The following information is based on the Department of Labour FAQ (referenced as the DoL FAQ going forward), published 30 April 2020.
The amount that will be provided to each employee ranges between a minimum of R3 500.00 and a maximum of R6 638.40. This is further explained at the top of page 5 of the DoL FAQ.
Calculating an Employee’s TERS Payout
On pages 5-7 of the DoL FAQ, they explain how to calculate the TERS payout amount for an employee, before taking into account employer additions.
Benefit amount = Daily income x Income Replacement Rate (IRR)
To calculate the benefit amount, the above formula must be used. How to calculate the daily income for your employee and their own IRR, are shown on pages 5* and 6 of the DoL FAQ above. However, note that, if your employee is paid R17 712 or more, then there is no need to follow this calculation, as the entitlement will be R6 638.40.
*At the base of page 5, the term “Yi” may lead to confusion as it is a different format to the worked examples found on page 6. If at all confused, we would recommend following the method shown on page 6, using the daily income for both the amount put into the IRR formula, and for the value which you multiply with the IRR.
Effect of Additional Payments from the Employer
According to the above DoL FAQ, the correct interpretation of employer contributions is that they will not affect the employee’s benefit amount, unless the reduced salary and the TERS benefit amount would result in the employee receiving more than their normal remuneration if there were no lockdown.
For further explanation of this please refer to Page 7 of the DoL FAQ.