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).
The Unemployment Insurance Act and Unemployment Insurance Contributions Act apply to all employers and workers, but not to –
- workers working less than 24 hours a month for an employer;
- public servants;
- foreigners working on contract;
- Employees in receipt of an old age pension are, since 07/2/2007, no longer excluded from contributing towards UIF; or
- workers who only earn commission.
Domestic employers and their workers are included under the Act since 1 April 2003.
UIF Contributions Payable
The 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%.
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.
Workers 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.
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 do UIF
Employers may not –
- deduct more than 1%;
- deduct outstanding amounts when they fall behind with payments; and may not
- ask a fee for deducting the money.
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
UIF Payment of Contributions
Employers 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.
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 Contribution Act
More Information on UIF
- Can I claim UIF online?
- Check UIF Status
- What is the maximum UIF payment?
- When can you claim UIF?
- Can I claim UIF if I resigned?
- Who must pay UIF?
- How long does UIF take to pay out after signing?
- Does UIF pay lump sum?
- Do directors pay UIF?
- Why is my UIF claim rejected?
- Can I claim UIF if I retire South Africa?
- Are you allowed to resign with immediate effect?
- Can I claim UIF if my husband died?
- How much UIF will I receive?
- Is UIF taxable?
- Is UIF calculated on gross or basic salary?
- How long does maternity benefit take to process?
- How many months does UIF pay for maternity leave?
- How is UIF calculated?
- What happens to my UIF contributions if I resign?
- What forms are needed to claim UIF?
- How do I register for UIF?
- What is the retirement age in South Africa?
- Does UIF expire?
- Is UIF calculated before or after tax?
- Is UIF paid on overtime?
- Does bonus have UIF?
- When should I apply for maternity pay?
- How does maternity leave pay work?
- Can I claim UIF after 2 years?