Repo Rate and Employer Loans Interest Rate Cut

Update 29 July 2020: We have updated the system to reflect the changes to employer loans benefit calculations. All employer loans on payslips dated from 1 August 2020 will make use of the new interest rate. As our system is built to be intuitive, any payslips dated before 1 August 2020 will make use of the previous interest rate.

In a historic, yet somewhat expected announcement, the Monetary Policy Committee has cut the repurchase rate (repo rate) by 25 basis points. This brings the repo rate to an all-time low of 3.50% per annum, effective as from tomorrow (24 July 2020).

The official interest rate, which is used to calculate employer loan benefits, is set at 1% above the repo rate. The new official interest rate will therefore be 4.5% per annum, effective 1 August 2020. Although the change in the repo rate is effective tomorrow, income tax legislation prescribes that changes in the official interest rate only occur at the start of a new month.

Being a SimplePay client means that you’ll benefit from updates to the system without having to install these updates or make any manual changes to your settings. You simply process payroll as normal and our system will use the correct official interest rate for the period of the payslip. Our development team are busy making the necessary system updates for the latest interest rate change and we’ll let you know as soon as they’re ready. This means that you should not yet finalise payslips for August for those employees with outstanding employer loans.

For more information on employer loans, head to our help page.

Not yet a SimplePay client but want to experience seamless payroll no matter what changes in legislation or policy occur? 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.

Team SimplePay

New Feature: EMP201 Breakdowns and Variances

If you’re managing a business or department, you know the importance of tracking variances and maintaining an audit trail. Similarly, if you manage the submissions to SARS, it is important to be able to track any changes to your payroll which impact your submission and resubmit if necessary. What if there was a way to make these easier? Well now there is! Introducing the expanded EMP201 web view.

In a previous blog post, we introduced the ETI breakdown, accessible from the EMP201 web view. We have now applied the same concept to other areas of the EMP201, with breakdowns available for PAYE, SDL and UIF. 

Each breakdown shows a list of your employees and the total PAYE, SDL or UIF calculated for each employee. 

Remember, you can view the PAYE, SDL and UIF trace for each employee by going to their profile (announced in this blog post).

We have also created a variance feature for months where more than one EMP201 has been generated. Remember, if you make changes to your payslips after your EMP201 is finalised, a new EMP201 is generated so that you have a clear audit trail for resubmitting to SARS if needed. The breakdowns for any updated EMP201s now also show the differences between the PAYE, SDL, UIF and SDL in the updated EMP201 compared to the previous EMP201. The differences are shown per employee and the total difference is shown at the bottom of the breakdown.

We hope you love this new functionality and the benefits that it provides.

Need more information? The following help articles may be useful:

Not a SimplePay client? The EMP201 form and all 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.

Team SimplePay

New SARS Code and System Item for Disaster Relief Funds

There are several organisations outside of government, such as the South African Future Trust (SAFT), providing COVID-19 relief funds for employers to keep paying their employees. The relief is usually offered in the form of a loan to employers and is paid directly to employees. To assist with the special tax treatment and reporting requirements for these payments (see below), SimplePay has created a new system item: COVID-19 Disaster Relief.

Tax Treatment

As outlined by the Disaster Tax Relief Bill, these payments are not included in remuneration for PAYE, SDL and UIF and therefore are not subject to tax. Although these payments are not included in remuneration for PAYE, SDL and UIF, they are included in remuneration for the purposes of calculating ETI.

Reporting on Tax Certificates

SARS has created a new tax code, 3724, for reporting these payments on IRP5s/IT3(a)s. This is outlined on the SARS website here.

Using the COVID-19 Disaster Relief System Item

To make use of the new system item created by SimplePay:

  1. Go to an employee’s profile
  2. Click on Add next to Payslip Inputs
  3. Under Other, select COVID-19 Disaster Relief
  4. Enter the Amount of the relief paid to the employee
  5. Click Save

You will notice that the payment is listed on the payslip as a Benefit and does not impact the Nett pay payable to employees. This is because the relief payments are made directly to employees by the organisation. The system item is simply used for satisfying the tax and reporting requirements and not to facilitate payments.

These details are also outlined in our help page here.

Should you need further assistance, please contact our support team.

Team SimplePay

Form UI-2.7 for Employees Terminated with Codes 9, 10, 17, 18 or 19

We recently introduced the functionality to download pre-populated individual UI-19 forms for employees so that you do not need to manually complete these. We have now expanded this functionality to generate UI-2.7 forms alongside individual UI-19 forms. These are applicable to employees that remain employed with the company, but are terminated on the system using the following UIF status codes:

  • 9 – Maternity
  • 9 – Adoption 
  • 10 – Long-term leave due to illness
  • 17 – Reduced Working Time
  • 18 – Commissioning Parental
  • 19 – Parental

When selecting one of these codes, two additional fields will appear:

Expected return date: This is the date that you expect the employee to return to work. It is imperative that this is completed correctly, as it is used to generate the UI-2.7 form. If the employee’s date of return is later extended, you will need to update it here in order to update the UI-2.7 form.

