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Basic Guide to UIF Contributions
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Employers must pay unemployment insurance contributions of 2% of the value of each worker’s pay per month. The employer and the worker each contribute 1%. Contributions are paid to the Unemployment Insurance Fund (UIF) or the South African Revenue Services (SARS). ApplicationThe Unemployment Insurance Act and Unmployment
Insurance Contributions Act apply to all
employers and workers, but not to -
Domestic employers and their workers are included under the Act since 1 April 2003. See
Contributions PayableThe contribution that employers must deduct from a worker's pay is
1% of the worker's total earnings, excluding commission.
In addition to the 1% deducted from the worker, the employer also
contributes 1% for every worker that they employ.
The total contribution paid to the UIF is therefore 2%.
Example:
If a worker earns R1 000 per month, the employer must deduct 1%,
namely R10. In addition, the emloyer must pay R10 for that worker. The
total of R20 must therefore be paid to the UIF or SARS.
Earnings CeilingWorkers who earn more than the annual, montly or weekly maximum earnings ceiling must also contribute to the Fund, but their contributions are worked out on the maximum earnings ceiling.
Example: If a worker earns R10 000 per month and the monthly earning ceiling is R1 096 per month, the worker's contribution will be worked out on R8 836. What employers may not doEmployers may not –
If employers deduct too much money by accident, they must pay the extra money back to workers. Based on Legislation in Section 6 and Section 7 of the Unemployment Insurance Contributions Act Payment of ContributionsEmployers must pay the 1% they deducted from workers, together
with the 1% they have contributed, to the UIF or SARS before the 7th of
every month.
Example:
Contributions due for January, must reach the UIF or SARS on or
before 7 February.
If the 7th day of a month is not a business day, employers must
pay on or before the last business day before the 7th. "Business day"
means any day that is not a Saturday, Sunday or Public Holiday.
Based on Legislation in Section 8, Section 9, of the Unemployment Insurance Contributions Act Related Links
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