Support for Business – COVID-19 Employment Tax Incentive

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

Traditionally, the Employment Tax Incentive (ETI) was intended to promote youth employment, so to address youth unemployment in South Africa. In order to qualify for the standard ETI, certain criteria around employee ages, citizenship and remuneration have to be met. In return for this, in the first 24 months of employment, the employer’s PAYE liability can be reduced. The amount that PAYE liability can be reduced is dependent on the wage bracket that the employee falls within as well as whether it is their first or second year of employment. More info on these requirements is available on our ETI help page.

What are the features of The New COVID-19 ETI Scheme?

Coming into force on 1 April 2020, the COVID-19 ETI scheme will run for 4 months. There are a number of changes which will benefit both those who already qualify under the standard scheme, as well as those that otherwise would not.

Additionally, the frequency of reimbursement payments by the South African Revenue Service (SARS) will be increased from bi-annually to monthly, ensuring that compliant employers retain capital.

Employers already able to claim

Employers who are currently eligible to partake in the scheme, or who are already claiming in either their first or second year, are able to claim an increased reduction in PAYE liability.

For those currently in or going into their first year under the scheme, the maximum amount claimable as a PAYE reduction has increased from R1000 to R1500.

For those currently in or going into their second year, the maximum amount claimable as a monthly PAYE reduction has increased from R500 to R1000.

Employers that would otherwise not be able to participate in ETI

The Government has introduced the following two expansions to the rules for people that can claim over the coming 4 month period. Companies employing individuals falling under this broadened category are entitled to a monthly PAYE liability reduction of R500. The expansions are for:

  • Employees aged 18 to 29, for whom the full 24 months of regular ETI have already been claimed.
  • Employees aged 30 to 65.

This therefore means that employees between the ages of 18 to 65, who meet all other criteria, qualify for the expanded ETI, benefiting their employers. We would strongly recommend that, if you have any employees whose monthly remuneration is between R2000 and R6500, you explore this opportunity.

Requirements to Partake in the Scheme

In order for employers to qualify for this scheme, they must have been registered for PAYE with SARS on or before 1 March 2020. Any employers who were not registered with SARS at this point should instead look into the applicability of the standard ETI.

It is unclear as to the requirements for payroll software in accommodating how this deduction needs to be recorded. We are anticipating clarification of this point today, 1 April, and we shall provide you with an update of how to claim the sums for qualifying employees on SimplePay before your next payroll submission.

We hope this information aids you in this time of uncertainty, we will continue to do our best to assist you where we can with any queries you may have. Watch this space for new posts on support for the Industrial and Tourism sectors, as well as an extremely useful summary sheet on the various UIF forms, codes and their utility.

Keep well. Stay home. Stay safe.

Team SimplePay

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

UIF Quick Reference Guide

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

In an effort to alleviate payroll strain and to simplify the various UIF codes and forms for employers to understand, we have put together a summary of how these all work.

UIF CODES

The Unemployment Insurance Fund (UIF) has allowed for existing Employment Status Codes, 10, 14 and 17, to be used when submitting the monthly UIF declaration for employees whose employment has been negatively impacted by the COVID-19 pandemic. The below table outlines when these codes should be used in relation to COVID-19, but does not outline how these codes are used for employees not impacted by COVID-19.

Employment Status CodeWhen to Use ItAdditional Information
UIF 10 – Illness leave– The employee is diagnosed by a medical practitioner as having COVID-19 and is unable to work.
– On agreement between the employer and employee, the employee has self-isolated to remove themselves from society (for 14 days) and is unable to work from home.
UIF 14 – Business Closed
– There is a complete cessation of employment. i.e. even after the 21 day lockdown, the employee will not be returning to work.
This will normally be the case when the business ceases to operate.
UIF 17 – Reduced Working Time– The employee is put on reduced hours due to lockdown or business needs.
– The employee has been sent home for the 21-day lockdown period, but is expected to return to work when the lockdown is lifted.
It does not have to be certain that they will return at the point that lockdown ends, this merely has to be the original intention.
It is advisable that if you intend to reopen and it seems likely at the time of ending an employee’s service, employers should go for this over code 14, as it means that employees can rely on the 3 months of UIF payments.

