Generally, if an employee has a very simple payslip, with only a basic salary for example, the UIF and SDL amounts will be the same. However, there are certain circumstances in which these amounts will differ – this is because UIF is calculated on an amount known as remuneration for UIF purposes while SDL is calculated on remuneration for SDL purposes.
- Remuneration for UIF purposes is the employee’s total remuneration, less any exclusions. The most notable exclusion from UIF is commission.
- Remuneration for SDL purposes is generally the same as remuneration for PAYE purposes, namely the employee’s total remuneration less any taxable income deductions, such as from retirement funds. Sometimes, however, additional SDL exclusions will apply.
The two most common reasons for a difference in UIF and SDL are, therefore, that the employee:
- Earns commission, which is UIF exempt, as well as their basic salary / hourly pay; and / or
- Has a retirement – pension / provident / retirement annuity – fund, which gives rise to a taxable income deduction.
You can view what income is included in the UIF calculation and SDL calculation by viewing the UIF trace and SDL trace respectively.
More information on all of the above concepts, as well as the UIF and SDL trace, can be found in the following articles: