Lockdown Recap and FAQ #1
Update 23 April: We have received confirmation that the TERS benefit paid by employers to their employees will not be subject to PAYE, SDL or UIF. You may pay this amount off-system if you choose, but we recommend waiting until we have updated our system to include a new TERS benefit item. We will send out a notification when the system has been updated.
Update 21 April: The Department of Employment and Labour has opened a dedicated UIF toll free hotline, running 8am – 10pm Monday to Friday. The number is 0800 030 007.
Update 8 April: FAQ related to the implementation of the 20% tax relief updated.
Update 7 April: Closure of Labour offices for in person UIF applications. Updates made to the FAQ’s, UIF & TERS in Particular.
It’s the end of day 8 of the Lockdown in South Africa and the end of our first full week working under the new conditions, circumstances and regulations. We have all been overwhelmed and humbled by the responses we have received to our blogs and customer support, thank you!
We unfortunately don’t have capacity to respond to every comment individually so instead we have reviewed them all and grouped them in order to address the most common queries here in the inaugural Weekly Lockdown Recap and FAQ.
We have uploaded the FAQ into this blog, making it more accessible for you. Further to this, we shall be implementing formatting to make it easier to search for your related question.
Frequently Asked Questions
What relief measures exist for businesses and their employees?
Measures for Businesses
The Government has announced several relief schemes and initiatives in an attempt to support South African businesses through the Lockdown period. We briefly discussed these in our COVID-19 Lockdown – Support For Business post on 30 March. In a nutshell, the following options exist at the time of writing:
- Expansion of the Employment Tax Incentive (ETI);
- The COVID-19 Temporary Employer-Employee Relief Scheme (TERS);
- Deferred tax liabilities for certain businesses on which SARS has published a Disaster Management Tax Relief FAQs document
- Contents of note within this document are:
- An outline of the requirements to be able to claim employee’s tax relief
- An outline of the expansions made to the Employment Tax Incentive (ETI)
- A worked example of how the employees’ 20% tax deferral will work
- Please note that there is also information on provisional tax deferral. We regret to inform you that this is beyond our scope of services and so we are not able to assist with this scheme.
- Contents of note within this document are:
- Various financial support and relief measures for SMMEs, including;
- Debt Relief Finance Scheme; and
- Business Growth and Resilience Facility.
Measures for Employees
The options available for employees were discussed in our first COVID-19 Lockdown Blog, published on 26 March, as well as being outlined in the email we sent out on the same date. To recap:
- Healthy employees may be put on annual leave or have their service ended with code 17 if the time off must be unpaid.
- Employees who are ill with COVID-19 are entitled to 14-day UIF Illness Benefit and should have their service ended with code 10.
- Employees who are ill with anything other than COVID-19 are treated as usual, i.e. they must be put on sick leave, or annual or unpaid if there’s no sick leave left.
- Employers are also always able to grant employees additional paid leave should they wish to do so.
You can find a handy overview of the forms and contact details required for the various UIF claims in our COVID-19 UIF Quick Reference Guide.
As an employer, how do I know whether to apply for UIF or TERS?
Update 21 April: The Department of Employment and Labour has opened a dedicated UIF toll free hotline, running 8am – 10pm Monday to Friday. The number is 0800 030 007.
Update 16 April: The email application is now obsolete. A new online application is now available. Read more here.
With Labour centres across the country being closed during the lockdown, the UIF’s capacity to process individual employee claims is under severe pressure. With this in mind, we’ve been advised that all employers who are able to apply for the COVID-19 TERS benefit, rather than having employees claim UIF, are urged to go the TERS route instead.
This will effectively allow for consolidated claims rather than many thousands of claims from individual employees, which will hopefully reduce strain on the UIF and allow for some measure of effectiveness in paying out benefits.
The TERS benefit (Temporary Employer-Employee Relief Scheme) is to be submitted by the employer via an application process that is conducted via email. This involves signing the MOA, submitting relevant payroll information and setting up a dedicated bank account for these benefits, or clearing an existing bank account for this purpose. The monies are then paid into the employer’s account to be distributed to the employees. These submissions are done via email or fax, and the employer may assist employees in processing these claims. In this case though, payments are made directly to the employees, and not through the company.