The above codes can be used when ending an employee’s service, permanently or temporarily, due to COVID-19. When ending an employee’s service with codes 10 or 17, please also immediately capture their reinstatement using the date on which you foresee the employee returning to work. This will allow SimplePay to populate the correct date ranges and amounts when generating individual UI-19s and UI2.7s (functionality coming soon). For more information on ending an employee’s service on SimplePay, refer to the following help pages:

UIF Forms

We have listed the various forms below that need to be completed when applying for employee UIF benefits. 

Employees can submit applications themselves via uFiling or can use the contact details listed in the Easy Aid Guide

It is worth noting that if the employer has all the relevant documents from the employee, they will be able to file the application on their employee’s behalf, by emailing the completed documents to their provincial UIF processing centre, which are listed in the Easy Aid Guide above. 

SimplePay currently generates the consolidated UI 19 for monthly submission to the UIF. We are in the process of creating individual versions of this form, which employers will be able to complete and provide to their employees to claim the UIF benefit. We will make another announcement when this is available.

Temporary Closure / Reduced Hours

DocumentPurposeInformation RequiredCompleted by
UI 19 (individual version)An individual version is submitted by the employee when applying for benefits. – Employer details: UIF employer reference number, PAYE ref number, business name & Address, contact info.
– Employee details: Name, ID number, gross remuneration paid (monthly), hours worked, employment start and end date, reason for termination, contributor?
Employer
UI 2.1Application form for UIF by employee– ID / passport number
– DOB
– Name & address
– Contact number, email 
– Occupation
– Signature
Employee
UI 2.7Remuneration of employee whilst still employed– Name of the employee
– ID number of employee
– Employer’s UIF ref. number
– Date the employee has been on leave since
– Remuneration in date ranges leading up to leave.
– Expected return date
– Actual return date
– Employer signature
Employer
UI 2.8Application to pay benefits into a bank account– Name of employee
– Identity number
– Signed and dated
– Proof of bank account

This needs to be stamped by the bank. Most straightforward is to get a stamped statement.
Employee’s bank
Letter by employer Confirming company shutdown due to COVID-19

Diagnosed with or Suspected of Contracting COVID-19

DocumentPurposeInformation RequiredCompleted by
Employer confirmation letterAgreement that employee must self quarantine– Employer name and ID number
– Employee name and UIF reference number
– Date range
– Signature
Employer
Employee declaration letterAgreement that employee must self quarantine– Employer name and ID number
– Employee name and UIF reference number
– Date range
– Signature
Employee
UI 2.2Application for illness benefit– Employee full name, ID, DOB, gender
– Address, contact number & email
– Tick box and signature
Employee, UIF official
UI 2.7Remuneration of employee whilst still employed– Name of the employee
– ID number of employee
– Employer’s UIF ref. number
– Date the employee has been on leave since
– Remuneration in date ranges leading up to leave.
– Expected return date
– Actual return date
– Employer signature
Employer
UI 2.8Application to pay benefits into a bank account– Name of employee
– Identity number
– Signed and dated
– Proof of bank account

This needs to be stamped by the bank. Most straightforward is to get a stamped statement.
Employee’s bank

Procedure to Claim UIF Benefits

For more information on the steps required to claim UIF benefits, refer to the following sections in our COVID-19 Lockdown – 27 March to 16 April 2020 blog:

  • Procedure for Healthy Employees Impacted by Reduced Hours or Temporary Closure to Claim UIF benefits
  • Procedure for Employees who are Suspected or Diagnosed with COVID-19 to Claim UIF benefits

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

Support for Business – COVID-19 TERS

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

Opportunities for Businesses to be Supported by the COVID-19 Temporary Employer-Employee Relief Scheme (TERS)

As mentioned in our blog released this morning on Government initiatives to support businesses, this blog is dedicated to giving an overview of the COVID-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS).

If you have experience with the pre-existing TERS system, it is important you know that the procedure has been altered for COVID-19. The breadth of what can be applied for has been narrowed to employee remuneration only, and the applications should now be made to the Department of Labour instead of the Commission for Conciliation, Mediation and Arbitration (CCMA). Below we will give you further information on the pandemic related scheme.

