COIDA Letter of Good Standing

What is a COIDA Letter of Good Standing?

A Letter of Good Standing is an official letter that proves you are COIDA registered and up-to-date with your payments to the Compensation Fund.

For more info on COIDA Letter of Good Standing, view some of the main questions most business owners ask below.

You can download WAs2 – Registration of an Employer form, which is used to register with COIDA here.

The reason why Tenders and Contracts so often require you to have a COIDA Letter of Good Standing is simply to make sure you’re taking full responsibility of your employees and to make sure you’re authorised to operate legally.

If you’re not COIDA registered or you’re not in good standing with the Compensation Fund, your employees aren’t covered by the Compensation Fund in the case of any work-related accidents in terms of medical expenses or compensation in the case of permanent injury or death.

Read our A step-by-step guide to getting a Letter of Good Standing (so you can win those Tenders!)

No, a business must be registered with the Compensation Fund before a letter of good standing can be obtained.

A COIDA certifcate and a COIDA Letter of Good Standing is one and the same, and refers to the same document from the department of labour.

Lets refresh our minds of how we can acquire a COIDA letter of good standing.

Once an employer has successfully registered with COIDA, they will receive a CF registration number from the Department of Labour, which serves as their unique identifier within the COID system.

This number is essential for various purposes, including submitting Return of Earnings (ROE) forms and making contributions to the Compensation Fund.

Once the employer has succesfully submitted their Return of Earnings and made the required payments as set out in the Assessment fees, a Letter of Good Standing at COID can be requested.

In very simple terms you can see the annual COIDA assessment fees as your business “insurance premium” should any of your staff be injured whilst on duty.

COIDA assessment fees are contributions that employers are required to make to the Compensation Fund based on the nature of their business operations and the associated risks. These fees help to fund the Compensation Fund, which provides compensation to workers who are injured or contract occupational diseases as a result of their work.

The assessment fee for each employer is calculated using the following formula:

Assessment fee = total workers’ pay ÷ 100 x assessment tariff

What this means:

Total workers’ pay is the total annual payroll of all employees of the employer which has been listed on the Return of Earnings.

Assessment tariff is the rate at which the employer is required to contribute to the Compensation Fund, based on the industry and risk category of their business. A construction business will have a higher risk factor compared to a normal office based business, as an example.

What factors affect the assessment tariff?

The assessment tariff is determined by the following factors:

1. Industry: Employers are classified into one of over a hundred subclasses, each with its own assessment tariff. Industries with higher levels of risk have higher assessment tariffs.
2. Accident costs: An employer’s assessment tariff may be increased if their accident costs are higher than others in the same subclass.
3. Conversely, an employer’s assessment tariff may be reduced if their accident costs are lower than others in the same subclass.

Make use of our Free Return of Earnings Calculator to determine your estimated minimum payment.

A person or organisation in good standing is regarded as having complied with all their explicit obligations.

Read our Guide on a Letter of Good Standing to provide more indepth information.

Here are the prerequisites, as an employer or business owner, to getting a COIDA Letter of Good Standing – and the correlating legislation:

• You have to be registered with the Compensation Fund – section 80 of the COID Act. We can assist you to Register with COIDA.
• You have to be up-to-date with your Return of Earnings submissions – section 82 0f the COID Act. We can assist you with your Return of Earnings Submissions.
• You must be fully assessed by the Compensation Fund in terms of your payable amount – section 83 of the COID Act. We can assist.
• You have to be up-to-date with your due payments – section 86 of the COID Act. We can assist.
• Please note: If you have an installment arrangement to pay your assessment fee on a month‐to‐month basis, you can only receive a COIDA Letter of Good Standing that’s valid and renewable on a month‐to‐month basis.

We can assist with a COIDA Letter of Good Standing, COIDA Registration and your COIDA Return of Earnings Submissions and Payments to COIDA – contact us toll free on 0800 007 269.

