How Much Do Tenders Pay In South Africa? Ranges, Rates, And What Affects Your Earnings

If you’ve ever wondered “how much do tenders pay in South Africa?”, you’re not alone. The honest answer: it depends, on the sector, scope, pricing model, your B-BBEE level, where the work happens, and how sharp your costing is. But there are clear patterns you can use to estimate potential earnings before you spend time and money bidding.

In this guide, you’ll get realistic pay ranges, current market trends, and worked examples for common contract types, from municipal cleaning to ICT support and construction. You’ll also learn how payment timing actually works (30-day rules vs reality), what eats your margin, and practical ways to lift your net take‑home. Whether you’re a supplier, SME, or tenderpreneur, this is your playbook to price, plan, and profit, without nasty surprises.

What “Tender Pay” Really Means

When people ask how much tenders pay, they usually mix up a few things:

Contract value: The total maximum amount a department, municipality, or SOE may spend under your contract. A framework/panel might advertise “up to R20 million” over 3 years, but you’ll only bill if you get call‑offs.
Revenue: What you can invoice for delivered goods/services, per BOQ line, milestone, or time-and-materials rate.
Cash flow: When money actually hits your account. On paper it’s 30 days: in practice it can stretch if documents aren’t perfect or the entity has backlogs.
Profit (your real “pay”): Revenue minus direct costs (materials, labor, fuel), overheads (rent, admin, finance costs), compliance (insurance, guarantees, tax clearance), and risk (retention, rework, delays).

So the better question is: what net profit can you earn, by when, and with what risk? That framing will help you compare a R2 million cleaning contract vs a R500k consulting gig with 15% margin, and decide which one is worth your time.

Recent trends you should factor in (2024–2025):

Departments increasingly use panels/frameworks with ceilings, not guarantees. You must compete for each task order.
Price volatility (fuel, bitumen, steel) means more price adjustment clauses, but also stricter escalation mechanics.
Preferential Procurement Regulations (2022) allow organs of state to set specific goals (e.g., township-based suppliers, women/youth-owned). It can influence who wins and the achievable rate.
Payment enforcement has tightened on paper (30-day PFMA/MFMA rule), but practical delays still happen. Good invoicing discipline is money in the bank.

Typical Payment Ranges By Tender Type

Below are realistic revenue and margin ranges you’ll commonly see. Your actual numbers depend on scope, competition, and input prices.

Goods Supply Contracts (Once-Off And Framework)

Range: Once-off deliveries from R50,000 to R5 million+ (e.g., PPE, office furniture, pumps, lab kits). Frameworks can list ceilings of R10–R50 million across multiple suppliers.
Pricing: Unit rates per item, often with delivery, warranties, and local content where designated (valves, steel, buses, etc.).
Margin: 8%–20% gross on standard items: 3%–8% if the item is highly commoditised with many bidders: 15%–25%+ on niche/urgent items with limited suppliers.
Watch-outs: Local content declarations, OEM letters, technical compliance, one missing certificate and you’re out.

Construction And Maintenance Works

Range: Minor works (CIDB 1–3) from R150,000 to R5 million: medium works (CIDB 4–6) R5–R60 million: higher grades (7–9) can run into hundreds of millions.
Pricing: BOQ with standard specs (SANS, COLTO), preliminaries, P&G, and contingencies.
Margin: 6%–12% on competitive small works: 10%–15% on specialised trades: sometimes 3%–6% if underbid and risk is high.
Watch-outs: Retentions (5%–10%), performance guarantees (typically 5% of contract), penalties for delays, and price fluctuation clauses.

Professional And Consulting Services

Range: R250,000 to R10 million+ depending on duration and scope (engineering design, architects, auditors, research, legal).
Pricing: Time-based (per hour/day) using published guidelines (e.g., ECSA) or fixed lump sum with milestones.
Margin: 20%–40% gross if utilisation is high: can drop below 15% if scope creeps without variation approvals.

Facilities, Cleaning, Security, And Guarding

Range: R500,000 to R20 million+ over 12–36 months, depending on sites and shifts.
Pricing: Monthly per site or per guard/cleaner, aligned with sectoral determinations and PSIRA wage structures for security.
Margin: 8%–15% if you manage rosters, absenteeism, and consumables: below 8% if you underprice labor or travel.
Guarding benchmarks: PSIRA-compliant cost per guard hour typically pushes total client charge-out into the R45–R90+ per hour range, varying by grade (C/B/A), region, and shift allowances. Always model night/Sunday/public holiday premiums.

