Non-Profit Company (NPC) · PAYE & Payroll

PAYE & Payroll for Non-Profit Companies in South Africa

Name: Accounter
Author: Accounter

Last updated: 2026-03-19

Non-Profit Companies that employ staff have the same PAYE and payroll obligations as any other employer. PBO status does not exempt an NPC from PAYE — employee income tax must be deducted and paid to SARS regardless of the employer's tax-exempt status. This is a common misconception among new NPC founders.

NPC payroll often involves unique considerations. Many NPCs employ a mix of salaried staff, contract workers, and volunteers. Volunteers who receive stipends or allowances may trigger PAYE obligations if the stipend exceeds nominal amounts or if SARS considers it remuneration. Director fees paid to NPC directors are also subject to PAYE.

NPCs must register for UIF and SDL like any other employer. The SDL exemption for payrolls below R500,000 per year is particularly relevant to small NPCs with limited staff. NPCs can also claim the Employment Tax Incentive (ETI) for qualifying young employees, reducing their PAYE liability.

Key Requirements

PAYE registration if any remuneration is paid
UIF registration for all employees
SDL registration if payroll exceeds R500,000/year
COIDA registration
Volunteer stipend policy to clarify PAYE treatment
Monthly EMP201 submissions

Important Deadlines

EMP201: 7th of the following month
EMP501: April/May and October
UIF contributions: 7th of the following month

Fees & Costs

PAYE registrationFree
Payroll software (NPC/non-profit plans)R200–R800/month

Non-Compliance Penalties

Late EMP201: 10% penalty on amount due
PBO status does not protect from PAYE penalties
Director personal liability for payroll non-compliance

Frequently Asked Questions

Does PBO status exempt an NPC from PAYE?

No. PBO status exempts the NPC from income tax on approved activities, but PAYE is an employee tax that must be deducted from staff salaries regardless of the employer's tax status. The NPC must register for PAYE and submit monthly returns like any employer.

Are volunteer stipends subject to PAYE?

It depends on the nature and amount. True volunteer stipends that reimburse out-of-pocket expenses (transport, meals) are generally not taxable. However, regular stipends that are effectively compensation for services may be treated as remuneration by SARS. Keep stipend policies clearly documented.

Can an NPC pay its directors?

Yes, but the MOI should authorise director remuneration, and it must be reasonable. NPC directors are not paid dividends or profit shares, but they can receive fees for services rendered. These fees are subject to PAYE or treated as independent contractor income depending on the engagement.

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