Calling someone an independent contractor in the contract settles nothing. I built a checker that runs the actual tests, and the thing that surprised me while building it is that there are four of them, and they can legitimately land on different sides.
SARS’s two statutory tests come first, and they’re conclusive. If the work is required to happen mainly at the client’s premises AND the worker is subject to anyone’s control or supervision as to how they work or what hours, they’re deemed not to be independent and PAYE must come off. Except that’s overridden by the second test: employ three or more full-time people all year, none of them relatives, and you’re deemed independent regardless of everything else.
Then the common law grid. SARS publishes 22 indicators in Annexure C of Interpretation Note 17, sorted into three weight tiers. Almost every article on this treats it as a checklist you tick. It isn’t. The near-conclusive tier (who picks the tools, is the pay for effort or for a result, can they send someone else, can they take other clients, who carries the risk of bad work) is close to decisive. The bottom tier (labels, clauses, benefits, registrations) is the one SARS explicitly warns is easiest to dress up, which is exactly why a contract can read beautifully while the relationship underneath it doesn’t. So the tool weights a near-conclusive indicator five times as heavily as a bottom-tier one, and it warns you when your near-conclusive answers point the opposite way to your overall score. A case that only holds together on the bottom tier is the one most likely to fall over.
If you invoice through your own Pty Ltd, different rules again. The personal service provider rules look straight through the company. More than 80% of your service income from one client is enough on its own, and then the client withholds 27% off every single invoice (45% if it’s a trust), and the company loses almost all its ordinary business deductions and can’t use the small business rates either. There is an affidavit that stops the withholding, but only where the 80% rule is the sole reason you’re caught.
And running completely separately from all of that, labour law. Section 200A of the LRA presumes employment if any ONE of seven factors is present, whatever the contract calls the person, and it’s the employer who has to disprove it at the CCMA. It’s only available at or below the BCEA earnings threshold, R269,600.90 from 1 May 2026.
The detail I think is genuinely worth knowing: IRP5 code 3601 versus 3616. If someone is caught by the statutory test but is genuinely independent at common law, the code has to be 3616. Code it 3601 by mistake and section 23(m) shuts down their business deductions, which usually costs the worker considerably more than the withholding itself does. Two digits, and almost nobody checks them.
The tool also prices what getting it wrong costs an employer: the employees’ tax that should have come off, the flat 10% penalty, and the unpaid UIF on both sides.
It’s general information built from Interpretation Notes 17 and 35, the Fourth Schedule and section 200A, not tax or legal advice. It deliberately doesn’t compute the interest, since that depends on the actual payment dates on your account. I’d be interested to hear from anyone who’s been through a SARS audit or a CCMA referral on this, whether the near-conclusive indicators were in fact what it turned on, or whether something else did the damage.