ICT And Software/Support

Range: R300,000 to R30 million+ for support SLAs, licensing, and projects.
Pricing: Mixed models, rate cards, fixed deliverables, or T&M. OEM/reseller margins on licenses are often thin (5%–12%), but services can carry 20%–35% gross.
Watch-outs: OEM partner tiers, compliance, and data sovereignty/POPIA clauses.

Catering, Events, And Training

Range: Small events from R30,000: large conferences/learning programs can exceed R5 million.
Pricing: Per delegate/day, or per deliverable (venue, food, materials, facilitation, assessments).
Margin: 10%–25% if you control venues and suppliers: lower if you chase last-minute logistics or subsidise no-shows.

Factors That Drive Tender Pay Up Or Down

Scope, Complexity, And Risk Allocation

Complex specs, tight tolerances, or high safety risk demand higher rates. If you carry the risk (e.g., design-and-build, turnkey), price for it.
Retention, guarantees, and heavy penalties compress margins, offset with contingency or walk away.

B-BBEE, Local Content, And Set-Asides

Strong B-BBEE level and relevant ownership can boost your evaluation score and win rate. Some entities set minimum levels or goals for local SMMEs.
For designated items, local content is non‑negotiable. Non‑compliance equals disqualification, no matter your price.

Location, Logistics, And Lead Times

Remote or multi-site work adds travel and accommodation. Urgent lead times push up overtime, airfreight, and hire costs.
Fuel price swings hit construction, cleaning, and security hardest, build in a fuel adjustment or realistic buffer.

Competition And Market Benchmarks

Highly contested categories (e.g., standard stationery) race to the bottom on price. Niche technical services hold rate.
Use previous award notices to benchmark. If a municipality paid R65/hour for Grade C guards last year with similar conditions, you’ve got a starting point.

Hidden Costs: Compliance, Insurance, And Statutory Items

Costs you must carry: COID, UIF, PAYE, public liability, professional indemnity (consultants), contractor all‑risk (construction), PSIRA (security).
Don’t forget safety files, inductions, and site PPE.

Hidden Costs: Bid Prep, Site Visits, And Surety Fees

Printing, compulsory briefings, travel, and time spent compiling, these costs are real. Performance guarantees (e.g., 5%) or bid bonds have bank fees.

Hidden Costs: Subcontracting And Supplier Payment Terms

If you must subcontract (or choose to), your margin compresses unless you negotiate firm rates and delivery windows.
Misaligned payment terms can choke cash flow: you pay subs in 15 days but only get paid in 45? Model that financing cost.

Pricing Models You’ll See In SA Tenders

Fixed Lump Sum

One price for defined outputs. Great if scope is locked. Risk: scope creep if change control is weak.

Bill Of Quantities And Unit Rates

Standard in construction and goods. You quote per item/quantity: the final amount is measured work x your rate.
Variation orders adjust quantities: your unit rates need to cover prelims and overheads.

Time-And-Materials / Hourly Rates

Common for consulting and ICT. You bill hours/days plus materials at cost or markup. Client controls scope: you manage utilisation.

Panel/Framework With Rate Cards And Ceilings

You win a spot with approved rates. Work is allocated via mini‑competitions or rotation. Ceiling ≠ guaranteed revenue.

Performance-Based Or Milestone Payments

Paid when you hit milestones (design approval, go‑live) or KPI outcomes (uptime, response times). Helps cash flow if milestones are frequent and realistic.

How Payments Are Made And When You Get Paid

30-Day Payment Rule And Practical Reality

Under PFMA/MFMA frameworks, organs of state should pay valid invoices within 30 days. Many do. Some don’t, especially if documents are incomplete or systems are backlogged.
Practical tip: Ask about average payment days at briefing sessions. Build a cash buffer for 45–60 days just in case.

Advance Payments, Retentions, And Guarantees

Advances are rare but possible for certain projects with bank guarantees. More common are retentions (5%–10%) held until completion or defects liability.
Performance guarantees (often 5% of contract value) tie up credit facilities and have fees, price them in.

Variation Orders, Price Adjustments, And Escalation

Many contracts allow escalation based on CPI or industry indices (fuel, steel). Know the base date and formula before you bid.
Variation orders must be approved in writing before you proceed, verbal promises don’t pay bills.

