Unemployment insurance fund contributions (UIF)
UIF is based on remuneration and is payable by employees and employers. Every employer who for the purposes of PAYE (see ‘Administrative and tax related information; Payment of income tax; PAYE and SITE) must register with SARS must also register for the purpose of paying unemployment insurance contributions under the Unemployment Insurance Contributions Act 2002. The contributions are payable simultaneously with PAYE and the Skills Development Levy (see ‘Other taxes; Skills Development Levy’). With effect from 1 April 2003, domestic workers are specifically included as employees for UIF purposes.
The rate of contribution is 1% by the employer and 1% by the employee, and the employer is obliged to withhold the employee’s contribution and pay both amounts to SARS. The maximum contribution, with effect from 1 March 2008, is R249.56. The contribution is payable only on the first R12 478 of the employee’s remuneration and the balance is not subject to the contribution. For this purpose the term ‘remuneration’ has the same meaning as for PAYE purposes.
Various other administrative provisions, including submission of employees’ reconciliations, payment of penalties and interest, estimated assessments, objection and appeal etc in the Income Tax Act are made applicable to this Act as well.