COIDA Return of Earnings

What is Return of Earnings (ROE) and why do I have to submit it to Workman’s Compensation Fund?

All Employees are required by Law to do their COIDA Registration within 7 working days of employment of their first employee. There after, every year on the 31st of March, employers (this includes contractors) are required to submit a Return of Earnings stating the total wage/salary expenditure between March of the former year and February.

The fund then reviews the Return of Earnings and stipulates the amount payable in a Notice of Assessment.

That means you’ll be paying annual assessment fees to the Workman’s Compensation Fund.

Paying your assessment fee will enable you to apply for a COIDA Letter of Good Standing, which is a requirement for Tenders.

We can assist with your COIDA Return of Earnings – contact us toll free on 0800 007 269.

Annual assessment fees/tariffs are the yearly fees any employer has to contribute to the Compensation Fund based on the earnings of his or her employees. This annual amount is also influenced by the type of work these employees do.

Certain professions have a higher risk of occupational injury, death or harm, so the annual contributions will be higher for high-risk versus low-risk employees.

Every year the total cost of the employee-salaries will be reviewed – along with the professions to determine a fair contribution the employer needs to submit to the fund to safeguards his or her employees.

The Department of Labour calculates your Return of Earnings (ROE) using the same formula used for your COIDA assessment fee. Below is the formula:

Company Earnings ÷ 100 × Risk Rate Rate = Assessment Payable to the Department

Here’s how it works:

1. Earnings: This refers to your total payroll for the applicable 12 months.
2. Rate: The rate applied depends on your industry and the level of risk associated with your business activities.

At Company Partners, we’ve seen first-hand how crucial it is for businesses to get this calculation right.

Over the past 90 days alone, we’ve assisted 830 businesses with their ROE submissions.

This shows just how much demand there is for professional guidance in ensuring compliance with COIDA regulations.

There are a few things that could happen depending on how and why you don’t pay the Compensation Fund as an employer. Here they are (plus their correlating legislation):

• Submitting your ROE late: you’ll get a penalty – (Sect 83(2) – 10%)
• Not submitting your ROE at all: you will still get an estimated payment that’s based on an estimate – (Sect 83(6)(a)
• Not paying your assessment: you’ll get a penalty (Sect 87(1) – 10%)
  • You’ll also pay interest on your assessment late payments according to the prevailing prime rate
• Reporting incidents late: you’ll get a penalty
• Not being registered at the Compensation Fund: you’ll get a penalty as soon as an employee, or his or her dependents, claims for an accident/death – (Sect 87(2)(a))
  • In this case, if you don’t provide a fair provision for your employee, or his or her dependents, in the case of a work-related incident you’ll be guilty an offence – Sect 81(3)

The amount payable to the Compensation Fund is called assessments. Do you have to pay the full amount or can you divide it into instalments? Here are the rules:

• You have to make your first payment to the Compensation Fund within 30 days after getting the Notice of Assessment (you get this notice after registering with the fund, submitting your Return of Earnings – your total wage expenses).
• You have to pay at least 20% before asking to pay the rest of the payable amount in monthly instalments.
• If you miss a payment, the full amount is due immediately thereafter.

We can assist with your COIDA assessments – contact us toll free on 0800 007 269.

When you pay your Return of Earnings, then you can renew your COIDA Letter of Good Standing. A valid Letter of Good Standing is a requirement for tender applications and it also proves that your employees are covered in the event of injury or death.

The OID earnings threshold has been updated for the 2024/2025 year.

As announced in Government Gazette 50386 (Notice 2390 of 2024) by the Minister of Employment and Labour on 27 March 2024, the threshold has increased:

• From: R568 959 per annum (2023/2024 limit)
• To: R597 328 per annum, effective 1 March 2024

This threshold represents the maximum annual earnings per employee on which an employer’s assessment is calculated under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act (COIDA).

COIDA compensates employees based on the nature and extent of their injuries.

For permanent disability assessed at 30% or less, the payout is made as a lump sum. This lump sum is calculated as 15 times the employee’s monthly earnings at the time of the accident, subject to COIDA’s prescribed minimum and maximum earnings thresholds.

For example:

If an employee’s monthly earnings are R15,000, the lump sum payout would be 15 × R15,000 = R225,000, provided it does not exceed the maximum earnings threshold set by COIDA.

This ensures fair compensation while adhering to prescribed limits to protect both employees and employers under the Act.

To submit your Return of Earnings (ROE) to the Compensation Fund annually, employers must meet the following requirements:

Employer Registration
Ensure your business is registered with the Compensation Fund and that you have a valid CF Registration Number.

Accurate Payroll Records
Provide details of all employee earnings, including directors and members of close corporations, for the assessment period. For the 2024/2025 period, this includes:

1. Actual earnings from 1 March 2023 to 29 February 2024
2. Provisional earnings for 1 March 2024 to 28 February 2025

Earnings Threshold
Declare earnings for employees up to the prescribed maximum threshold (R597,328 per annum for 2024/2025).

Supporting Documents
Submit these documents along with your declaration:

1. Detailed Payroll Report covering the applicable period SARS EMP501 Report (reconciliation of PAYE submissions)
2. Complete your ROE submission within the prescribed window.
3. Submissions after this date may incur a 10% penalty on the final assessment fee.

Payment of Assessment Fees
Once you receive the Notice of Assessment from the Compensation Fund, ensure full payment or arrange instalments to avoid penalties.

Use the Online System
ROE submissions must be completed online through the CF Online System.

You’ll need your CF registration number and other details to log in.

You can access the full ROE submission guide here.