Paid During Temporary Absence: If you select this checkbox, the system will still generate payslips during the employee’s period of absence, and no UI-2.7 form will be available. If you do not select this checkbox, no payslips will be generated for the employee during their period of absence and a UI-2.7 form will be generated for the employee. 

To download the UI-2.7 form generated by SimplePay:

  • Go to the employee’s profile after ending their service.
  • Click on Manage End of Service.
  • Click on the PDF icon under Service Period History.

The first page of the PDF document will be your UI-19 form and the second page is the UI-2.7 form.

For more information on ending an employee’s service, visit our help site here.

Team SimplePay

Update to TERS Application Channel

Over the past few weeks we have made multiple mentions of how employers should apply by email for the COVID-19 Temporary Employer-Employee Relief Scheme (TERS) benefit. We received an update today, 16 April, that this method of application is no longer available. 

Employers should now make use of a new online method on the Department of Employment and Labour website.

Through this new application process, employers will still be able to submit the same CSV file generated by SimplePay, which was previously used when applying via email. More information on downloading this CSV file can be found on our COVID-19 TERS CSV Export Help page.

Please note: We are currently waiting on feedback about an error with this new online application when the CSV file doesn’t contain the employee’s Termination Date. It would be best to wait a few days before making use of this online application process whilst any errors are being corrected with their system.

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

If your question is related to a step within the application process, or an error that has occurred within the process, we would encourage you to follow this up on the TERS hotline, on 012 337 1997.

Keep well. Stay home. Stay safe.

Team SimplePay

Support for the Tourism and Industrial Sectors

Update 14 April: Further information on the application process for the Tourism Relief Fund

Support for Tourism Industry

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 may also notify you of these by email and system notifications.

In light of the constraints put upon the tourism and hospitality sectors in order to flatten the curve of the spread of COVID-19, the Department for Tourism has been granted an additional R200 million to assist Small, Medium and Micro-sized Enterprises (SMMEs) in these sectors. This relief is provided in addition to the other support opportunities that non tourism specific SMMEs can take advantage of. Details of general SMME relief schemes can be found in our previous blog on Support for Businesses.

The Tourism Relief Fund will be allocated to SMMEs across all 9 provinces and various tourism sub-sectors, providing a once off grant of up to R50,000 per company. To be considered, an application must be submitted by 31 May 2020. A degree of preference will be given in favour of rural areas, townships, women, young people and people with disabilities.

Funding will be balanced between both businesses which are supported by programs, such as the tourism incentive program, and businesses that are not benefiting from any programs. This will be done via the prospective application process.

Businesses can apply if they fall into one of the following categories:

  • Accommodation: Hotels; Resort properties and Bed and Breakfast (B&B’s)
  • Hospitality and Related Services: Restaurants (not attached to hotels); Conference (not attached to hotels), Professional catering; Attractions
  • Travel and Related Services: Tour operators; Travel agents; Tourist guides; Car rental companies; and Coach Operators.

Qualifying Criteria

In order to be eligible to apply for funding, the following criteria must be met:

  • Formally registered business with Companies and Intellectual Property Commission (CIPC).
  • Turnover must be below R2.5 million per year.
  • Have a valid tax clearance certificate or PIN.
  • Proof of minimum wage compliance.
  • Provide proof of UIF registration for employees employed by the business.
  • Be an existing tourism-specific establishment as outlined in the scope of application; this being falling within the sub-sectors of Accommodation Establishments, Hospitality and Travel Related services, as mentioned above (suppliers and intermediaries are not eligible).
  • Must be in existence for at least one business financial year.
  • Prove that the relief is required as a result of the impact of COVID-19.
  • Must submit statements of financial position; this can be done via balance sheet, income statements, cash flow statements.
  • 6 months’ bank statements need to be submitted.
  • Indicate the intended use of the grant.

How to Apply

The application process can be done by following the following steps:

  1. Go to www.tourism.gov.za
  2. Either complete the application form on the website, or download the application form and complete it. *Every section of the application form must be completed in order to be considered.
  3. If you have completed the application online, you must provide send the supporting documents via email; or alternatively if you have downloaded the application form, send this along with the specified documents to [email protected]
  4. You will receive an automated response

Required Documentation

Alongside the application form, here is a list from 14 April of documents required:

  • Registrations certificate issued by CIPC
  • Certified ID copies of the Directors/Members
  • 6 months banks statements
  • Latest annual financial statements – income, cash flow and financial position
  • Business profile, being 2-5 pages maximum
  • Relevant industry certification – depending on business focus area
  • Latest UIF/U-filing contribution certificate
  • Tax clearance certificate or pin
  • Proof of compliance with minimum wage requirements
  • Grading certificate or proof of application to be graded
  • Certificate of B-BEE or Affidavit
  • Proof of UIF registration for employees employed by the business
  • Medical certificate for persons with disabilities where applicable

Upon submission, the Department of Tourism aims to process each application within 30 working days and successful applications should receive funds within 7 working days after approval. This relief is only available to South African citizens. 