For any queries more detailed than this, we still recommend contacting the UIF free hotline on 0800 030 007 or TERS phone line on 012 337 1997.
You can read more on our interpretation of the general rules around UIF and TERS in the following blogs:
- COVID-19 Lockdown – 27 March to 16 April 2020
- COVID-19 UIF Quick Reference Guide
- Support for Business – COVID-19 TERS
Please note that all of the above is intended for informational use only. It merely represents our interpretation of the options based on our own reading and consultation with labour experts. We ourselves are not labour experts and, as such, cannot offer advice for specific businesses’ situations. Additionally, as with everything at the moment, these things appear to change and get updated daily so we would strongly advise that you contact the UIF or TERS hotlines and / or a labour lawyer or other labour practitioner.
My business is closing temporarily during lockdown, what UIF code should I use?
It is possible to claim UIF for employees for temporary closure of your business, however this requires that each employee has an individual application completed.
To the best of our knowledge and based on advice we’ve received, it seems that wherever possible, employers are encouraged to apply for TERS rather than having employees go through UIF. The employer will then distribute the allowance to their employees.
This will effectively allow for consolidated claims rather than many thousands of claims from individual employees, which will hopefully reduce strain on the UIF and allow for some measure of effectiveness in paying out benefits.
For any queries more detailed than this, we still recommend contacting the UIF or TERS phone lines.
My employees will be working reduced hours and need to claim UIF, which code do I use?
It is possible to claim UIF for employees due to temporary closure of your business, however this requires that each employee has an individual application completed.
To the best of our knowledge and based on advice we’ve received, it seems that wherever possible, employers are encouraged to apply for TERS rather than having employees go through UIF. The employer will then distribute the allowance to their employees.
This will effectively allow for consolidated claims rather than many thousands of claims from individual employees, which will hopefully reduce strain on the UIF and allow for some measure of effectiveness in paying out benefits.
For any queries more detailed than this, we still recommend contacting the UIF or TERS phone lines.
I have employees who are ill as a result of COVID-19 and need to claim UIF, which code should I use?
Employees who are ill due to COVID-19 are entitled to claim a special illness benefit through the UIF. When ending their service, please use code 10.
For details on ending an employee’s service on SimplePay, please see our help site. Please remember to also capture the anticipated reinstatement date at the same time so that we can generate a complete individual UI 19 for each employee.
More information on UIF codes is available in our COVID-19 UIF Quick Reference Guide.
My business is having to close down completely and will not reopen after lockdown. Which UIF code should I use for my employees?
In cases where your business unfortunately has to cease trading entirely and will not reopen after lockdown, you should use code 14 when ending employees’ service.
For details on ending an employee’s service on SimplePay, please see our help site. Please remember to also capture the anticipated reinstatement date at the same time so that we can generate a complete individual UI 19 for each employee.
More information on UIF codes is available in our COVID-19 UIF Quick Reference Guide.
I don’t know which UIF code to use – please help!
If none of the above FAQs on UIF codes fit your situation or prove helpful, or if you’re still even just slightly unsure, please get in touch with your provincial UIF office or the general UIF hotline. Alternatively, you can seek advice from a qualified labour practitioner.
As much as we would love to be able to spare everyone a call to the UIF, we unfortunately cannot provide specific advice as we are not labour experts. In our dealings with them during the crisis though, they have been very helpful and efficient throughout. The contact details can be found further down in this post.
I am an employee, will I be able to claim UIF because of COVID-19?
In terms of legislation and all the guidance provided by Government so far, the UIF appears to be the main source of relief for employees. However, your eligibility to claim will depend on a few things related to your employer’s compliance with UIF requirements. Your employer will also first have to ensure that they have generated the necessary forms to enable you to claim.
As we simply provide software to employers, we are unfortunately not able to assist employees with their claims. Please contact your employer directly for any queries in this regard.
The UIF requires certain forms to be completed by or stamped by the bank – how do I do this during lockdown?
Banks have been classed as essential services so they are open during the lockdown. We would however strongly recommend that you call or email your bank instead of going into a branch to see if they can assist. Many banks offer stamped bank statements through online banking and should hopefully be able to assist with forms and statements via email.
We have also been advised that the UIF will likely accept statements that are not stamped as long as stamped versions can be provided at a later date.
