How to Deduct UIF From Salary in South Africa? Check out How uif Contribution Calculated using uif Calculator to get amount to be deducted from employee salary.
What Is UIF Deduction?
UIF deduction is a mandatory payroll contribution collected to support workers who may need benefits such as:
- Unemployment benefits
- Maternity benefits
- Illness benefits
- Adoption benefits
- Dependants’ benefits
The money is paid into the Unemployment Insurance Fund.
Who Must Pay UIF?
The Unemployment Insurance Act and Unemployment Insurance Contributions Act apply to all employers and workers, but not to –
- workers working less than 24 hours a month for an employer;
- learners;
- public servants;
- foreigners working on contract;
- Employees in receipt of an old age pension are, since 07/2/2007, no longer excluded from contributing towards UIF; or
- workers who only earn commission.
Domestic employers and their workers are included under the Act since 1 April 2003.
Contributions Payable
The contribution that employers must deduct from a worker’s pay is 1% of the worker’s total earnings, excluding commission. In addition to the 1% deducted from the worker, the employer also contributes 1% for every worker that they employ. The total contribution paid to the UIF is therefore 2%.
Example:
If a worker earns R1 000 per month, the employer must deduct 1%, namely R10. In addition, the emloyer must pay R10 for that worker. The total of R20 must therefore be paid to the UIF or SARS.
Earnings Ceiling
Workers who earn more than the annual, montly or weekly maximum earnings ceiling must also contribute to the Fund, but their contributions are worked out on the maximum earnings ceiling.
Example:
If a worker earns R10 000 per month and the monthly earning ceiling is R1 096 per month, the worker’s contribution will be worked out on R8 836.
What employers may not do
Employers may not –
- deduct more than 1%;
- deduct outstanding amounts when they fall behind with payments; and may not
- ask a fee for deducting the money.
If employers deduct too much money by accident, they must pay the extra money back to workers.
Based on Legislation in Section 6 and Section 7 of the Unemployment Insurance Contributions Act
Payment of Contributions
Employers must pay the 1% they deducted from workers, together with the 1% they have contributed, to the UIF or SARS before the 7th of every month.
Example:
Contributions due for January, must reach the UIF or SARS on or before 7 February. If the 7th day of a month is not a business day, employers must pay on or before the last business day before the 7th. “Business day” means any day that is not a Saturday, Sunday or Public Holiday. Based on Legislation in Section 8, Section 9, of the Unemployment Insurance Contribution Act
Frequently Asked Questions (FAQs)
How much is deducted for UIF?
Employees contribute 1% and employers add another 1%.
Who pays UIF in South Africa?
Both employees and employers contribute.
How do I calculate UIF deduction?
Multiply salary by 1%.
Is UIF mandatory?
Yes, for most employees and employers.
What is the total UIF contribution?
The total combined contribution is 2%.
Can employers deduct more than 1%?
No, employee deduction should be 1%.
Where are UIF payments submitted?
Through the UIF system or uFiling.
Who manages UIF?
The Unemployment Insurance Fund in South Africa.
What happens if employer does not pay UIF?
They may face penalties or legal action.
Can foreign workers contribute to UIF?
Yes, many legally employed foreign workers qualify.
