and pre-populates your personal income tax return.
Register yourself for income tax if you are not already. From the 202602 reconciliation period, a valid income tax reference number is mandatory on IRP5 certificates, and eFiling and e@syFile reject the whole submission if any employee lacks one. In a one-person company, that one person is you. See EMP501 reconciliation explained.
Non-executive directors are different
A non-executive director's fees are treated differently from an executive director's salary.
SARS has issued Binding General Rulings 40 and 41 dealing with the VAT and PAYE treatment of non-executive directors. Broadly, NED fees are not subject to PAYE, but the NED may have VAT registration obligations in their personal capacity where the fees exceed the threshold.
If you pay non-executive director fees, or receive them, read those rulings rather than applying the executive director treatment.
The five mistakes
1. Taking drawings instead of a salary. Creates a loan account, no IRP5, no retirement deduction, and potential deemed dividend exposure.
2. Not registering for PAYE. The obligation attaches to paying yourself. SARS treats you as having been an employer from the date it arose, so the PAYE becomes payable with interest at 10.25% and penalties.
3. Paying an irregular amount. Triggers the deemed remuneration complexity and makes proving income difficult.
4. No payslip. Required by the BCEA, and it is also the document a bank asks for.
5. Forgetting your own tax number. A one-person company whose director has no income tax reference number cannot submit its EMP501 at all.
Frequently asked questions
How do I pay myself from my own company in South Africa? Register the company as an employer with SARS within 21 business days of the first payment, deduct PAYE and UIF, issue yourself a monthly payslip, submit an EMP201 by the 7th of the following month, and issue yourself an IRP5 through the annual EMP501 reconciliation.
Do I need to register for PAYE if I am the only employee of my own company? Yes. A company paying its director a salary is an employer with the same obligations as any other, including PAYE registration, monthly EMP201 returns and the EMP501 reconciliations.
Can I just take drawings instead of a salary? You can move the money, but it is not a salary. It creates a debit loan account which can trigger a deemed dividend under section 64E and 20% dividends tax, produces no IRP5, and gives you no retirement fund deduction capacity.
How much should I pay myself as a director? It should be commercially reasonable for the work you do. As a tax rule of thumb for a standard company, draw salary while your marginal rate is below the 41.6% combined cost of dividends — which means up to the 41% bracket at R887,001 — then take the balance as dividends. For a qualifying Small Business Corporation, model both, because the answer changes.
Do I have to pay UIF on my own salary as a director? Generally yes where you are a working director drawing a regular monthly salary, at 1% from you and 1% from the company, capped at R17,712 of monthly remuneration. Certain exclusions exist, so confirm your specific position rather than assuming.
What is deemed remuneration for directors? An anti-avoidance provision under which PAYE may have to be deducted monthly on an amount calculated by reference to the previous year's remuneration, where a director's actual remuneration is low or irregular. Paying yourself a regular monthly salary avoids the complication entirely.
Do I need a payslip if I am the only director? Yes. The BCEA requires written particulars of remuneration for every employee each pay period, and a payslip is also what a bank will ask for when you apply for a bond or credit.
Does paying myself a salary help with a home loan? Considerably. Banks understand payslips and IRP5s. Proving income from dividends or drawings requires financial statements, resolutions and a longer conversation, and a consistent salary history over two to three years makes a bond application substantially easier.
Paid properly, monthly
Paying yourself correctly costs a few hundred rand a month in payroll administration and removes a set of problems that are expensive to unwind — a growing loan account, no provable income, no retirement deduction, and a deemed remuneration position nobody has looked at.
Smartbook sets up the employer registration and runs director payroll monthly — payslips, PAYE, UIF, EMP201s and both EMP501 reconciliations. From R750 a month for one to five employees.
Last reviewed: 26 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Figures are for the 2026/27 tax year. Deemed remuneration and UIF inclusion for directors are fact-specific — confirm your own position. Worked examples are illustrative.
Primary sources: SARS — Pay As You Earn · SARS — Budget 2026 Frequently Asked Questions · SARS — FAQs on BGRs 40 and 41 Non-executive Directors · Department of Employment and Labour — BCEA