COVID-19 TERS is a scheme which is aimed at providing support to businesses that are in distress due to the COVID-19 pandemic. If a company has their funding approved, the UIF will fund companies which are directly affected by COVID-19 in the form of a TERS allowance. The default length of funding is for 3 months, but can be extended with prior written consent by both the employer and COVID-19 TERS representative.

In applying for COVID-19 TERS funding, there are some requirements that businesses must meet:

  1. The company must be registered for UIF. 
  2. The company’s closure must be directly linked to COVID-19, that is to say, it was not already in the process of being wound up before the lockdown. 
  3. The company must comply with the application process, detailed below.

This is considerable relaxation on the standard TERS requirements, where a company needed to be able to demonstrate compliance with the current UIF legislation, or undertake to do so within a stipulated time frame, as well as embarking on a sustainability programme. It is therefore worth reconsidering this scheme if it was not a viable option in the past for your company.

Successful applications will get contributions of between 38-60% towards the employee’s remuneration on a sliding scale, where the percentage contributed decreases, the more the employee earns. In addition, there is a cap on remuneration of R17,712 per month, per employee. Should the determined income be less than the minimum wage for the employee’s sector, an adjustment will be made to give them the minimum wage. It is therefore imperative that forms be filled in carefully and accurately, being double-checked before submission.

How does the Process work?

In applying to TERS, employers must get the application form and other documents by emailing [email protected]. An automated response will come back, providing you with:

  •  A list of the documents required
  • A copy of the “COVID-19 TERS Easy Aid Guide” *
  • A draft Memorandum of Agreement (MOA) which needs to be filled in with the relevant information and signed
  • A template listing critical information required to be filled in by the employer

For ease of reference, we’ve included a copy of the requirements list below:

  • Letter of authority, on an official company letterhead, granting permission to an individual specified to lodge a claim on behalf of the company
  • MOA** (completion of the agreement between UIF, Bargaining Council and Employer); only applicable to employers that have more than 10 employees
  • Employers that have 10 or less employees, must still complete the MOA, but it is only entered into by themselves and the UIF.
  • Prescribed template that will require critical information from the employer. (The team is in the process of adding the functionality to the system to produce this template. We shall update you as soon as this is done).
  • Confirmation of bank account details in the form of certified latest bank statement
  • Evidence / payroll as proof of the last three months employee(s) salary(ies)

Once all of the above information is complete in the prescribed format, applications are to be sent to [email protected]. After the fund has signed off the employer can expect payment as laid out in the MOA**.

*The COVID TERS Easy Aid Guide is available here.

**A copy of a draft MOA can be found here.

Advisory Note: One point to note is that the draft MOA** contains several obligations and so needs to be read carefully. It is advisable therefore to negotiate any terms and conditions that would be particularly onerous for yourself to fulfill.

We hope this information aids you in this time of uncertainty, we will continue to do our best to assist you where we can with any queries you may have. Watch this space for new posts on support for the Industrial and Tourism sectors, as well as an unpacking of the new ETI initiative.

Keep well. Stay home. Stay safe.

Team SimplePay

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

COVID-19 Lockdown – Support For Business

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

Update 31 March: Link added to the COVID-19 Temporary Employer-Employee Relief Scheme.

As mentioned in our previous blog, which outlined the various support options for employers with respect to their employees, there are also a number of Government initiatives being implemented to help support businesses through the lockdown period.

In this blog, we will provide a brief overview on schemes that could provide support to businesses in general, but also for businesses working in specific sectors.

Opportunities for Businesses to Claim Tax Relief

During the address by Ministers in the Economic Cluster on 24 March, a number of pledges were made to help support businesses over the coming period.

One such measure permits tax compliant businesses with a turnover of less than R50 Million to delay 20% of their EMP-201 liability over the next 4 months. We are awaiting guidance on how this is to be administered, so we will update you as to whether any changes are needed when we know more.

Additionally, a portion of corporate income tax can be delayed for 6 months, with both the EMP-201 and corporate schemes having no penalties or interest accrue over their respective periods. 

We’d like to remind and encourage all qualifying employers to avail themselves of the existing relief in the form of the Employment Tax Incentive (ETI). There is a draft proposal to expand this relief via a R500 per month subsidy. It has been proposed that this additional relief will be available for employers who were registered with SARS as at 1 March 2020 and will run between 1 April and 31 July 2020.

