There are a few things in life that can feel pretty daunting, even to us adults. Applying for a passport, sending your child to school on their first day of grade 1 or visiting a country where English is not commonly spoken. Finding your way around UIF is probably another one high on your list, especially if you are a small business owner in South Africa.
What is UIF?
The Unemployment Insurance Fund (UIF) is run by the Department of Labour and its aim is to assist South Africans who have lost their income.
Making contributions as abusiness owner:
If you have 1+ employee, you are required to be registered and contribute towards UIF each month.
Mandated monthly contribution per employee:
1% employee contribution (max R177.12pp) + 1% employer contribution
The responsibility lies with you, the employer, to deduct the 1% from every employee’s salary each month and make the contributions to UIF on all of your employees behalf.
(It is illegal to charge a greater % to your employee, even if you fall behind on making contributions to UIF for them, or to charge them an administrative fee for managing their UIF contributions on their behalf.)
Who can claim UIF:
Employees are entitled to claim from the UIF if they have been contributing towards UIF and if they experience:
- involuntarily termination
- maternity, paternity or adoption leave
- illness for longer than 2 weeks.
- the spouse or u18 child of a deceased can claim from UIF under the death benefit, on condition that the deceased had been contributing towards UIF.
- Foreigners that are permanently employed in South Africa can also claim from UIF.
Who can’t claim UIF:
It is important to make sure that your employees know when they can’t claim from UIF.
- Employees that voluntarily quit
- Employees suspended due to any criminal act
- Employees that refuse training
- Employees that are already receiving other benefits as prescribed from the Labour Relations Act
How to claim:
For your employees, the thought of starting the journey in claiming from UIF can feel very overwhelming. Where to go, what to do, what forms to complete and what other documentation to bring along. There are a couple of suggestions:
1. Head to the Department of Labour’s website to find out exactly what forms and documentation are required for their particular circumstance.
2. Find a specialist UIF company who can assist with their claim. This is a really easy and stress free solution that many people these days take.
3. Alternatively, they can visit the UIF office in their area to start the process and submit the required documents.
Top tips for SME’s needing to begin contributing towards UIF:
Although you pay your UIF contributions each month via your PAYE declarations, this doesn’t mean you are registered for UIF with the Department of Labour. Make sure you register with the Department of Labour.
UIF will not deal with any third parties , they only will deal with you, the business owner.
The Department of Labour requires a separate monthly declaration to be submitted to reconcile the amount paid via SARS to the individual employees on record. At Iridium, we do this for our clients electronically through SimplePay each month.
As part of our service offering to our clients we manage your UIF set up and contributions for you, taking the stress out of UIF. While you focus on growing your business, we’ll take care of understanding & managing your UIF requirements for you.
Keen to ask us some more questions that haven’t been answered in the blog post above, feel free to reach out to us to chat some more, by clicking here.