On 28 May 2021, the Minister of Finance, Tito Titus Mboweni, announced that the contributions to the unemployment insurance fund (UIF) must be determined on remuneration not exceeding R 17 712.00.
This constitutes a raise of R 2 840.00 from the previous cap of R 14 872.00.
This implementation took effect from 1 June 2021 and has been official gazetted, no 44641, on Friday 28 May 2021.
All Employers and payroll providers must therefore ensure that the correct UIF contributions are paid during any month from June 2021 going forward. These changes are to be implemented this month so that payment can be made correctly by the 7th of July 2021.
In terms of UIF legislation, all employers are required to register their employees who work 24 hours or more in a month for UIF and contribute 2% of their monthly salary (1% from the employer and 1% from the employee).
So how does the calculation work exactly?
- If the salary is below the threshold of R 17 712.00 the 2% UIF contribution will be calculated on that salary whatever the salary amount is and as long it is not greater than R 17 712.00.
- If the salary exceeds the maximum threshold of R17 712.00, the 2% UIF contribution will be calculated on the amount of R 17 712.00 only, regardless how high the salary is.
Our outsourced payroll service will ensure that you always meet all of the compliance requirements when it comes to SARS, UIF, PAYE, SDL and Workmen’s Compensation contributions.
For further advice and to assist you with professional solutions for all you staffing requirements contact us at info@cfmanagement.org.za.