Additionally, there are prospects for the temporary reductions of Unemployment Insurance Fund (UIF) and Skills Development Levy (SDL) contributions.

We are awaiting announcements on the measures mentioned in this paragraph and will update you as soon as we know more.

Opportunities for Businesses to be Supported by the COVID-19 Temporary Employer-Employee Relief Scheme (TERS)

COVID-19 TERS is a scheme which is aimed at providing support to businesses that are in distress due to the COVID-19 pandemic. If a company has their funding approved, the UIF will fund companies which are directly affected by COVID-19 in the form of a TERS allowance. The default length of funding is for 3 months.

Please find the link to the COVID-19 TERS Blog here.

Support for Small, Medium and microsized Enterprises (SMMEs)

In her speech on the 24 March, Ms Khumbudzo, Minister for Small Business Development laid out plans to support SMMEs during the lockdown period. R2 billion was donated by the Rupert & Oppenheimer families, solely to support small businesses and their employees. This is intended to be done in multiple ways, through the Business Growth and Resilience Facility, as well as the SMME Debt Relief Finance Scheme.

In order to qualify for the schemes, Ms Khumbudzo laid out qualifying criteria, namely the SMME, self employed individual or small company must:

  1. Have been registered with CIPC by at least 28 February 2020
  2. Be 100% SA owned
  3. Employ at least 70% South African citizens
  4. Be SARS & UIF registered and compliant.
    • (Non-compliant SMMEs can still apply, but they will only be considered when they are fully compliant.)
  5. Be registered on the national SMME database (www.smmesa.gov.za).
  6. Be able to show that it was negatively affected by the COVID-19 pandemic.

Businesses owned by women, the youth demographic and people with disabilities will be given preferential treatment for funding. If your company does not meet all of the above criteria, the Small Enterprise Development Agency (SEDA) can assist you in becoming compliant.

The application forms for the schemes detailed below are to be released on 2 April, so it is advisable to ensure that your company is registered on the SMME database and you have inspected your SARS & UIF compliance to see where you stand.

Debt Relief Finance Scheme

The aim of this scheme is to fund working capital for self employed and informal workers and is the “safety net” the president referred to in his lockdown speech on 23 March. The intention is to run the scheme for 6 months, with working capital being loaned at a rate of prime less 5%. The size of the facility available to each SMME will be determined by comparison of their cashflow before and after COVID-19.

Additionally, Small Enterprise Finance Agency (SEFA) funded SMMEs will be able to take advantage of a payment holiday, removing loan obligations for 6 months. The deferment of the loans will not be capitalised, meaning that you will not pay any interest for the 6 month period. SEFA SMMEs will also be able to benefit from an audit to determine whether the client could benefit from a debt restructuring, with options such as converting to longer loans and additional funding to be explored.

The specific requirements for the Debt Relief Finance Scheme are found here.

Business Growth and Resilience Facility

In this scheme businesses geared to take advantage of the supply opportunities and shortages resulting from the COVID-19 pandemic will be able to partake in the scheme.

Working capital will be funded, but only for those that are directly linked to the direct cost of the business. The amount of funding will be based on the individual needs of the business, with loans being made at prime less 5%. In an attempt to dissuade any abuse of the scheme, if any entity is found to abuse this beneficial rate, they will be forced to repay the loan in full at prime plus 10%.

The page relating to the requirements can be found here.

SMMEs are encouraged to make use of the alternative support email and hotline number in preparation for the release of the application forms on 2 April. The contact details are [email protected] & 0860 633 7867.

Solidarity Fund

In the president’s speech on 23 March, there was mention that seed capital will be provided for the Solidarity Fund. The fund will be administered by a team made up of financial institutions, accounting firms and the Government.

The aim of the fund is to alleviate the suffering and distress the virus inflicts on the country through: preventive measures to flatten the curve; more widespread testing to help detect new cases; caring for those who have contracted the disease; and supporting families affected. If you are in the position to be able to donate to the solidarity fund, you can do so at www.solidarityfund.co.za.

As always, we’re here to help where we can. Please feel free to get in touch if you need help with any of the above on SimplePay.

Take care, stay home, stay safe.

