A statutory deduction is an amount the law obliges an employer to withhold from an employee's pay and account for. It is compulsory, unlike a voluntary deduction such as a savings amount or a loan repayment that the employee opts into.
What it means
The core statutory deductions on a payslip are PAYE and the employee's 1% UIF contribution. They are withheld whether or not the employee consents, and the employer pays them over to SARS. SDL is related but is an employer charge, not a deduction from the employee, and OID is funded entirely by the employer.
Where it fits in
Statutory deductions come off gross remuneration in the pay run and are declared on the monthly EMP201. Because the employer withholds them on SARS's behalf, it is liable for them even if it fails to deduct - which is why the calculation has to be right every period.
Key rules
- Required by law, withheld regardless of the employee's consent.
- PAYE and the employee's UIF are the main ones on a payslip.
- SDL and OID are related statutory charges but are employer-funded, not employee deductions.
- Declared on the EMP201, with the employer liable for any under-deduction.
