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Working in Johannesburg
Find out how to get a job and work in Johannesburg
The dream of working in the economic heart of the powerful Gauteng province not only attracts many South African citizens from other provinces: working in Johannesburg can also be a wise career step for expatriates! Our guide gives you a quick overview of Joburg’s economy.
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Employment in Johannesburg
A Look at the Economy
While the zenith of the gold mining times in the Johannesburg area is over — gold was the main reason behind the city’s founding in the first place — the people working in Johannesburg have managed to preserve the city’s leading position within the South African economy. Johannesburg and its province Gauteng are the largest contributors to the national GDP and the largest clusters of formal employment in South Africa. For many people in other South African provinces, trying to get a job in Johannesburg is a very feasible option.
Johannesburg today shares many common traits with other modern expat magnets around the world, with its services and trade heavy economy and a powerful financial sector. Johannesburg is also an important center for South Africa’s IT, media, and broadcasting sectors. Nonetheless, mining and manufacturing still play a large role in the city’s economy. Furthermore, heavy industries such as concrete and steel are among the major employers of the city.
Sandton — The Economic Heart of Johannesburg
While you might expect that the economic heart of the city and the main focal point of people working in Johannesburg is the city center, it is actually the suburb of Sandton to the north of the city that is the main driving force behind the metro region’s economy. After the economic downturn in the mid-1990s and the urban blight that directly affected companies working in Johannesburg’s Central Business District (CBD), many closed their shops and relocated to Sandton. Astonishingly, the JSE Securities Exchange, Johannesburg’s stock exchange, was among the businesses to relocate.
Today, Sandton is home to some of the most prestigious offices in the entire metro area, and many multinationals opt for a Sandton-based operation. Another mainstay of Sandton’s economy is being the home of one of Africa’s largest shopping malls, Sandton City. The suburb’s name is well-known even to those who are not even working in Johannesburg: as a major convention center, it is the host of businesspeople working in a variety of different sectors. Needless to say that the many luxurious hotels are among those that profit from this fact.
Economic Challenges for Johannesburg
We have already covered the immense problem of unemployment in the entire nation in our article on working in South Africa. In Gauteng, the unemployment rate was around 30% in the fourth quarter of 2014. The social and economic issues that arise through this lamentable fact are very obvious.
Among the biggest challenges both for the population and the city administration is the immense size of the informal sector, which has been described as one of the largest worldwide. The problems of this sector are manifold: trying to abolish or criminalize it is absolutely not an option, as a huge number of people depend on the income generated by this cash-only sector which mainly focuses on street vendor activities and unskilled labor. The city and its economy simply cannot provide enough jobs that the many unskilled laborers could fill. Still, the city administration has included the creation of 5 million jobs until 2020 in their Integrated Development Plan.
At the same time, while a portion of the revenue generated in the informal sector also flows back into the formal sector, there is a loss of tax revenue Johannesburg could use to further improve its infrastructure and public housing situation. Another problem is the fact that working in Johannesburg’s vast informal sector is not a particularly sustainable source of income. However, for better or worse, the informal sector secures the livelihood of a large part of the city’s population.
Opportunities for Expats
Another challenge which is not limited to Johannesburg, but affects all of South Africa, is brain drain. Highly qualified personnel with years of training and/or experience, often gained outside of South Africa, frequently see no point in working in Johannesburg when they could just as well make a more than comfortable living abroad. This leads to a lack of skilled professionals in key positions.
However, brain drain is also the largest source of opportunities for expats in Johannesburg. With the right set of skills and a convincing CV, you should not face too much adversity on your road towards working in Johannesburg, an experience that will no doubt pay off.
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Expat Business Info Johannesburg
As we have already highlighted in part one of this article, the demand for qualified personnel from abroad is high in all of South Africa, and Johannesburg as a large business hub is no exception in this regard. Thus, you can start looking for job offers directed at expats using a South African job portal of choice, a quick internet search will yield more than enough results here. Alternatively, you can check whether or not your company has offices in Johannesburg — the chances are not too bad!
Once you have found a company that is interested in hiring you, you should look into the matter of acquiring a work permit for South Africa. We have listed a number of expat-relevant permits in our article on moving to Johannesburg.
You have found an employer and secured your permit? Congratulations! Now it is high time to get an overview on how much of your hard-earned money will actually show up on your account. In other words: time to find out about South African taxation.
The system you will be taxed under when working in Joburg is relatively straightforward and not unlike those in many other expat hotspots. In South Africa, every resident has to pay income tax. Expatriates are treated as residents — in the context of taxation — as soon as they spend at least 183 days in a given tax year in South Africa, making the country their ordinary residence. If you are present for less than 183 days per year, but more than 90 days for six years in a row, you will also be taxed as a resident.
The tax year begins on the first of March. The tax you owe is calculated based on a system of income levels. Income below 181,900 ZAR per year is taxed at a flat rate of 18%. Everything exceeding this lower threshold is divided up into six income levels which are taxed a fixed sum plus a percentage of the amount you earn in excess of 181,900 ZAR.
The South African Revenue Service offers a comprehensive website covering every possible aspect of taxation in exhausting detail — recommended reading for every expat. Alternatively to looking after this somewhat unpleasant aspect of working abroad yourself, you can of course hire the services of one of the many tax advisors. Ask your employer for a recommendation.
Social Security Contributions
Social security contributions are the second notable deduction from your paycheck, albeit a fairly small one, as the South African government and employers are the main contributors to the social security scheme. 1% of your paycheck is subtracted from your monthly earnings by your employer and is directed into the unemployment fund. The monthly maximum of contributions you will have to pay is currently at around 148.72 ZAR. Seeing how you are probably not eligible to make use of social security services — those are limited to South African citizens and permanent residents — and with only very few social security agreements between South Africa and other nations existing, you will not benefit from your contributions. However, with the low rates and the annual cap, we are sure that most expat salaries should be able to balance this loss out.
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