Team SimplePay

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

New Feature: Managing End of Service in Bulk

To ease the payroll burden on employers and payroll administrators during the COVID-19 pandemic, we have introduced a new Employee Actions section to our Bulk Actions page to allow users to do the following for their employees in bulk:

  • End Service
  • Reinstate
  • Undo End of Service

This new bulk functionality allows you to manage multiple employees’ services in one place on SimplePay. This means that whether you are putting your employees on Reduced Working Time due to COVID-19, or you are reinstating them when business has returned to normal, you will be able to do this easily and for all your employees at once!

To learn more about how this functionality works, head over to our help page here.

For larger companies we recommend limiting this bulk functionality to batches of 50 employees to ensure smoother results.

If you have any questions, please contact our support team.

Team SimplePay

COVID-19 Lockdown – 27 March to 16 April 2020

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]

A Note on UIF Forms: Our existing functionality allows you to submit the monthly consolidated UI-19 for all employees each month directly to the UIF from the SimplePay website. We’re currently working on new functionality that will provide UI-19 forms for individuals. This is needed for employees to claim.

Queries about UIF payments being delayed should be directed to the UIF. Unfortunately we won’t be able to provide much insight or assistance with this. Contact details for the UIF processing centre can be found in this the Easy Aid Guide for Employers.

30 March 2020: Information on the option for employers to complete the UIF application on behalf of their employees. Further UIF code 10 is unpacked, related to employees who fall ill.

27 March 2020: 

  • Greater detail on the process required to submit both types of UIF applications has been added, including who is responsible for each part of the process.
  • More information on what is required when handling employees with reduced hours, to enable them to claim a benefit.
  • Clarification on the different codes required when ending your employee’s service in different situations.
  • Brief update on the progress of TERS at the foot of the blog.

26 March 2020: Updated the requirements for form UI 2.8 to be accompanied by a bank statement, stamped by the bank.

On Monday 23 March, President Ramaphosa announced a 21 day lockdown from 23:59 on Thursday 26 March. Many South Africans welcomed this but are also uncertain as to what this means for their employees and businesses. Over the past few days, the respective Governmental Departments have released information regarding plans to support companies and their employees through the COVID-19 pandemic. 

The aim of this blog is to provide guidance to employers on the options available to them around paying employees, putting them on paid and unpaid leave and UIF benefits.

Earlier in the week we let you know that our team has gone fully remote and are pleased to be able to support our clients and employees in this way. In some sectors, this mode of working can be adopted relatively easily and many have already done so; however, for a lot of sectors and employees this is unfortunately not an option. For those employers who have to scale back or suspend regular activities, the following options exist:

Options for Healthy Employees Impacted by Reduced Hours or Temporary Closure 

Where employees are healthy and able to work, but are prevented from doing so due to the lockdown, employers and employees can agree that annual leave be used to cover some or all of the lockdown period on full pay. You are also always able to extend extra paid leave days to all employees should you so wish.

Where none of the paid leave types are an option, employees can be put on unpaid leave. Employees impacted in this way are able to claim Unemployment Insurance Fund (UIF) benefits as a result of either reduced hours or closure. To do this on SimplePay, you will need to provide a code when ending your employee’s service. Please use code 17 for temporary closure or reduced hours, i.e use this code if employees are expected to return to work on 17 April 2020. It is important to note that you must end the employee’s service on SimplePay. If you simply record unpaid leave on the calendar, UIF will not be claimable by employees.

The government intends to extend UIF benefits for these employees for up to three months. Employees who receive no income will be entitled to full UIF benefits.

If you’re paying your employees reduced pay, a partial UIF benefit will be available. For this benefit to be available, there must be an agreement between the employer and their employees to reduce hours as an alternative to retrenchment.