Should you have any further queries there is a dedicated line provided by the Tourism Services call centre on 0860 868747. Additional information can also be found on the Department for Tourism web page, or the South African Tourism site.

Support for Industrial Sector Businesses

IDC COVID-19 Essential Supplies Intervention

In Ebrahim Patel’s speech on behalf of the Department of Trade, Industry and Competition, he mentioned a package of more than R3 million to help aid the industrial sector. This package, put together by the Industrial Development Corporation (IDC) is aimed at addressing the situation of vulnerable firms and to fast-track financing for companies critical to the efforts to fight the virus and its economic impact.

If your company has been effected in one of the following ways, you could apply for funding:

  • Supply chain interruptions ​
  • Access to raw materials – cost and quality ​
  • Access to markets – perishable products lost in transit due to longer delivery periods​
  • Working capital disruptions – longer lead times ​
  • Market loss – e.g. export markets constrained by logistics or replaced by production
  • Surge of imports to address the spike in demand​
  • Underperforming budgets – impact of extended downtime ​
  • Reduced Productivity – employees wellbeing: physical and psychological ​

Applications can be made on the IDC website and the qualifying criteria and documents required can be found within this document.

Working Capital Support

R700 million has been earmarked to suppliers of identified critical goods that are affected by the outbreak of COVID-19. Funding will be provided to companies for the acquisition and/or manufacturing of essential supplies on an urgent basis. A list of the relevant supplies to date is listed here for ease of reference:

  • Bulk supplies of disinfectants and sanitizers;
  • Accredited masks;
  • Accredited test-kits;
  • Medical Gloves;
  • Packaging (bottles, caps, pumps, sachets etc);
  • Sanitisers (hand or industrial);
  • Toilet Paper, Wipes, Tissue Paper, Sanitary Pads;
  • Cleaning materials;
  • Chemicals;
  • Approved drugs;
  • Ventilators and filters;
  • Nebulisers and nebulising agents;
  • Hospital beds;
  • Oxygen;
  • Aprons;
  • Safety Visors;
  • Raw materials to manufacture essential products;
  • Urgent regulatory and compliance testing of products or treatments if required.
  • Products for care of babies and toddlers;
  •   Personal toiletries, including haircare, body and face wash, roll-ons, deodorants, toothpaste

Even if the items your company produces is not on the list, it may be in the future as the list is constantly being updated. Alternatively, if your company has a track record of making comparable products, then you may still be able to secure funding, provided that your company is capable of delivering on the contract in terms of capacity, resources and experience.

As above, the application can be made on the IDC website and the Qualifying criteria and documents required can be found within this document.

A useful page for sector specific support, post investment support and the IDC’s corporate social investments can be found here

What Funding is Available?

There are various forms of funding available under the scheme, but each is limited to a 3 month term. Examples of the instruments available include:

  • Short term loan for once off- contract or import funding
  • Revolving Credit Facility
  • Guarantees to banks for banking facilities, imports, ordering requirements

IDC loans are made at a rate of prime +1% and Manufacturing Competitiveness Enhancement Program (MCEP) loans are available at prime +2.5%. Guarantees are made at a flat rate of 2%.

To reiterate, applications can be made on the IDC website, here.

NOTE: You may find it useful to reach out to the incentives you believe may be relevant to you, as listed in this document. They will likely be able to give further guidance on your applicability for the various schemes available.

Keep well. Stay home. Stay safe.

Team SimplePay


COVID-19 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]

Update 21 April: The Department of Employment and Labour has opened a dedicated UIF toll free hotline, running 8am – 10pm Monday to Friday. The number is 0800 030 007.

7 April 2020: Closure of the labour offices for in person applications. Rechannelling  of applications to interactive methods.

Update 3 April: Functionality has been added for the production of individual UI 19 forms.

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 glad to inform you that we have now also created the individual version of this form, which employers will be able to complete and provide to their employees to claim the UIF benefit.

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]

COVID-19 Lockdown – Support For Business

Update 3 April:A resource which may be of use to you is the “Disaster Management Tax Relief FAQ’s”, created by SARS. Contents of note within this document are:

  • An outline of the requirements to be able to claim employee’s tax relief
  • An outline of the expansions made to the Employment Tax Incentive (ETI)
  • A worked example of how the 20% PAYE tax deferral will work

Please note that there is also information on provisional tax deferral. We regret to inform you that this is beyond our scope of services and so we are not able to assist with this scheme.

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

Update 21 April: The Department of Employment and Labour has opened a dedicated UIF toll free hotline, running 8am – 10pm Monday to Friday. The number is 0800 030 007.

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 glad to inform you that the new functionality providing UI-19 forms for individuals is now live. 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.

7 April 2020: Closure of the labour offices for in person applications. Rechannelling  of applications to interactive methods.

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 submitted to the UIF. Claims can be done online once the employee has registered, or via email or fax, details listed on page 7 of the Easy Aid Guide. The UIF processing centres are now closed over lockdown and cannot be used. 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 submitted to lodge 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]