Cost of Absenteeism in South Africa: How to Calculate It

The Short Answer

The cost of absenteeism is the pay for days not worked, plus what you pay to cover the work, plus the management time each absence takes. The first part is easy: daily cost of an employee x days lost. At a 3% absence rate that is about 3% of payroll. The other two parts depend on your operation and should be priced from your own overtime, agency and time records.

Nationally, Occupational Care South Africa (OCSA) estimated in 2017 that absenteeism costs the South African economy R16 billion a year (SA People, 2017). The Public Service Commission recorded R10.2 billion in sick leave costs for national and provincial departments in 2023 (PSC, 2025, Table 14).

Published South African Cost Figures

Few South African sources put a Rand figure on absenteeism. These are the ones we could trace.

• R16 billion a year, national estimate. OCSA, 2017 (SA People). A 2022 article attributes a range of R12 billion to R16 billion to OCSA (FA News). Neither article gives the method behind the estimate.
• R10.2 billion, public service sick leave, 2023. The PSC report gives the cost of sick leave as R8.0 billion in 2020, R8.2 billion in 2021, R11.6 billion in 2022 and R10.2 billion in 2023. That is the salary paid for sick leave days across about 1.68 million employees on PERSAL (PSC, 2025, Tables 12 and 14).
• 2.93% of total cost of employment, one teaching hospital. A University of Cape Town study of 3,543 staff at a South African tertiary hospital from 2017 to 2019 found a sickness absence rate of 2.63% and a direct cost of 2.93% of total cost of employment, about US$618 a year per employee who took sick leave (Khan, 2022). Cost as a share of pay was higher than the absence rate because higher-paid staff cost more per day absent.

All three measure direct cost: pay for days not worked. None of them prices overtime, agency staff or lost output. For absence rates by sector and how they are measured, see our article on average absenteeism rates in South Africa.

Why the Leave Liability Figure Is Not the Cost

Payroll systems often report a leave liability: the value of leave that employees have accrued but not yet taken. That is a balance sheet figure for annual leave. It does not tell you what sick leave or unplanned absence cost you this year. Sick leave under the BCEA does not accrue as a payable balance, so it is not in that figure at all.

To cost absenteeism, start from the absence that happened: the days, who took them, and what each day cost.

Step 1: Count the Days Lost

Decide which absence types you are costing and keep that definition fixed. Most organisations start with sick leave, then add unpaid or unauthorised absence as a separate line. Annual leave, maternity and parental leave and other planned leave are usually excluded, because the business plans for them.

Count working days lost, not calendar days. A sick note from Friday to Monday is two working days for a Monday to Friday employee. For shift workers, count the scheduled shifts missed.

Also count spells: separate absences, however long. A three-day absence is one spell. You need spells in Step 4, because management time is spent per absence, not per day. If you want the absence rate as well, divide days lost by scheduled working days. The free absenteeism rate calculator does this.

Step 2: Work Out the Direct Cost

Under BCEA s22(2), an employee is entitled to paid sick leave equal to the days they would normally work in six weeks, in each 36-month cycle. In the first six months of employment it is one paid day for every 26 days worked (s22(3); BCEA). Our guide to sick leave in South Africa covers the rules in detail. The pay for those days is the direct cost.

Daily cost = monthly cost to company x 12 ÷ working days in the year

Direct cost = days lost x daily cost

• Use cost to company, not basic salary, if you want the full cost. Employer contributions such as pension or provident fund, medical aid subsidies, UIF and SDL continue while an employee is on paid sick leave.
• Working days in the year. About 250 for a Monday to Friday employee once public holidays are removed. For a six-day week, use about 300. For shift workers, use the shifts each person is scheduled to work in a year.
• One average or individual rates. A single company average is quick. Calculating per employee or per pay band is more accurate, because absence rates and pay differ between groups. In the UCT hospital study, non-clinical staff had a higher absence rate than clinical staff, and staff earning under R250,000 a year had the highest rate (Khan, 2022).
• Unpaid absence. If an employee has exhausted sick leave, or is absent without permission and not paid, there is no wage cost for that day. There may still be a cover cost.

A useful check: because the daily cost comes from payroll, the direct cost as a share of payroll equals the absence rate. A 3% absence rate costs about 3% of payroll. If someone gives you a direct cost figure far from that, ask how it was calculated.

Step 3: Add the Cost of Cover

When the work cannot wait, someone else does it, and you pay twice: once for the absent employee's sick leave and again for the cover. Where the work waits or is spread across the team without extra pay, there is no cash cover cost, though there may be a cost in output or service levels (see the section on other effects below).

Overtime at BCEA rates

For employees covered by the overtime provisions of the BCEA:

• Overtime rate: at least 1.5 times the employee's normal wage (s10(2)). By agreement, the employer can give paid time off instead, at the same ratio (s10(3)).
• Limits: overtime only by agreement, and no more than 3 hours a day or 10 hours a week (s10(1)). A collective agreement or sectoral determination can vary this. In practice, a full nine-hour shift of cover usually has to be split across several colleagues.
• Sundays: double the normal wage, or 1.5 times if the employee ordinarily works on Sundays (s16).
• Public holidays: at least double the normal wage for work on a public holiday (s18).
• Earnings threshold: these sections do not apply to employees who earn more than the threshold set under s6(3). From 1 April 2025 the threshold is R261,748.45 a year (Fasken, 2025). Check for a later determination. Overtime terms for employees above the threshold are whatever their contract says.

Overtime is calculated on the hourly wage of the person doing the cover, not the person who is absent. For a monthly-paid employee, a common method is monthly pay ÷ 4.333 weeks ÷ ordinary weekly hours (BCEA s35 sets out how wages are calculated by reference to ordinary hours). Some employers have agreed overtime rates above the legal minimum; use what you actually pay.