Procedure for Healthy Employees Impacted by Reduced Hours or Temporary Closure to Claim UIF benefits

To claim UIF for a reduction in hours or temporary closure, the following must be completed:

  1. Contact and inform the relevant provincial department representative of your temporary closure/reduction in hours. The contact details for each of the offices can be found on page 3 of the Easy Aid Guide for Employers.
  2. The following forms and documents need to be completed for each employee:
    1. UI 2.1 (application form)
    2. UI19 (Submitted monthly by the employer) and UI 2.7 (completed by Employer)
    3. UI 2.8 (accompanied by a bank statement, stamped by the bank)
    4. A letter from the Employer confirming company shutdown or employee’s “temporary lay-off” ( or reduced work time ) is due to the Corona Virus 
    5. Copy of Employee’s ID document
  3. Once completed, these forms need to be transferred to the employee to submit the claim. Claims can be done at the nearest labour office, online once the employee has registered, or via email or fax, details listed on page 7 of the Easy Aid Guide. If an employer wishes to do this on behalf of their employee, provided they have all the necessary information, this is possible by emailing the relevant processing centre with the required documents. ( n.b. Form UI2.8 could prove difficult for the employer to obtain now that lockdown is in force).
  4. To ensure the employee can claim, the must ensure they have:
    • A copy of 13-digit bar-coded identity document
    • A copy of your last six payslips
    • UI-19 supplied by your employer
    • A service certificate from the employer (point 2.4, provided by the employer)
    • Proof of registration as a work seeker
    • A fully completed registration form

This may appear a daunting number of forms, but it is worth noting that the provincial departments, listed in the Easy Aid Guide, will provide the necessary assistance with the application and payment of this benefit type. SimplePay is also in the process of making these forms available through our system, lessening the burden on you and reducing the chance of human error.

Additionally, if your business employs 50 or more employees, who may be subject to temporary lay offs, rapid response teams have been formed to aid you with this process. In respect to this you need to get into contact with your provincial office, as listed in the Easy Aid Guide.

Options for Employees who are suspected or diagnosed with COVID-19

The requirement that an employee suspected of, or is diagnosed with COVID-19, must self isolate for 14 days remains in place. This period can be covered using an employee’s sick leave as with any other instance of illness. If the employee has no sick leave, you can agree to have them use annual leave otherwise they may be placed on unpaid leave. As above, the option to grant additional paid leave is also available. For all of these, record leave on SimplePay as usual.

Where the employee has had to be placed on unpaid leave as a result of contracting COVID-19, the following options to receive some income exist:

  1. Apply for an illness benefit through UIF 
    1. This covers the 14 day isolation and requires several documents, including a letter of agreement signed by employer and employee. 
    2. This period can be extended if required. 
    3. Full details on documents required and the application process can be found at the end of this post.
  2. Apply for compensation for Occupationally Acquired COVID-19 Disease, through the recently amended Compensation for Occupational Injuries and Diseases Act (COIDA)
    1. This is available if the employee contracted COVID-19 in their place of work or on a business trip to another country or area.
    2. More details can be found in this Government Notice and the process to claim is outlined at the end of this post.

Procedure for Employees who are Suspected or Diagnosed with COVID-19 to Claim UIF benefits

To claim UIF for an illness benefit, the following must be completed:

  1. Fill in the following forms:
    1. A confirmation letter from both the employer and employee, stating that they have agreed to 14 days of “special leave”, due to COVID-19.
    2. UI 2.2 (medical portion to be ignored, as this is substituted by the above letter. This is because the employee will already be in quarantine).
    3. UI 19 (which can be completed through SimplePay) and UI 2.7 (completed by Employer)
    4. UI 2.8 (accompanied by a bank statement, stamped by the bank)
    5. Copy of employee’s ID document.
  2. On SimplePay, when completing the employee’s End Service, please use UIF code 10 – Illness leave.
  3. Once completed, these forms need to be transferred to the employee, who must then submit the claim. An application can be lodged in one of the following ways:
    1. Online at www.ufiling.co.za 
    2. Email or fax the nearest UIF processing centre. (information found on page 7 of this link). If an employer wishes to do this on behalf of their employee, provided they have all the necessary information, this is possible by emailing the relevant processing centre with the required documents. ( n.b. Form UI2.8 could prove difficult for the employer to obtain now that lockdown is in force).
  4. To ensure the employee can claim, alongside the other documents they must ensure they have:
    • A copy of 13-digit bar-coded identity document
    • A copy of your last six payslips
    • A service certificate from the employer
    • A fully completed registration form

Unlike temporary closure, there is no bespoke assistance for the filing of this application. It is likely though that there are fewer employees that qualify for this benefit, lessening the administrative load. If you do experience any difficulties, we would encourage you to touch base with your nearest UIF processing centre for guidance.