As with most of the information we’re providing at the moment, we would encourage everyone to get in touch with the relevant organisations (in this case your bank and the UIF) to confirm processes and requirements before trying to submit claims.
The Department of Labour has stated that I, the employer, can complete the application on my employee’s behalf; How do I do this?
Once all the relevant documents have been completed for the employee, rather than transferring them to the employee, you must email all the required documents to the nearest UIF Processing centre to you. This can be found on page 7 of the UIF Easy Aid Guide.
How do I calculate the benefit I / my employees will receive from the UIF?
Unfortunately, this isn’t something we’re able to provide a clear answer on. The UIF calculates benefits based on a formula, which, amongst other things uses a sliding scale based on an employee’s income bracket.
Here again, we unfortunately have to advise that you contact the UIF directly to try and get an estimate or the exact formula for the calculation. As mentioned in other FAQs, they have generally been efficient and helpful in our phone interactions with them. Alternatively, you could consult a labour practitioner who will likely have more insight into this than we do.
Who do I contact for assistance with UIF and / or TERS?
There are a few different options for contacting the relevant people at the Department of Labour:
- Dedicated TERS Hotline: 012 337 1997
- UIF Call Centre: 0800 UIF (0800 843 843)
- UIF Provincial Rapid Response teams (for businesses with 50 employees or fewer)
- Eastern Cape – Manager: Philiswa Madikazi; Tel: 043 701 3342
- Free State – Manager: Morgan Ramatsetse; Tel: 051 505 6362 / 6200
- Gauteng – Manager: Dingaan Basimane; Tel: 011 853 0303
- KwaZulu-Natal – Manager: Gugu Khomo; Tel: 031 366 2012
- Limpopo – Manager: Ronet Landman 015; Tel: 290 1703
- Mpumalanga – Manager: Evelyn Mokoena; Tel: 013 655 8742
- Northern Cape – Manager: Adv Bulelani Gwabeni; Tel: 053 838 1554
- North West – Manager: Selete Qhamakhoane; Tel: 018 387 8178
- Western Cape – Manager: Tony Lamati; Tel: 021 441 8054
- UIF Email and fax to email numbers
- Germiston.BCP@labour.gov.za; 0864397295
- Petermari.BCP@labour.gov.za; 0864397296
- EastLondon.BCP@labour.gov.za; 0864397299
- Capet.BCP@labour.gov.za; 0864397300
- George.BCP@labour.gov.za; 0864397301
- NorthWest.BCP@labour.gov.za; 0864397302
- Limpopo.BCP@labour.gov.za; 0864397303
- Mpumalanga.BCP@labour.gov.za; 0864397304
- Freestate.BCP@labour.gov.za; 0864397305
- Online.BCP@labour.gov.za; 0864397306
- Durban.BCP@labour.gov.za; 0864397297
- Portelizabeth.BCP@labour.gov.za; 0864397298
- NorthernCape.BCP@labour.gov.za; 0864397309
- Johannesburg.BCP@labour.gov.za; 0864397294
- Pretoria.BCP@labour.gov.za; 0864397290
Does the type of business or the sector we’re in affect its eligibility for TERS?
From the requirements given for TERS applications – provided in detail in our Support for Business – COVID-19 TERS blog from 31 March – the type of business or sector doesn’t appear to be relevant.
To be eligible for TERS, employers must be compliant with UIF requirements and require the relief as a direct result of the COVID-19 pandemic.
More detail on TERS, as well as the process and requirements for applications can be found in our Support for Business – COVID-19 TERS blog post.
How do I apply for TERS?
Update 16 April: The email application is now obsolete. A new online application is now available. Read more here.
The first step is to send an email inquiry to Covid19ters@labour.gov.za, after which you should receive an automated reply containing the required documentation and the process to be followed.