Invoicing, Supporting Documents, And Common Rejections

Typical pack: signed delivery note or timesheets, tax invoice with correct entity details, CSD number, order number, compliance certificates, and a B-BBEE certificate/affidavit where required.
Rejection reasons: wrong PO, unsigned timesheets, missing proof of delivery, expired tax clearance, or banking detail mismatches.

Estimating Your Potential Earnings From A Tender Notice

Reading The BOQ Or Scope To Size Revenue

Pull quantities into a quick model. Multiply your realistic unit rates by the BOQ and sum by work package.
For panels, estimate call‑off volume using historical spend or the ceiling split across suppliers (e.g., 4 suppliers share R20m → budget 25% best case, 10% base case, 0–5% worst case if allocation favors incumbents).

Estimating Costs, Overheads, And Cash Flow Needs

Direct costs: materials, labor with allowances (overtime, Sundays), fuel, rentals, wastage.
Overheads: admin, finance, audits, compliance, warranties, software tools, site offices.
Cash flow: model payment lag. If you pay weekly wages but get paid monthly+15, your working capital requirement is real, cost it.

Calculating Margin Scenarios (Best, Base, Worst Case)

Best case: full volume, no delays, minimal rework, 30-day payment.
Base case: 80% volume, minor variations, 45-day payment, small cost overruns.
Worst case: 50% volume, rework, 60-day payment, retention held, ensure you still break even or walk.

A simple sanity check: If your price is 15% below the market but your input costs match everyone else’s, where’s the savings? If you can’t articulate it (e.g., better supplier terms), you may be underbidding.

Realistic Pay Ranges: Worked Examples

These examples are illustrative, based on common rates seen by SMEs across SA. Always validate with current wage determinations, OEM pricing, and local conditions.

Municipal Cleaning Contract (12 Months)

Scope: 8 cleaners, 2 supervisors, Monday–Saturday, 2 sites: consumables and basic equipment included.
Revenue: R180,000–R260,000 per month depending on region and scope → R2.16m–R3.12m per year.
Cost drivers: Wages (incl. UIF, PAYE, leave), consumables, equipment amortisation, transport.
Gross margin: 10%–18% if absenteeism is controlled and rosters are tight.
Risks: Public holidays, inflation on chemicals, replacing broken machines.
Tip: Lock in supplier pricing for consumables for at least 6 months and include a CPI adjustment clause.

Security Guarding Panel (Rates Per Grade)

Scope: Panel appointment for Grade C/B/A guards: call‑offs per site.
Typical client charge-out benchmarks (all-in, ex VAT):
Grade C: R45–R70 per hour
Grade B: R55–R80 per hour
Grade A: R65–R90+ per hour
Revenue example: 6 x Grade C guards, 12‑hour shifts, 30 days → ~2,160 hours/month. At R60/hour → R129,600/month.
Margin: 8%–12% if you manage overtime and night/Sunday rates: lower if transport is far or relief staff balloon.
Risks: PSIRA compliance, wage increases mid‑term, sudden site additions without proper variation.

Minor Works Construction Project

Scope: Small civils/maintenance (CIDB 2–3), 12-week program.
Contract value: R1.5m–R4m typical.
Cost drivers: Materials (steel, concrete, aggregates), plant hire, fuel, prelims & generals, site management.
Gross margin: 6%–12% if program is stable: penalties can kill margin quickly.
Tip: Include realistic prelims, weather delays contingency, and confirm price adjustment rules (CPI vs fixed).

ICT Support SLA For A Provincial Department

Scope: End‑user support (onsite + remote), 300 users, 5 days/week, 12 months: includes tickets, patching, and reporting.
Revenue: R220,000–R450,000 per month depending on SLA tiers and whether licensing/resale is included → R2.64m–R5.4m per year.
Pricing model: Rate card + monthly base: milestone penalties if SLA missed.
Margin: Services 20%–30% gross if team utilisation is >75%: license resale 5%–12%.
Tip: Build a ticket deflection plan (self‑service, knowledge base) to protect margin.

