What this guide covers: everything under Payroll → Employee readiness. We'll set up one example employee, Thandiwe Mokoena, a permanent farmhand at a fictional operation, Karoo Valley Farm (Pty) Ltd, from nothing to fully ready for her first pay run. Real field values in the examples below are illustrative — use your own employee's real details.
Part ABefore you start: add the person
Payroll doesn't have its own "add employee" button. A person has to already exist as an Employee record in the People module first — that's where you capture their name, contact details and job title. Once that record exists, they automatically show up in Payroll → Employee readiness, ready for the payroll-specific setup below.
Finding your way around Employee readiness
Open Payroll → Employee readiness to see every employee, searchable by name, filterable by All statuses / Active / Inactive. Each row shows a chip per section — for a brand-new employee you'll see something like "Compensation: Missing" in warning colour across every section.
Click into an employee to open their detail page. Instead of tabs, you'll see a vertical stack of section cards — Engagement, terms and determinations, Compensation, Payroll profile, Recurring components, and Statutory and filing identity — each with its own status, blockers, and history. At the top of the page is an Add setup dropdown listing every setup step you're currently allowed to perform. That's the button you'll use for every step below.
Step 1 — Engagement
Click Add setup → Create engagement. This tells Payroll what kind of working relationship this is.
| Field | What to enter |
|---|---|
| Engagement type | Employee, contractor, director, or freelancer. |
| Started at | The date the engagement began. |
| Employment type | Permanent full-time, permanent part-time, fixed-term, temporary, casual, seasonal, director, independent contractor, freelancer, or other. |
| Tax country | Defaults to ZA (South Africa). |
| Tax residency status | Whether they're a South African tax resident. |
| Ordinary hours / work days per week | Their normal working pattern. |
Engagement type: Employee. Started at: 1 September 2026. Employment type: Permanent full-time. Tax country: ZA. Tax residency status: Resident. Ordinary hours per week: 45. Work days per week: 5.
Step 2 — Statutory classification
Click Add setup → Add statutory classification. This is where you tell Payroll which South African legal rules apply to this person — it drives UIF, minimum wage checks, and what actually appears on their payslip.
| Field | What it means |
|---|---|
| Classification | Standard employment, deemed standard employment, non-standard employment, independent contractor, labour broker, or other. |
| UIF contribution determination | Whether UIF applies to this person. |
| NMW applicability status | Whether National Minimum Wage rules apply, or an exemption reason. |
| Payslip legal regime status | Which South African wage regime governs their payslip: za_sd13_farm_worker (Sectoral Determination 13 — the Farm Worker Sector rules) or za_bcea_general (the general Basic Conditions of Employment Act regime). |
Classification: Standard employment. UIF contribution determination: Contributes. NMW applicability status: Applies. Payslip legal regime status: za_sd13_farm_worker, because Karoo Valley Farm is an agricultural employer and Thandiwe is a farm worker.
Step 3 — Compensation
Click Add setup → Add compensation version. This is the actual pay rate.
| Field | What to enter |
|---|---|
| Effective from | The date this rate starts applying. |
| Basis | Monthly salary, weekly salary, daily, hourly, piece rate, commission only, director fee, or contractor fee. |
| Base amount & currency | The rate itself, in ZAR. |
| Ordinary hours per week | Used to work out hourly-equivalent rates. |
| Change reason | Required from the second compensation record onward — why the rate changed. |
Effective from: 1 September 2026. Basis: Monthly salary. Base amount: R 6 500.00. Currency: ZAR. Ordinary hours per week: 45.
Giving someone a raise later doesn't overwrite this record — you add a new compensation version with a later Effective from date and a Change reason (for example, "Annual increase"). The old rate is kept for history and for correctly recalculating any period it actually applied to.
Part FStep 4 — Payroll profile (non-sensitive)
Click Add setup → Update masked payroll profile for everyday banking and benefit membership flags.
Bank name: Capitec Bank. Bank branch code: 470010. Bank account type: Savings. Retirement fund member: No. Medical aid member: No.
Step 5 — Sensitive profile (Owner only)
Click Add setup → Update sensitive payroll profile. This step captures the genuinely sensitive numbers — tax reference number, bank account number, retirement fund number, and medical aid number. Every one of these fields is rendered password-masked as you type, and stored encrypted on the server. This action is restricted to your Owner account by default — if you're an Admin and don't see it, that's expected (see Payroll Overview — Part E).
Tax reference number: entered by the Owner, masked on screen as it's typed. Bank account
number: same. Once saved, both show elsewhere in Payroll only in masked form (e.g.
••••••1234) unless someone with the right permission clicks Reveal
sensitive profile.
Step 6 — Filing identity
Click Add setup → Add filing identity. This is the identity information SARS needs — required before you can generate this employee's IRP5/IT3(a) certificate (see Statutory Returns & ETI).
| Field | What to enter |
|---|---|
| Nature of person | A SARS code: A (South African individual), B, M, N or R — use A for a standard local employee. |
| ID number / Passport number | Their South African ID number, or a passport number + issuing country for a foreign national. There's also an alternate ID type for asylum seekers/refugees. |
| Address block | Full work, residential and postal addresses. |
Nature of person: A. ID number: her 13-digit South African ID number. Residential and work address: the farm's registered address, since she lives on-site.
Optional steps
These only apply in specific situations — skip them if they don't apply to your employee:
- ETI classification & wage measure — only if you intend to claim the Employment Tax Incentive for this employee (typically younger or lower-paid qualifying employees). See Statutory Returns & ETI — Part C.
- Recurring component — for a regular earning or deduction outside of basic pay, e.g. a fixed monthly housing allowance or a garnishee deduction. Choose a Calculation mode of Fixed amount or Percentage (of Basic or Gross earnings).
- Tax directive, opening balance, in-kind valuation, and similar advanced actions only appear when they're relevant (e.g. migrating an employee mid-tax-year from another payroll system, or valuing a benefit like housing supplied in kind). Consult your payroll administrator or accountant before using these — see Corrections & Terminations for the related termination/retro tools.
Troubleshooting & FAQ
I can't find "Add employee" anywhere in Payroll.
That's expected — add the person in the People module first (Part A). They'll appear automatically in Employee readiness.
Why can't I add the tax reference number or bank account number myself as an Admin?
Those fields are deliberately restricted to the Owner. It's a safeguard so that no single day-to-day operator can both handle and later reveal an employee's most sensitive personal data unsupervised. Ask your Owner to complete Part G.
I made a typo in a field I already saved — how do I fix it?
Add the same setup step again with the corrected value and a later effective date. The old record is kept, not deleted, which is what makes Payroll's audit trail trustworthy.
My employee still shows blockers even though I think I've done everything.
Open their readiness page and read the blocker text on each section card directly — it names the exact missing fact (e.g. "no active compensation record"). It's always more precise than guessing from the section name alone.