Our blog post today bears the news that the increase of the UIF contribution ceiling has come into effect. From 1 June 2021 onwards, your employees will be required to contribute 1% of their remuneration to the UIF, up to the new cap of R17 712 per month.
The increase of the UIF contribution ceiling has been in the works for quite some time and was in-fact initially planned to take effect from 1 March 2021.
Due to a lack of notice and the procedural incorrectness of announcing the increase during the budget speech 2021, the initial due date was scrapped to allow for further input and suggestions.
A public comment period was opened which ended on 31 March 2021, but no date of the impending change was ever stated by the UIF.
On 28 May 2021 it was announced that:
- The UIF contribution ceiling has been increased from R14 872 to R17 712;
- Effective from 1 June 2021.
The monthly contributions limit value is now the same as the monthly benefit limit value, and should help to maintain the stability of the UIF.
Despite the short notice, we have implemented the changes to our system today (1 June 2021).
- If you have already finalised payslips for June 2021, the changes to the contribution ceiling will not be reflected and we would recommend unfinalising and then re-finalising the affected payslips. We apologise for the inconvenience this causes. If you have already paid your employees for these payslips, please save a copy of all payslips prior to unfinalising them. The difference between the nett pay on the new payslip and the old payslip will need to be recouped from the employee. If you have already finalised your EMP201 and UIF Declaration, these will be regenerated and you will need to resubmit them if this has already been done.
- If you have not yet finalised payslips for June 2021, no action on your part will be necessary to effect any of the changes to your payroll. We have run comprehensive testing on the change, but please check that you are happy with your payslips before you submit them.
Should you have any question regarding this change, please feel free to contact [email protected] for assistance.
You can also view some of our related help pages:
At the onset of the COVID-19 pandemic, we worked swiftly to bring you solutions to new payroll challenges that arose. One of these was the introduction of the pre-populated individual UI-19 form (announced here), saving you the inconvenience of having to fill out these forms manually. We’ve now introduced an override option for the Total (Gross) Per Month field, so you can further tailor the form to your employees’ circumstances, if necessary.
The Total (Gross) Per Month should contain the value of the employee’s regular remuneration subject to UIF, and as such, the field is pre-populated with the gross remuneration earned by the employee in the month prior to the month of termination. This is because remuneration from the month of termination is often distorted, due to pro-rata earnings, leave paid out, severance pay and other transactions that arise as a result of termination. The prior month’s earnings therefore have a higher probability of accurately reflecting the employee’s regular earnings.
To cater for employees whose earnings fluctuate frequently or whose month prior to termination was abnormal, the new override option gives you the flexibility to enter the gross remuneration that best reflects the average earnings of the employee. You can make use of the payslip items on the Transaction History Report generated by SimplePay or the Income Subject to UIF in the UIF Trace (outlined under the UIF Contributions heading here) when determining this figure. Alternatively, you can contact the UIF if you are uncertain.
To make use of the override option, follow these steps:
- Click on Manage End of Service for an employee whose service has already been terminated on the system
- Under Service Period History, click on Termination Certificate Inputs
- Enter the monthly remuneration amount into the Override Gross Remuneration (UI-19) field
- Click Save
It’s that simple! The individual UI-19 form will now reflect the gross remuneration that you entered.
For more information on terminations, the following help articles are available:
If these help articles do not solve your query and you need further assistance, please reach out to our support team.
Not a SimplePay client? All of the forms and functionality covered in this blog post and on our help site are only available to SimplePay clients. The good news is that we offer a 30 day free trial and sign up is a breeze! You can find out more and sign up for a trial here. Come and experience the joy of stress-free payroll.
In February, the Finance Minister announced a proposed reform that would see the UIF earnings cap reduced to R1000. This essentially means that no matter how much anyone earns, UIF deductions would only be calculated from a maximum amount of R1000.
In other words only 1% of R1000 would be deducted from an individual’s salary – R10! Added to that, should anyone earn below R1000 then only 1% of that pay would be reserved. Whereas currently for a person earning R5000, the UIF deducted would be R50. It is clear to see that this proposed plan would be favourable to every employee and employer. Employers are also required to put up an equivalent UIF amount for each worker, thereby making the overall contribution 2%.
The minister faced opposition and a result this reform has now been postponed to provide time for further public consultation.
A new effective date has not been specified but it is unlikely to be any sooner than a year’s time.
As always, please contact us if you have any questions.