Yes, you must register all of your employees for COIDA, regardless of whether they are casual or permanent staff. The Compensation for Occupational Injuries and Diseases Act (COIDA) states that all employers who employ one or more employees must register with the Compensation Fund. This includes casual workers, temporary workers, and contractors.

There are a number of reasons why you should register all of your employees for COIDA irrespective of the legal requirements:

1. 1. To protect your employees: COIDA provides compensation to workers who are injured or contract occupational diseases as a result of their work. This includes medical expenses, temporary or permanent disability benefits, and death benefits for dependents.
   2. To comply with the law: Failure to register your employees for COIDA is a criminal offense. You could be fined or even imprisoned for not complying with the law.
   3. To avoid personal liability: If an employee is injured or contracts an occupational disease and you have not registered them for COIDA, you could be held personally liable for their compensation.

To register your employees for COIDA, you will need to complete a COIDA registration form (WC2 form) and submit it to the Compensation Fund. If you want more information on the process you can read more about COIDA Registration here.

You can view our COIDA Letter of Good Standing brochure here.

Yes, your Letter of Good Standing from COIDA, needs to be renewed every year. This should take place before the end of April. It doesnt matter on which date you applied for the Letter of Good Standing, it still needs to be renewed before the end of April.

This serves as proof that you are compliant with workmens comp at all times.

You will need to have the below documents to apply for your Letter of Good Standing:

• A Valid COID Registration with the Compensation Fund – as you will need your CF number for the application.
• No outstanding monies owing to the Compensation Fund. Meaning your Return of Earnings submissions must be up to date.
• All Assessment fees are fully paid. The Compensation fund will issue you with assessment fees each year, which must be paid before you can apply.

The cost to obtain a Letter of Good Standing in South Africa includes the payment of your annual COIDA assessments. This will differ from business to business depending on your assessment fees. The Letter of Good Standing Application fees start at R990.

Any outstanding balances must be cleared. The exact fees can vary; Company Partners offers a transparent pricing structure to help manage these expenses.

It’s advisable to renew your Letter of Good Standing annually before it expires (April every year), especially if you frequently tender for government contracts. Company Partners can help track your renewal dates and ensure your business remains compliant through our professional and secure online portal.

If your application is denied, Company Partners will help identify the reasons for the rejection, assist in rectifying any issues, and resubmit your application. Our dedicated team of experts ensures that your business meets all necessary compliance requirements to secure your Letter of Good Standing.

We send a team to the actual COIDA offices to get clarity in complex matters.

The most common mistakes we see are:

1. incomplete documentation.
2. Outdated business information (remember your information is verified),
3. Inflated estimated salary figures

At Company Partners, we ensure that your application is error-free by reviewing your documentation before submission. This is important to ensure it is up-to-date, increasing your chances of success. 

To obtain a Letter of Good Standing from the Labour Department, ensure your business is registered with COIDA, and all assessment fees are up-to-date.

You can apply through the Department of Labour’s online portal or let Company Partners streamline the process for you, ensuring a swift and efficient service.

Once issued, your Letter of Good Standing can be downloaded from the Department of Labour’s online system.

Alternatively, if you’re working with Company Partners, we manage the download of the certificate. It is then sent to you electronically and securely stored on your Online Profile with us. This allows you to access it from anywhere in the world at anytime.

A letter of good standing issued by the Department of Labour confirms that your business is in good standing with the departement regarding your Return of Earnings, assessment fees and registration. This document is normally required for contracts or tenders, especially in the construction and security industry.

Whereas, COIDA is the legislation which regulates the above and COIDA registration, an Employers obligations and the rights of employees. 

Your COIDA Letter of Good Stadning (some refer to this as their COIDA Certificate) is provided by the Department of Labour, more specifically the Compensation Fund which is a division of the Department of Labour.

A letter of good standing issued by the Department of Labour is valid for 12 months or from the issue date until April the next year. Granted no payment plan is in place between the Employer and the Department of Labour

Should a payment plan be in place, a letter of good standing would only be valid for a month. Thus, a new letter of good standing will have to be requested after each installment is paid.