At the end of the 14 day period a UI3 form needs to be completed, for the payment to be executed into the employee’s bank account. This should either be done on the ufiling website, or by emailing or faxing your closest UIF Processing centre, as listed in the aid guide. If the employee remains ill beyond the 14 day period, they must obtain a medical certificate from a medical practitioner and submit a further UI3 in order to be able to continue to claim the benefit.

Options for Healthy Employees Impacted by a Permanent Closure  of Business

Unfortunately, in some cases the strains on your business may be too great, resulting in your company ceasing to operate permanently. If this is true for yourself, you should use code 14, denoting permanent closures, i.e use this code if, upon the completion of the 21-day lockdown, the employee shall not continue their employment. Same as for the temporary closure process above, you must end the employee’s service on SimplePay in order for the employee to be able to claim UIF.

In this scenario, the normal process for claiming UIF will likely need to be followed. Therefore, the 3 months extended period of UIF benefit will probably not be applicable.

Procedure for Claiming under COIDA

There are a few key components to being able to claim under this system. The following are required elements:

  • The employee must test positive for the COVID-19 virus (as defined in COIDA).
  • The contraction of the virus must arise out of and happen in the course of employment.
  • There must be a realistic and logical explanation for the exposure to COVID-19, which occurred in the course of employment.

If the above statements apply to an employee, they could be entitled to claim under COIDA. More detail on the requirements can be found here

WATCH THIS SPACE: Temporary Employer Relief Scheme (TERS) and other Relief Measures for Employers

In an effort to avoid retrenchment, the Government is also in consultation to pay wages of employees in struggling companies through the Temporary Employer-Employee Relief Scheme. To gain an insight into the sheme, the process required to participate and to see some templates of the required forms, please send an email to “[email protected]”. You will receive an automated response with all this information. We will also be providing more information on this and other relief measures in our next blog post next week.

As always, we’re here to help where we can. Please feel free to get in touch if you need help with any of the above on SimplePay.

Team SimplePay

Should you have any queries over the content or processes to follow within this blog, please contact our support team via [email protected]


Interest Rate Change for Employer Loans

The South African Reserve Bank has decided to decrease the repurchase rate (repo rate) by 100 basis points, effective from 20 March 2020.

The official interest rate used for calculating the fringe benefit on low or interest free loans to employees is set as 100 basis points above the repo rate. This means that the interest rate used for calculating the fringe benefit on employer loans decreases from 7.25% to 6.25%, effective 20 March 2020.

If you’re a SimplePay user, you do not need to take any action to implement the new interest rate, as we have already updated our system to reflect these changes. Therefore, all payslips dated and finalised from 20 March onwards will use the new interest rate. If a payslip dated after 20 March was finalised before the 20 March (i.e. it was finalised in advance), you will need to unfinalise the payslip and then finalise it again for the changes to take effect. As we have built our system to be intuitive, the previous interest rate will be used if you are still preparing payslips dated before the 20 March, regardless of what date you physically finalise the payslip.

If you are unsure of how to capture employee loans or calculate the fringe benefit on them, refer to our help page here.

Team SimplePay

2020 OID / Workman’s Comp Update

It’s that time of the year again – when you have to complete your Return of Earnings (ROE) or W.As.8. It is basically a declaration to the Compensation Fund of your employees’ earnings for the past year – in this case from 1 March 2019 to 29 February 2020 (the same as the tax year). In addition, you also need to provide projected earnings for the next year.

Although the official deadline is 31 March, this has been extended to 31 May.

As always, we at SimplePay try to make your life easier, and you are able to download a report from our system that will help you to complete your W.As.8. Simply go to Submissions > OID (Workman’s Comp) Return.

More information about the Compensation for Occupational Injuries and Diseases (COID) Act can be found on our help site.

Remember: your bi-annual SARS filing / reconciliation is also coming up soon, so if you get your ROE submission out of the way, it’s one less thing to worry about.

Please feel free to contact [email protected] if you need any assistance.

Team SimplePay

Updates in SimplePay for the 2020/2021 Tax Year

As we enter the new tax year on 1 March, we’d like to remind you that there is no need to do a manual year end as in other payroll systems – simply continue processing payslips into the new tax year.