Agency, relief and casual staff

Use what you actually pay: the agency's invoiced rate per shift, or the daily rate of relief and casual staff. We did not find a published source for typical South African agency mark-ups, so we do not quote one. Your invoices are the only reliable figure.

How to estimate it

The best source is your overtime and agency records, matched to the absences that caused them. If you cannot match them, estimate the share of absence days that needed paid cover and the average cost of one day of cover. The cost of absenteeism calculator takes both as inputs.

Step 4: Add Management Time

Each spell of absence takes time: a supervisor rearranges work, someone captures the leave, HR checks the medical certificate, and a manager may hold a return-to-work interview. This is time paid for and not spent on other work.

Management time cost = spells x hours per spell x hourly cost of the people involved

We did not find a South African study that measures how long this takes. Estimate it from your own process: list the steps for one ordinary absence, note who does each, and time them over a few weeks. Count spells, not days, because most of this work happens once per absence.

Step 5: Describe the Other Effects

Absence also affects output, service levels, deadlines, quality, safety and the workload of the people who are present. Over time, staff who repeatedly cover for others may become tired or leave. These effects are real but vary widely between workplaces, and we found no South African source that converts them into a reliable general figure.

Many articles add a fixed multiplier for indirect costs, such as "indirect costs are twice the direct cost". We do not recommend this unless you have measured it in your own operation. A made-up multiplier makes the total look larger and makes it easier for a finance team to dismiss the whole figure. Report these effects next to the Rand figure, in words, with any numbers you do have (for example, missed production targets or overtime hours worked by the same people month after month).

Worked Example (Illustrative Figures)

The figures below are invented to show the method. Use your own data.

A company has 150 employees with an average cost to company of R32,000 a month. Annual payroll is 150 x R32,000 x 12 = R57,600,000. Employees work a Monday to Friday week, about 250 working days a year.

Notes on the assumptions:

• Of the 1,575 sick days, 300 were in roles that had to be covered on the day: 200 with overtime and 100 with agency staff. The other 1,275 days were absorbed by the team or the work waited.
• The covering staff earn R18,000 a month, below the BCEA earnings threshold, so s10 applies. Each nine-hour shift was covered by three colleagues working 3 hours of overtime each, within the s10(1) daily limit. None of the cover fell on a Sunday or public holiday.
• The 2.25 days per spell is taken from the UCT hospital study (Khan, 2022). Use your own spell count if you have it.
• 45 minutes of management time per spell at a blended R400 an hour is an assumption for the example, not a measured figure.

Result: about R3.03 million a year, or 5.3% of payroll and about R20,190 per employee. The direct cost alone is R2.42 million, which is 4.2% of payroll, the same as the absence rate. Cover and management time add about R609,000, a quarter of the direct cost in this example. In your organisation that share could be much higher or close to zero, depending on how much work has to be covered on the day.

Lost output and the other effects in Step 5 are not in this total. Report them alongside it.

Which Part of the Cost Can You Reduce?

Not all absence can or should be reduced. Employees are entitled to paid sick leave, and most absence is genuine illness. The useful question is which part of your absence is avoidable, and what drives it. Break the cost down before you act:

• By department and site. A company total hides where the cost sits. A department with a high rate and a lot of overtime cover costs more per day than one where the work can wait.
• Frequency or duration. Many short spells call for return-to-work conversations and a look at timing, such as Monday and Friday absence patterns. A few long absences usually mean illness or injury, managed through support and, if needed, an incapacity process. See incapacity versus misconduct.
• Individual employees. Frequent short absences by a few people can drive a large share of cover cost. A pattern is a reason to have a conversation, not proof of misconduct.

Practical steps are covered in our guide on how to reduce absenteeism.

Dispute Costs

Absence that is managed inconsistently can end in a dismissal dispute, which brings legal fees, management time at the CCMA or bargaining council, and possibly compensation. Under LRA s194(1), compensation for a dismissal that is unfair because the reason or procedure was unfair may not exceed 12 months' remuneration. The cap is 24 months only for an automatically unfair dismissal (s194(3); LRA). Most absence-related dismissals fall under the 12-month cap. Our page on South African labour law and absenteeism explains the procedures. We do not include dispute costs in the worked example because they are irregular; if you have had disputes, record their actual cost separately.

Frequently Asked Questions

Where Appsentia Fits

Appsentia calculates the direct cost of sick leave: sick days multiplied by your company's average daily salary. It shows the days and cost by department and employee, from leave data you upload from Excel or CSV or sync from PaySpace, alongside absence rates, risk scores and pattern flags. It does not calculate overtime, agency or management time costs; add those from your own records using the method above. See what Appsentia analyses and pricing.

Sources

1. SA People (September 2017). Absentees costing South Africa R16 billion each year (OCSA figures).
2. FA News (3 August 2022). The true cost of absenteeism in the workplace and how gap cover can prevent it (OCSA range of R12 billion to R16 billion).
3. Public Service Commission (February 2025). Report on the Utilisation of Categories of Leave in the Public Service: Facts, Observations and Recommendations. Tables 12 and 14.
4. Khan, M.A. (2022). The burden and cost of sickness absenteeism amongst healthcare workers at a teaching hospital in South Africa. MPH dissertation, University of Cape Town.
5. Basic Conditions of Employment Act 75 of 1997, sections 6, 10, 16, 18, 22 and 35.
6. Labour Relations Act 66 of 1995, section 194.
7. Fasken (March 2025). New earnings threshold under the Basic Conditions of Employment Act.

This article is general information, not legal or financial advice. Check the current Act, your sectoral determination or bargaining council agreement, and your own payroll records before relying on any figure.