Updated on 7 July 2017 with information about uFiling issues
You might have heard about an increase regarding the Unemployment Insurance Fund (UIF). We would like to provide some clarity on this issue, which seems to have been creating some confusion.
There has, in fact, been an increase. However, this increase has been to the limit that must be used by the UIF to calculate benefit amounts – not contributions. With effect from 1 April 2017, the monthly limit for calculating benefits has been increased from R14,872 to R17,712, as per the Minister of Labour’s notice in the Government Gazette (of 17 March 2017). The corresponding new annual and weekly limits for calculating benefits are R212,539 and R4,087, respectively.
As far as the monthly limit for contributions goes, it has not been changed yet. Therefore, SimplePay must still apply a monthly limit of R14,872 to UIF contributions calculated on the system. As a result, the maximum monthly contributions remain R148.72 for the employee and the employer. This is in line with information received from SARS and opinions expressed by well-known tax experts.
Before any changes can be made to the system, the Minister of Finance has to announce an increase to the limit that must be used when calculating contributions. Currently, there is no indication of when such an announcement will be made, and until such time that an announcement is made, the limits for calculating benefits and contributions will remain out of sync. As soon as an increase to the contribution limit is announced, the system will be updated to ensure that you remain compliant.
Even though SARS and SimplePay are correctly using the existing monthly contribution limit of R14,872, it has come to our attention that uFiling is applying an erroneously updated limit of R17,712. This has already been reported to the UIF Commissioner, and they are busy investigating and working on fixing this issue.
SimplePay users can use our direct submission function, which sends an electronic file to the UIF that bypasses the incorrect calculations being performed by uFiling. More information can be found here.
If you have any questions, you are welcome to email us at [email protected] to assist you.
The SimplePay Team