The Compensation for Occupational Injuries and Diseases (COID) Act requires all employers to submit a declaration, known as a Return of Earnings (ROE) or W.As.8, of annual earnings to the Compensation Fund each year*. This amount, combined with the category in which the business is registered, will determine the amount payable by the employer to the Compensation Fund. The deadline for submitting the ROE is officially 31 March each year; however, in practice, this is generally extended to 31 May.
Once they have submitted their ROE, employers are issued with a Notice of Assessment / Invoice (W.As.6). This indicates the amount owing to the Compensation Commissioner based on the salary information contained in the ROE.
To access the report on SimplePay, go to Filing > OID (Workman’s Comp) Return. Select the income / allowance / benefit accounts to be included as subject to OID. The resulting download will still allow you to modify the totals per employee.
Note in particular that overtime is only subject to OID if an employee is regularly paid overtime. You should, therefore, choose to include overtime based on what’s applicable to the majority of your employees. You can then make adjustments in the downloaded spreadsheet if desired.
Please ensure that you follow the instructions at the top of the downloaded document carefully. You will then need to manually capture the information in this file on the relevant forms.
*Please note: The Compensation Fund uses the opening date when referring to the year of submission i.e. the 2020 submission refers to the Return on Earnings for the period March 2020 – February 2021. This can be confusing, since the tax year makes use of the end date i.e. the 2020 tax year refers to the period March 2019 to February 2020.
An annual earnings threshold applies to each employee, which indicates the maximum amount of an employee’s earnings that the OID contribution can be calculated on. This threshold changes annually.
There is no clear guidance from the Compensation Fund on how they expect the earnings threshold to be applied in practice, despite requests for more clarity. As a result, each payroll provider has had to decide on the most practical approach of implementing the threshold. SimplePay’s approach is to divide the annual threshold into a monthly threshold. The monthly earnings for an employee are then included in the earnings calculation, up to a maximum of the monthly threshold amount.
Suppose the annual threshold is R484 200. SimplePay converts this to a monthly threshold of R40 350 (R484 200 / 12).
Suppose that an employee earns R25 000 per month. The earnings that will be reported for the year on the Return of Earnings is therefore R300 000 (R25 000 x 12), since the R25 000 falls below the monthly threshold.
Suppose that the employee earns R25 000 per month, but also earns an annual bonus of R25 000 in December. The earnings that will be reported for the year on the Return of Earnings is calculated as follows:
- R25 000 x 11 months = R275 000
- R50 000 for December is capped at R40 350
- Total = R315 350 (R275 000 + R40 350)
Suppose that an employee earns R50 000 per month every month, except for December, when the employee went on unpaid leave. The earnings that will be reported for the year on the Return of Earnings is calculated as follows:
- R50 000, capped at R40 350 x 11 months = R443 850
- R25 000 for December
- Total = R468 850 (R443 850 + R25 000)
The Compensation Fund does not have a facility for resubmissions. They have advised that if you have made an error with your submission, you must correct this in the submission for the next year.