UIF: All must register

2015-07-29 06:01
Jeanette Monahadi

Jeanette Monahadi

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QUESTION: I recently started a small business in Bloemfontein and am unsure about whether or not I should register the few people working for me for UIF. And if I have to, where do I start?

ANSWER: It is important for all employers to know that Unemployment Insurance (UIF) is regulated by legislation which states that all employers must register for UIF except in instances where the business has:Employees working less than 24 hours a month;Learners under a learnership as defined in the Skills Development Act;Foreigners working on a contract basis who will, after expiration of their contract, leave the country;Workers who only earn commission; andPublic servants employed by government.

This means that every employee but for those mentioned above, must be registered for UIF.

There are two ways of registe-ring. Firstly, those employers who are registered with SARS to pay employee’s tax (Pay As You Earn or “PAYE”) must also register directly with SARS for UIF purposes, while secondly, those employers who are not liable to make PAYE deductions from employees’ salaries must register directly with the Unemployment Insurance Fund (“Fund”).

The latter can be done by going to the nearest Department of Labour or by faxing, posting or emailing the relevant forms to the Fund. All employers registering with the Fund need to fill out an “Application as an Employer” form or the UI-8, as well as accompanying forms which one can get from the Department of Labour or download from their website.

Once registered, a monthly contribution of 2% for each employee is payable before the 7th day of each month.

If the 7th day falls on a public holiday or weekend, contributions must be made on the last business day before the holiday/weekend. The employer must deduct no more than 1% from the employee, while the other 1% is the employer’s contribution.

The rule is that collecting contributions is the employer’s responsibility and if an employee falls behind with his contributions after a financial year end, the employer is liable for the contributions.

Also important when calculating the monthly contribution is the fact that the contribution only applies to that part of an employee’s salary not exceeding R14 872.

This means that if an employee earns more than this amount, the amount in excess of R14 872 is not taken into account for purposes of the monthly UIF contribution.

This amount is annually updated and employers are advised to keep track of any notices in the Government Gazette relating to the change in the salary threshold for UIF calculation purposes.

If you are an employer and have not yet registered with the Fund you should do so as soon as possible and make the necessary arrangements for addressing outstanding amounts. If you are unsure on how to proceed, it may be good to get advice from a labour professional.

S

Jeanette Monahadi, associate, Phatshoane Henney Attorneys

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