The Unemployment Insurance Fund gives short-term relief, in the form of monetary assistance, to workers if they become unemployed or are unable to work because of maternity leave, adoption leave, commissioning parental leave, parental leave or long-term illness. Such assistance is also available to the dependants of a deceased contributor.
Contributions vs Benefits
It is important to distinguish between UIF contributions and UIF benefits:
- UIF contributions: Amounts deducted from each employee’s payslip by the employer and paid over to the Fund on behalf of the employee.
- UIF benefits: Amounts paid to individuals from the Fund as relief for periods that they are unemployed or unable to work.
SimplePay calculates the UIF contribution for each payslip and provides the relevant filing documents required for the contribution. You can read more about monthly submissions on the following page:
SimplePay also generates the individual UI-19 form and UI-2.7 form that can assist with the application for UIF benefits. However, we are in no way involved in the UIF benefits process. Please refer all benefit queries to the Department of Labour.
Information on UIF benefit applications can be found in the following article:
For more information on the UI-19 and UI-2.7 forms, refer to the following help article:
Please note: In 2017, the UIF benefit threshold was increased to R17 712. However, the UIF contribution threshold remains at R14 872.
UIF is calculated as 2% of an employee’s remuneration for UIF purposes, split evenly between the employee and employer, i.e. 1% contributed by the employee and 1% contributed by the employer.
Remuneration for UIF purposes is the employee’s remuneration, less certain exclusions such as commission, and is subject to a monthly income cap of R14 872. The maximum UIF contribution for each party is, therefore, R148.72 a month (R297.44 in total)*. For employees who are paid at more regular intervals (e.g. weekly), this cap will be apportioned across their pay periods – this may lead to slightly lower UIF contributions in the last pay period of the month.
The total UIF contribution (employee + employer) must be paid monthly based on the amounts contained in the EMP201 and UI-19. More details on these concepts can be found in the following section:
*For more information on how the UIF cap is applied to employees who are not monthly paid, please see this FAQ page.
The UIF trace provides you with information on how the UIF contribution is calculated for an employee. To view the UIF trace, go to an employee’s profile and navigate to the relevant payslip. Open the web view for the payslip by clicking on More next to Preview (draft payslips) / View (finalised payslips).
Click on UIF – employee or UIF – employer to view the UIF trace. You can then drill further down into the calculation by clicking on Income subject to UIF to view how the income subject to UIF is determined.
Exemption from UIF
UIF contributions must be made for all employees unless they are expressly excluded by the relevant legislation:
- employees employed by the employer for less than 24 hours a month;
- a foreign worker who will be leaving the Republic at the end of their contract of service, apprenticeship or learnership (no longer valid from 1 March 2018);
- a learner employed and remunerated under a contract of employment as contemplated in Section 18(2) of the Skills Development Act (no longer valid from 1 March 2018); or
- the President or any Member of Parliament or in any sphere of government.
Independent contractors who are deemed to be employees will also be exempt from UIF contributions. Please see the following section for more details:
Section 5 of the Unemployment Insurance Contributions Act states that every employer and every employee must contribute to the Unemployment Insurance Fund, provided that it applies to them. This means that UIF is calculated per source of income. Therefore, if an employee works for multiple employers, they must pay UIF with each employer, even though the cap may be reached with one employer.
For example, if an employee works at two different companies and each company pays them R20 000, they will contribute R148.72 per month to the UIF from each salary (i.e. a total of R297.44 would be contributed per month). Their contribution is not limited to a cap of R148.72 across all sources of income.
If the employee were to become retrenched with both companies, they would be able to claim UIF in respect of their employment at both companies (i.e they receive 2 benefit payments).