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Unemployment Insurance Fund Made Easy!

What is Unemployment Insurance Fund? Find out if you are entitled to UIF?

If you have employees working 24 hours or more in a month, it is your responsibility as employer to register yourself and your employee/s with the Unemployment Insurance Fund in order to avoid Unemployment Insurance Fund arrears at a later stage.

When an employee becomes unemployed for whatever reason, or are unable to work due to illness, maternity or adoption leave, they can claim for a few months from the fund, if their previous employer contributed to the fund. It the employer did not contribute they are facing Unemployment Insurance Fund arrears to be settled before the employee can claim any UIF.

The employer needs to contribute 1% of the employee’s salary and the employee also needs to contribute 1% of their salary. It is the responsibility of the employer to deduct the employee’s contribution and pay it over together with the employer’s contribution to the fund to avoid any UIF arrears. Always aim to be up to date with your payments!

Domestic employers and their workers are included in the Unemployment Insurance Act and Unemployment Insurance Contributions Act since the 1st of April 2003.

These acts apply to all employers and workers, with the exception to the following:

  • workers working less than 24 hours a month for an employer
  • learners;
  • public servants;
  • foreigners working on contract;
  • workers who get a monthly State (old age) pension; or
  • workers who only earn commission.

If you have a domestic worker working for you from before 1st of April 2003 and you did not pay UIF ever, you are liable to pay UIF from 1 April 2003.

If you as the employer did not pay UIF for a few years, you cannot deduct the 1% employee’s contribution now from the employee’s salary. You will have to pay your 1%, the employee’s 1% plus penalties and interests. Once the backlog has been settled you can now start paying over every month your and your employee’s contributions to the fund.

Pay Solutions have over 30 years experience in payroll and working alongside the Department of Labour in ensuring that UIF is calculated accurately and deducted correctly.

Disclaimer: The information published in this article or newsletter is of general nature and should not be used without obtaining specific advice as to its application in your business or under your specific circumstances. Pay Solutions will accept no liability if the information is used without first obtaining specific advice from the Department of Labour.