UIF stands for “Unemployment Insurance Fund”. This fund guarantees Employees an income for a few months in case they lose their job. Once registered, SARS will charge your company UIF fees monthly. PAYE stands for “Pay-As-You-Earn” and it acts as the gateway for SARS to collect Income Tax from your staff monthly. Our UIF / PAYE / SDL Specialists can assist you with your PAYE Registration / UIF Registration / SDL Registration at SARS. To start the process, apply on this page below, or get Toll Free Consultation on 0800 007 269 (free to dial from Cellphones and Landlines).
Our in-house Tax Practitioner, Jack Liebenberg, has over 30 years experience and is affiliated with:
1. Apply. Please complete and submit the easy online application form. A friendly Consultant will then contact you shortly. Alternatively Call us Toll Free on 0800 007 269 during office hours (free to dial from Cellphones and Landlines).
2. We communicate with SARS and/or Department of Labour on your behalf. Our Professional Tax and UIF Practitioners ensure that your UIF/PAYE/SDL Registration is processed correctly and in good time.
3. Start using your UIF / PAYE / SDL Numbers. Our SARS / UIF Department will ensure your UIF/PAYE/SDL Registration is successful in the quickest possible timeframe. We will also email you the Payroll Tax Notice of Registration – this document contains your UIF / PAYE and SDL numbers.
1. Compliance. Employers are required to be registered under law. Massive penalties could occur if this law is ignored.
2. Employee Satisfaction. You can gain trust from Employees if your Business is registered for UIF / PAYE / SDL.
3. SDL Funding. As a Registered SDL payer, you can apply to get funding for the Skill Developments that your Company is involved with (if your Company complies with the SDL requirements).
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In this post, I will be discussing what UIF is in South Africa, whether you have to register for UIF South Africa, what the benefits are and also the fastest way you can register for UIF in South Africa.
This post is for you if you have a business and you have one or more employees. This post is for you if you’ve heard about UIF and you’re wondering what it is, but it’s also for you if you never heard about UIF. UIF is compulsory for almost all employers, so it’s important that you know about UIF in South Africa.
To South African entrepreneurs UIF can sometimes seem like a complicated term and more unnecessary red tape. However, it’s actually very useful, it’s inexpensive and it’s easy to understand, once you get the basics. Unfortunately, there’s a lot of resources on UIF in other countries, but not so much about UIF in South Africa. That’s why we’ve decided to answer the most frequently asked questions about UIF in South Africa.
In short, UIF (The Unemployment Insurance Fund) is a form of insurance that makes sure South African employees are provided for in the case of involuntary unemployment.
The aim of the fund is to offer financial relief to someone who lost their job or their inability to work (for e.g. maternity leave, being between jobs, being “let go” and falling ill see a more comprehensive list in the questions below).
Both the employer and his or her employee contribute a tiny amount, relative to the employee’s salary, to the Unemployment Insurance Fund and in turn, the UIF offers financial relief in the event of unemployment.
If you’re an employer you will be contributing 1% of the value of your worker’s monthly pay (excluding commission) to the fund. Your employee will be contributing 1% of the value of his or her monthly salary.
That means you, as the employer, will withhold 1% of your worker’s salary and you will contribute 1% from your own pocket. You have to pay that 2% value directly to the Unemployment Insurance Fund.
You will have to contribute UIF for every worker you employ. There are a few exceptions and you can refer to them in the questions below.
If you’re an employee, it’s important to notify your employer if they’re not aware of UIF. If they are registered, they should subtract only 1% of your monthly income (excluding any commission you earn) and pay it to the UIF towards your unemployment fund.
For only 1% of your salary, you get unemployment insurance and your employer is legally obligated to contribute the same amount, paying a full 2% in total directly to the UIF.
There are a few exceptions, that you can refer to in the questions below.
If you are an employer, you have to pay 1% of the value of your worker’s monthly salary (excluding commission).
If you are an employee, you have to pay 1% of the value of your own monthly salary (excluding commission).
This amounts to a total of 2% of the monthly salary. The employer is responsible for withholding the employee’s contributing and paying both his / her contribution along with the employee’s contribution directly to the UIF.
There is also an earning ceiling, so there’s a cap to the amount of UIF you can contribute.
Yes, you probably have to. South African law requires both the employer and the employee to contribute the same amount (1% each of the value of the worker’s monthly salary – excluding commission).
UIF applies to all workers (including employees like domestic workers), except:
SARS developed a really easy system with uFiling. uFiling is similar to eFiling. It’s an online platform where you can stay on top of your UIF contributions.
You have to pay UIF (both your contribution and the contribution of your employer) before the 7th of every month. If the 7th is not a business day you have to pay on the last working day of the first week of the month.
If you are an employer that means you will have to contribute to each employee’s UIF unless they work for you less than 24 hours a month.
If you are an employee that means a tiny piece of your salary will be withheld by your employer as your contribution to your UIF Fund. You will receive financial relief if you ever find yourself unemployed.
If you are an employer, you probably have to register for UIF, unless all your employees work less than 24 hours a month for you.
Expert tip: Call us Toll Free on 0800 007 269 during office hours (free to dial from Cellphones and Landlines). One of our UIF experts will walk you through the UIF Registration process in South Africa.
UIF is essentially just relevant when an employee involuntary lost their job. If an employee’s contract is terminated or if they are let go, UIF is relevant.
Here are a few examples of instances when an employer can put in a claim to the UIF (it depends largely on the specifics of every case):
Additionally, domestic workers can claim UIF if:
However, a claim for UIF cannot be submitting under the following circumstances.
If the employee:
There are various forms of UIF Benefits to claim for.
However, if it’s simply because you stopped working you have to put in your claim within six months after you’ve stopped working.
You can claim benefit from the day you stopped working until you get a new job and SARS won’t tax you on benefits paid to you. However, if you refuse to take job opportunities, refuse to go for training if it’s needed or take the advice that would help you get a job, the UIF may refuse to pay you.
Also, it’s a prerequisite that you register as a work-seeker and that you are available for work if you claim UIF Unemployment Benefits. The idea of the fund is not to replace work, but rather to help those who lose or can’t find work support themselves while they actively search for a new job.
A worker can claim by filling out the UIF application forms and submitting them, along with the other required documentation, at the local Labour Department.
Yes, it will ensure that your employees are safeguarded if you ever need to fire them. Perhaps the benefit is not that directly linked to a profit gain but it ensures you can take care of your employees in some way if things ever go wrong financially in your business.
Keep in mind, these are the people that help build your business and they deserve to be protected when the economy fails you or if you ever make bad business decisions that cause your employees to lose their daily income. This is especially relevant when their family has no other income and dependents who rely on them.
If an employee offers their daylight hours to help you build your dream, you owe them that security so they can feed their family and get back up in the case of a job loss.