Unemployment Insurance Fund

• Unemployment Insurance Act, 2001 (the UI Act)

• Unemployment Insurance Contributions Act, 2002 (the UIC Act) These Acts provide for the benefits, to which contributors are allowed, and the imposition and collection of the contributions to the UIF, respectively, and came into operation on 1 April 2002.

Who is it for?

All employees, as well as their employers, are responsible for contributions to the UIF. However, an employees is excluded from contributing to the UIF if–

• Employed by the employer for less than 24 hours a month.

• Receives remuneration under a contract of employment as contemplated in section 18(2) of the Skills Development Act, 1998 (Act No.97 of 1998).

• Employed as an officer or employee in the national or provincial sphere of Government. • Entered the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic. If upon termination, the employer is required by law or by the contract of service, apprenticeship or learnership, or by any other agreement or undertaking, to send home that person, or if that person needs to leave the Republic.

• The President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature or

• A member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders.

What steps must I take?

Any employer, who is registered with SARS for Employees’ Tax, also needs to register to pay UIF contributions. The following employers must register at the UI Commissioner’s office for purposes of paying UIF contributions, an employer who:

• Doesn’t need to register with SARS for Employees’ Tax purposes

• Hasn’t voluntarily registered with SARS as an employer

• Pays or is liable to pay remuneration to an employee must contribute on a monthly basis to the UI Fund.

How much do you need to pay?

The amount of the contribution due by an employee, must be 1% of the remuneration paid by the employer to the employee. The employer must pay a total contribution of 2% (1% contributed by the employee and 1% contributed by the employer) within the prescribed period.