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Working in Cape Town
Find out how to get a job and work in Cape Town
As in the rest of the country, expats in Cape Town are in for a treat. Not only are the chances of scoring a great position very high due to the unfortunate brain drain in the city, but you will also reap the benefits of being employed at the Cape Town offices of national and multinational giants.
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Employment in Cape Town
Cape Town is really getting its name out into the world. Gigantic events such as the FIFA World Cup 2010 and the city’s recent nomination as World Design Capital 2014 have not only created buzz for the city, but they have also contributed to making Cape Town an attractive option for large numbers of expats. Apart from relocating to the city’s eternal competition — Johannesburg — working in Cape Town is probably what most people have in mind when they think of being an expat in South Africa.
The Local Economic Profile
Working in the Western Cape is almost synonymous to working in Cape Town, the undisputed economic powerhouse of the region. The vast majority of non-agricultural business is concentrated in the Mother City, as Capetonians often call their hometown.
As in most other major cities in developed countries, being employed in Cape Town mostly means having an office job. Finance, insurance, real estate and office services are the most important contributors to the city’s economy. These growth sectors, along with construction and communication/ICT, amongst others, are leading factors for the good reputation the city — and those working in it — enjoy.
On a smaller scale, the city has also profited from the rising globalization and the outsourcing of company departments such as call centers. Many support lines from large global players are now answered by people working in Cape Town.
Founded in order to establish a seaport in Southern Africa, the city still makes a large share of its profits from foreign trade. If you have ever enjoyed a glass of the world famous wines from the Western Cape region, you can be sure that the vintage has been handled by companies from Cape Town. Needless to say that the servicing and upkeep of ships is also an important aspect of the seaport.
Tourism is another major economic pillar for the city and its province, giving thousands employed at Cape Town’s hotels, restaurants, and tourist attractions a secure workplace.
The Film Industry in Cape Town
International film crews love working in Cape Town. The efforts of the Cape Film Commission have made the city a popular backdrop for various large foreign film and TV productions, proving time and again that shooting in Cape Town meets even the highest standards. The film industry’s contribution to the city’s economy was about 5.5 billion ZAR in 2012, a more than respectable share. Another side effect which is more than welcome was, due to the heightened interest in the city as a filming location, well over 10,000 people have found jobs working in Cape Town’s film industry or related sectors.
The Unemployment Problem
A very worrisome side effect of the great attractiveness of the city and the prospects finding work there right away is widespread unemployment. South Africa is experiencing a population shift; more and more people leave the rural countryside behind and follow their hopes of a better life into the large cities. However, the dream of working in Cape Town or any of the other magnets goes unfulfilled for many, further aggravating the dire situation in the poorer parts of town. Being unemployed here often means living in extreme poverty — with a daily budget of less than 1.25 USD.
Brain Drain — It Gives Expats Opportunities
With the Western Cape being back on track economically and showing signs of growth in many sectors, there is great demand for highly qualified expats in Cape Town. This is due to widespread brain drain, both in the region and the entire country: to many highly skilled locals, getting a job in Cape Town does not sound as appealing as going overseas in hopes of better pay.
Some of the nation’s most pressing and obvious issues, such as widespread crime and health issues like HIV/AIDS, are further factors contributing to brain drain, and sometimes also intimidating expats interested in working in Cape Town. Often, the fear is unfounded: as we have pointed out in our articles on Cape Town and South Africa in general, things are not as bad as they may appear to be, and being an expat in Cape Town might just turn out to be the time of your life!
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Cape Town: Jobs, Social Security, Taxes
The Job Search and Business Contacts
If you are not among those expats who go to Cape Town for an intra-company transfer, your job search will begin where it usually would these days: the Internet. There are countless online job portals for South Africa, many of which also have a local focus on Cape Town, for example, Jobsin Cape Town. Your search engine of choice should produce satisfactory results here.
We’ve already written about the place and importance of existing business contacts for a successful expat career working in South Africa: you can probably do without. In fact, the lack of networking and inter-company contacts is one of the more lamented facts of the business world in Cape Town. Several initiatives have been taken by institutions and communities such as Connect’d to combat this situation.
However, these efforts did not change much in terms of how the job hunt in Cape Town is tackled. In contrast to, for example, the USA, businesses in Cape Town and South Africa in general cannot rely on the slim chance of finding apt personnel solely through the so-called hidden job market. Brain drain continues to be a serious problem, and oftentimes, expats have to be recruited to fill positions, as suitable candidates can be scarce.
Some of the temporary residency permits for expats we have discussed in our article on moving to Cape Town reflect this state of affairs. In a few special cases, you can even enter South Africa and look for work in Cape Town yourself, on location, without having to deal with the — often long-winded — task of looking for work in another country via the Internet. Your personal qualifications and experience are the decisive factors here, as only individuals of particular expertise are granted this advantage.
A Look into the Social Security System
During your time as an expat in Cape Town, you have to make contributions to South Africa’s social security system. These contributions are automatically deducted from your monthly paycheck by your employer.
The South African social security system and its various schemes and programs are predominantly funded by the government and employers. The only program employees contribute to directly is the unemployment fund, and the deductions from their earnings are quite modest: 1% of an employee’s salary, capped at 148.72 ZAR monthly.
With that said, most expats will probably be able to live with the fact that they will not be seeing much of their contributions. None of the temporary residency permits available to expats make you eligible to receive any benefits of the South African social security system. Furthermore, South Africa has only very few social security agreements with other nations. Most probably, you will not receive anything for any contributions you make during your stay in Cape Town.
Paying Taxes as an Expat
As an expat in Cape Town, you will be considered a resident for tax purposes, provided you are physically present in South Africa for at least 91 days in the tax year, which starts on the first of March.
The total sum of taxes you have to pay obviously depends on your salary. The South African Revenue Service distinguishes between six income categories or levels. While the first level, which is income of up to 165,600 ZAR, is taxed on a flat rate of 18%, the other categories are taxed a fixed sum plus a certain percentage of the amount you earn in excess of the lower threshold of your income category.
This might sound a lot more complicated than it actually is. Consider this example: if you earn 400,000 ZAR a year, you are placed firmly in the fourth category, which spans incomes from 393,201 to 550,100 ZAR. The fixed tax sum for this category is 93,135 ZAR for the tax year starting 1 March 2015. In addition to that, you have to pay 35% of the amount your earnings exceed 393,201 ZAR
For a detailed compilation of all tax categories for the current tax year, see the website of YourTax.
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