How to hire and pay contractors in South Africa

How a foreign company hires and pays a contractor in South Africa

Sign a services agreement that buys defined tasks, have the contractor invoice you, and pay into their South African bank account or a wallet. A genuine contractor is not on South African payroll, and they register and pay their own tax with SARS.

With Toku as contractor of record, Toku contracts each contributor, collects their invoices and pays them, and your company buys the labeled data from Toku. For more depth, see the South Africa contractor hiring compliance guide, and for full-time hires, employer of record in South Africa.

Contractor or employee: the seven-factor presumption

Under section 200A of the Labour Relations Act and the matching section 83A of the Basic Conditions of Employment Act, a person who works for or renders services to another is presumed to be an employee, whatever the contract says, if any one of the seven factors listed below applies, until the contrary is proved.

The presumption does not apply to people earning above the threshold, which is R269,600.90 a year from 1 May 2026 (Department of Employment and Labour). Above it, status is still decided on the facts. The Code of Good Practice: Who is an Employee tells courts to look at the dominant impression of the relationship and at its reality over the contract wording.

• the manner of work is subject to the other's control or direction;
• hours of work are subject to the other's control or direction;
• the person forms part of the organisation;
• the person has worked for the other for an average of at least 40 hours a month over the last three months;
• the person is economically dependent on the other;
• the person is provided with tools of trade or work equipment by the other;
• the person works for or renders services to only one person.

Tax registration, invoices and the records you keep

Anyone who receives income other than a salary is a provisional taxpayer, which covers a contractor paid gross by a foreign company (SARS). They make a first provisional payment within six months of the start of the tax year and a second by its end. Individuals above the tax threshold, R99,000 for under-65s in the 2027 tax year, register and file an annual ITR12 return (SARS). Foreign income is declared in rand (SARS).

VAT registration became compulsory above R2.3 million of taxable supplies in any 12 months from 1 April 2026, up from R1 million (SARS). Records are kept for five years from the return's submission (SARS).

What you keep as the payer: the agreement, the contractor's tax reference number, their invoices, accepted-task records and proof of payment. Toku keeps these for every contributor it contracts.

Payment rails, rand and exchange control

South Africa still runs exchange control under the Exchange Control Regulations of 1961. National Treasury published draft Capital Flow Management Regulations in April 2026 to replace them and bring crypto assets within exchange control, and the Reserve Bank's Exchange Control Circular 19/2026 says they remain under review, so they are not in force.

Treasury and the Reserve Bank have said South Africans can already legitimately hold foreign assets under existing exemptions, and that any duty to give up foreign currency or crypto would arise only in limited circumstances (joint statement, May 2026).

In practice: pay contractors in rand or US dollars into their own South African bank account, which handles the cross-border receipt, or in stablecoins to a wallet.

Paying contractors in South Africa in stablecoins

Yes, contractors in South Africa can be paid in stablecoins with Toku. Each contributor can choose USDC or USDT to their own wallet instead of a bank transfer.

The Financial Sector Conduct Authority declared crypto assets a financial product under the FAIS Act in 2022 (FSCA General Notice 1350), so firms that advise on or deal in them are licensed. SARS applies normal income tax rules to crypto, treats paying for services in crypto as a barter transaction, and expects crypto income to be declared in the year it is received (SARS). No Reserve Bank rule stops an individual from holding crypto.

A draft Crypto Asset Manual for cross-border activity would treat transfers into South Africa from non-custodial wallets as not permitted once it is final, so Toku confirms the route for each person. To set it up, talk to us about paying in stablecoins in South Africa.

Making the IP transfer valid in South Africa

Under the Copyright Act 98 of 1978, an assignment, or an exclusive licence, has no effect unless it is in writing signed by or on behalf of the assignor (s.22(3)). A commissioning client automatically owns only commissioned photographs, portraits, gravures, films and sound recordings, and employers own work made under a contract of service (s.21). Text, labels, annotations and code made by a contractor belong to the contractor until assigned.

Because the signature is required by law, the Electronic Communications and Transactions Act accepts only an advanced electronic signature from a process accredited by the South African Accreditation Authority (ss.13(1) and 37). A click, typed name or standard e-signature does not meet s.22(3), so use an accredited advanced e-signature or wet ink.

• Assign future work up front: the Act allows an assignment of future copyright (s.22(5)), so one agreement can cover every task the contributor delivers.
• Spell out the scope: assignments can be limited by acts, term or country (s.22(2)), so state all rights, worldwide, for the full term, including AI and ML training, modification and sublicensing.
• Moral rights to authorship and integrity continue despite an assignment (s.20), so the agreement should say how the work may be edited and whether it is credited.
• Watch the Copyright Amendment Bill: it has not been enacted, and if it is, assignment rules may change.

Pay data labelers in South Africa with Toku

Toku Contributor Payouts contracts each labeler in South Africa as contractor or agent of record, collects the IP assignment with an accredited advanced e-signature or wet ink and pays per accepted task in rand, US dollars, USDC or USDT. You send task totals through the mass payouts API or a file, and every payout ties back to its contributor, agreement and tasks.

Toku pays contractors in 100+ countries. Contractor management lists at $19 per contractor per month on the pricing page, and Contributor Payouts is priced on the contributors you actually pay. The API is documented at docs.toku.com.