A number of clients have informed us that they haven’t received a response yet though (“I sent an email to Covid19ters@labour.gov.za but have not had a reply!?) – this is likely due to the overwhelming number of queries they are undoubtedly dealing with. Despite this, we recommend that you persevere and don’t complete an application without the email, as the contents of it has been amended multiple times since lockdown. Below ais a list of some of the key information that was provided in the automated response on 7 April:
- A list of the documents required
- A copy of the “COVID-19 TERS Easy Aid Guide”
- A draft Memorandum of Agreement (MOA) which needs to be filled in with the relevant information and signed
- A template listing critical information required to be filled in by the employer on their employees
- A second template to be filled in by the employer, listing the details of the account intended for the sole use of COVID-19 TERS employee payments
- A guide of how to convert excel spreadsheets to CSV files
Once all of the above information is complete in the prescribed format, applications are to be sent to Covid19UIFclaims@labour.gov.za. After the fund has signed off the employer can expect payment as laid out in the MOA.
All of the above and more information on TERS can also be found in our Support for Business – COVID-19 TERS blog post.
One of the requirements for a TERS claim is a CSV file of employee and employer information – where do I get this?
Update 16 April: The email application is now obsolete. A new online application is now available. Read more here.
The email you should have received in response to your initial inquiry to Covid19ters@labour.gov.za contains a specification for creating this file if you are comfortable with Excel.
Alternatively, you can use our TERS CSV export function once we have updated it to meet the new criteria. This is a priority for us and we shall inform you as soon as it’s completed. For more information on this, please see our new blog post here. If you’re at all unsure about attempting the file yourself, we would strongly advise that you wait for our amazing team to deliver this functionality and save yourself unnecessary stress.
Part of the TERS application is proof of income for the employees – how do I provide this from SimplePay?
From our understanding of the requirements, proof of payroll is required and 3 month’s payslips should be sufficient here. You can download all of your employees’ payslips for a particular month (or pay period) from the Pay Runs tab in SimplePay. Please take a look at this help article for more information.
If you would like to see this information in report form, you can download our Transaction History Report. This is likely not sufficient to qualify as proof of income but may be useful for your own checks and records. More information on using our reports can be found in this help article.
One of the requirements in the TERS application is that I need to specify our sector minimum wage – how do I find this? What if I don’t know what sector my business falls under?
In answer to both of these questions, we would recommend that you contact the TERS hotline or Department of Labour for assistance. Additionally, in the updated automated response email (7 April) a number of the minimum wages are listed.
We did also briefly cover certain aspects of minimum wage and business sectors in our 26 February blog on National Minimum Wage Increases. This information may be useful in conjunction with your contacting the TERS hotline or Department of Labour.
We will also endeavour to create more detailed resources on sectors and minimum wages and will update all of our clients when this is available.
How do I calculate the benefit I will receive as part of TERS?
Unfortunately, as with normal UIF benefits, this isn’t something we’re able to provide a clear answer on. The UIF calculates benefits based on a formula, which, amongst other things uses a sliding scale based on an employee’s income bracket.
Here again, we unfortunately have to advise that you contact the TERS hotline to try and get an estimate or the exact formula for the calculation. As mentioned in other FAQs, they have generally been efficient and helpful in our phone interactions with them. Alternatively, you could consult a labour practitioner who will likely have more insight into this than we do.
Where can I find the forms for business relief other than TERS?
A great source of the forms needed, and where we have often gone if scrambling to find a form, is the resource centre page for the department of labour, linked here. It should also be noted that our blogs often contain links to the required files or websites likely to contain them.
How will the 20% deferment of EMP201 liability work? Has SimplePay been updated for this?
A worked example can be found in question 8 on page 2 of SARS’s Disaster Management Tax Relief FAQs.
Employers are required to capture their EMP201 return as normal, declaring the full PAYE liability for the month in question. When SARS processes this, their system will determine the 20% tax relief for PAYE and formulate a credit transaction on the employer’s PAYE account.
A statement of account will then be issued to the employer, stating the amount due. The period which employers can defer 20% EMP201 contributions started on 1 April and will run for 4 months through to August. Therefore the first payment will not be due until 7 May 2020.
I am not a SimplePay client, is it still possible to use your forms for UIF and TERS?
All of the forms and functionality covered in this and our other COVID-19 blogs are only available to SimplePay clients. The good news is that we offer a 30 day free trial and sign up is a breeze! You can find out more and sign up for a trial here. That way you can generate the relevant forms for your COVID-19 relief now and then continue to experience the joy of stress free payroll and SARS filing for years to come 🙂
Keep well. Stay home. Stay safe.
Team SimplePay