Female household headship is generally associated with higher poverty incidence relative to male headship. Female headship has generally been on the increase in South Africa. And while generally declining over the post-apartheid period, poverty has increased in the recent past. South Africa also has high unemployment rates. However, there is scant evidence on the role of employment in mediating the relationship between female headship and poverty in South Africa. Using South Africa’s National Income Dynamics Study dataset, we find that female headship is positively associated with complete household non-employment, while the latter is positively associated with poverty. However, female-headed households (FHHs) are heterogeneous in nature, and the importance of employment in eradicating the poverty differential between FHHs and male-headed households (MHHs) depends on employment-related household structure. While employment generally eradicates the poverty differential between FHHs and MHHs, FHHs where only women are employed are very vulnerable to poverty.