UIF 101


by Lia Marus

The Unemployment Insurance Fund (UIF) provides short-term relief for workers when they become unemployed or can’t work because they are ill, need to go on maternity leave or have just adopted a child. It even goes beyond this by paying relief to the dependents of contributors who’ve died. Read on to discover more interesting facts about UIF.

Must all employees contribute to the UIF?

No, only those who work 24 hours or more per month and domestic workers must contribute to the UIF.  These employees don’t have to contribute to the fund:

People who work less than 24 hours per month,

  • Public servants,
  • Someone who is employed on a learnership,
  • People who only earn commission only, and
  • Those who enter SA to take up a learnership, apprenticeship or job offer (i.e. if it wasn’t for one of these three, they wouldn’t have come to SA) and  have to leave the country when the work period expires

Must all employers contribute to the UIF?

Yes, if you employ any person and in return pay them in cash or in kind. As an employer, it is your responsibility to register your business and deduct UIF contributions from your employees’ remuneration. If you don’t do this, you will heavily penalised either with a:

  • A fine,
  • A prison term for up to 12 months, or
  • Both.

    What is remuneration?

    Remuneration is the money an employee receives from an employer, e.g. in cash or in kind (housing, food, etc.). This includes overtime and bonuses. You must base your employees’ UIF contributions on all the remuneration you give him. All allowances – such as travel, food and accommodation allowances – are also remuneration.

 

How much must you contribute to the UIF?

You must contribute the amount equal to 1% of your employees’ monthly remuneration and you must deduct 1% off his monthly remuneration. You must pay both of these amounts to the UIF. For example:

Joe employs John. John earns R1 000 per month. Joe must deduct 1% of the R1 000, which is R10, which he will pay to the UIF, and he must also pay R10 for John to this fund. This means that on a monthly basis, John pays to the UIF for John (R10 from his salary and R10 on Joe’s behalf.)

When must you pay contributions to the UIF?

You must pay your employee’s contributions to the UIF before the seventh day of every month. If the seventh day is not a business day, you must make your payments on or before the last business day that is before the seventh day. If you are registered for tax purposes and/or the Skills Development Levy (SDL) you must pay your contributions to SARS. If you aren’t, you must pay your contributions to the fund.

How does the UIF know who sent the contributions?

The fund has established an employer/employee database where all the employment details of every SA employee are stored. As an employer, it is your responsibility to send the details of all your staff members to the fund to update the database on a monthly basis or when there is a change in their details.  This database is maintained so that when an employee becomes unemployed, the UIF can quickly process an application for relief.

How can you send your workers’ information to the fund?

1.    Send the information manually (via the UI-19 form) to the fund if you don’t have an electronic payroll system. Follow this link to download it.

2.    Commercial employers who have electronic payroll systems can send their information todeclarations@uif.gov.za.

This article first appeared on HR Pulse.

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