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How is the UIF cap applied to employees who are not paid monthly?

SimplePay applies the UIF cap to the cumulative earnings of the employee for the month. This means that a non-monthly paid employee will pay UIF of 1% of remuneration for that payslip, provided that the total contributions for the month do not exceed R177.12. An employee could therefore have payslips with zero UIF calculated if their total UIF contributions from prior payslips in the same month reached the cap.

For example:

Suppose that an employee is paid R6 000 weekly and a month has 4 weeks in it. The UIF per payslip will be calculated as follows:

WeekRemuneration1% of RemunerationUIF for the payslip*Cumulative UIF for the month
1R6 000R60R60R60
2R6 000R60R60R120
3R6 000R60R57.12R177.12
4R6 000R60R0R0
*The UIF for the payslip is 1% of remuneration, provided that the cumulative UIF for the month doesn’t exceed the monthly cap of R177.12

Please Note:

The above approach was implemented in December 2020.

Part of SimplePay’s mission is to keep you compliant with legislation, which outlines the general payroll rules and regulations to follow. SARS and the Department of Labour often supplement these with interpretation notes and examples on how to approach common scenarios. However, it is nearly impossible for them to cater for all possible scenarios that could occur in practice. In these instances, payroll software providers often have to use their discretion when interpreting legislation and choose an approach that best meets the requirements. One of these instances is the application of the monthly UIF cap for employees who are not paid monthly.

Prior to December 2020, SimplePay used a different approach. The monthly UIF cap was divided by the number of pay periods in a month to determine a cap per payslip. The UIF per payslip was calculated as 1% of the remuneration on the payslip, up to a maximum of the cap per payslip.