When you need to do your filing, the correct period will automatically be used and the relevant documents will be generated. For more information, please see our help site.

In addition, our system has already been updated in order to ensure that you are always compliant. We are pleased to inform you that as from 1 March 2020, your payroll will automatically meet all the requirements for the 2020/2021 period, as announced in the 2020 Budget Speech on 26 February 2020. If you are still processing payroll for the 2019/2020 tax year, the old tax tables will still be used, as you’d expect.

Here are some of the most important changes that you will see in your payroll for the coming year:

2020/2021 Tax Rates

The tax rates for individuals have remained the same as last year, with the tax brackets, thresholds and rebates increasing.

Taxable Income (R)Rate of Tax (R)
0 – 205 90018% of taxable income
205 901 – 321 60037 062 + 26% of taxable income above 205 900
321 601 – 445 10067 144 + 31% of taxable income above 321 600
445 101 – 584 200105 429 + 36% of taxable income above 445 100
584 201 – 744 800155 505 + 39% of taxable income above 584 200
744 801 – 1 577 300218 139 + 41% of taxable income above 744 800
1 577 301 and above559 464 + 45% of taxable income above 1 577 300

The tax threshold has increased from R79 000 to R83 100 because the primary rebate has increased from R14 220 to R14 958.

Medical Aid Tax Credit

The medical aid tax credit has increased as follows:

  • The tax credit for the main member and first dependant has increased from R310.00 to R319.00 per month.
  • For every additional dependant, the tax credit has increased from R209.00 to R215.00 per month.

Subsistence Allowance

The ‘tax free’ portion for the subsistence allowance** has increased as follows:

  • The allowance for incidental costs within South Africa has changed from R134.00 to R139.00.
  • The allowance for meals and incidental costs within South Africa has changed from R435.00 to R452.00.

**It is important to note that the subsistence allowance is only a guideline provided by SARS and is not legislated.

Travel Allowances

  • The rate per kilometer for reimbursive travel allowances has increased to 398 cents.
  • The rates per kilometre which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are outlined in the following SARS table:
Value of the vehicle (R)Fixed cost (R p.a.)Fuel cost (c/km)Maintenance cost (c/km)
0 – 95 00031 332105.837.4
95 001 – 190 00055 894118.146.8
190 001 – 285 00080 539128.351.6
285 001 – 380 000102 211138.056.4
380 001 – 475 000123 955147.766.2
475 001 – 570 000146 753169.477.8
570 001 – 665 000169 552175.196.6
665 001 and above169 552175.196.6

Foreign Income Exemption

A cap of R1.25 million per year has been placed on the exemption of foreign income earned by South African tax residents. Any foreign employment income earned over and above R1.25 million will be subject to tax for the particular year of assessment.

No changes were announced for the common payroll components of UIF and SDL.

If you have any questions relating to the above changes, you are welcome to email us at [email protected] to assist you with these queries.

The SimplePay Team

National Minimum Wage Increase

The national minimum wage rates, as specified in the National Minimum Wage Act, will increase by 3.8% from R20 per hour to R20,76 for employees. This minimum wage increase will be effective from 1 March 2020.

This means that the hourly rate will need to be changed for employees who are currently earning a wage lower than R20,76 per hour. To review or edit the hourly rate for employees, go to Employees > Bulk Actions > Regular Inputs and select “Basic Salary” and “Hourly Paid” under Filters.

This increase in the hourly rate will also mean an increase in the leave pay for hourly-paid workers as they will be paid extra when paid leave is taken. More information on leave pay can be found on our help site here.

Remember that a change in the ordinary hourly wage will also impact the rate for Sunday pay and public holiday pay. For more information on these, refer to our help page here.

Specific groups of workers will also have an increase in their national minimum wage of 3.8%, as shown below:

  • Farm workers: R18,68 per hour
  • Domestic workers: R15,57 per hour
  • Public works program: R11,42 per hour

Learnership Allowances

The learnership allowances per week for learners specified in Schedule 2 of the National Minimum Wage Act have also increased and come into effect on 1 March 2020. Please refer to page 2 of the Government Gazette found here for the allowances.

If you have any further queries regarding the impact of this Act on your payroll and on the system, please do not hesitate to contact us.

Team SimplePay