Training For 200 Learners With SETA Funding

Scope: Accredited training, materials, assessments, moderation, stipends administered, venue & catering.
Revenue: Often R6,000–R15,000 per learner depending on program length and SETA rates → R1.2m–R3m total.
Margin: 12%–25% if venue and facilitator costs are negotiated early: lower if you carry stipend float.
Risks: Evidence portfolios, moderation timelines, stipend payment lags.
Tip: Use a ring‑fenced account for stipends and agree disbursement schedules in writing.

Ways To Improve Your Net Take-Home From Tenders

Sharpening Costing And Negotiating Inputs

Build a live cost database (fuel, steel, wage rates). Update before every bid.
Get three quotes for major inputs and negotiate delivery windows. Lock in prices with validities matching bid timelines.
Model absenteeism, travel, and downtime explicitly, don’t leave them as “miscellaneous.”

Cash Flow Tools: Invoice Discounting And Purchase Order Funding

If payment runs 45–60 days, consider invoice discounting with reputable financiers. It costs a few percent but can save your operations.
Purchase order funding can cover materials/deposits when you win. Compare fees and ensure PO validity to avoid expensive bridges.

Building Past Performance To Access Better Rates

Start with smaller contracts to rack up completion certificates and reference letters.
Use those to qualify for higher CIDB grades or bigger panels, better grades, better rates, less risk.

When To Walk Away

If risk is one-sided (no escalation, heavy penalties, long payment terms) and price pressure is extreme, protect your business. Rather bid the next opportunity than win a contract that bleeds cash.

A quick litmus test: would you accept this job if payment arrived 20 days late and your input costs rose 5% mid‑term? If no, your bid is too tight.

Conclusion

So, how much do tenders pay in South Africa? The headline numbers range from tens of thousands to many millions, but your real earnings depend on the pricing model, risk, payment timing, and how disciplined you are on costs. For SMEs and suppliers, the sweet spot is often predictable services (cleaning, guarding, ICT support) where you can standardize processes, negotiate inputs, and manage rosters. Construction and goods supply can be lucrative too, if you plan for escalation, verify technical compliance, and protect your cash flow.

If you’re serious about turning tenders into consistent revenue, start where you can win, price with eyes open, and only scale once your delivery engine is humming. Ready to find real, verified opportunities? Visit eTender SA today and discover verified tenders matched to your business, so you can bid smarter and get paid for the work you do.

Frequently Asked Questions

What does “tender pay” actually mean in South Africa?

Tender pay isn’t just the headline contract value. It breaks down into revenue you can invoice, cash flow timing (when money lands), and your real profit after direct costs, overheads, compliance, and risks like retentions or penalties. Focus on net profit, payment timing, and risk to judge true earnings.

How much do tenders pay in South Africa by type?

Ranges vary widely. Goods supply: R50,000–R5m+ once-off; frameworks up to R10–R50m ceilings. Construction: R150k–R60m+ by CIDB grade. Cleaning/security: R500k–R20m+ over 12–36 months. ICT SLAs: R300k–R30m+. Margins typically 6%–12% (construction), 8%–15% (cleaning/security), 20%–35% (ICT services).

When do government tenders actually pay — is the 30‑day rule real?

By PFMA/MFMA, valid invoices should be paid in 30 days, but delays occur with document errors or backlogs. Ask average payment days at briefings, submit complete packs (PO, POD, timesheets, tax clearance, CSD), and model 45–60 days. Build buffers or consider invoice discounting for cash flow.

What profit margin should I target on services like cleaning, security, or ICT?

For those asking how much do tenders pay in South Africa after costs: cleaning/security often land 8%–15% gross if rosters and premiums are managed; ICT services 20%–30% (licenses 5%–12%). Underpricing labor, travel, or SLAs compresses margin. Model night/Sunday rates and utilization before bidding.

How do I find and qualify for government tenders in South Africa?

Register on the Central Supplier Database (CSD), monitor the National Treasury eTender portal and relevant municipal/SOE portals, and ensure required compliance (B‑BBEE affidavit/certificate, tax clearance, CIDB for construction, PSIRA for security, OEM letters where needed). Shortlist by fit, scope, location, and realistic cash‑flow capacity.

Do I charge VAT on government tenders in South Africa?

If you’re VAT‑registered, most supplies to government are standard‑rated at 15%, so you must charge VAT and issue compliant tax invoices. Government entities typically pay VAT; your pricing should state VAT exclusive/ inclusive clearly. Only specific exempt or zero‑rated categories differ—confirm the tax treatment before bidding.