The Unemployment Insurance Fund gives short-term relief, in the form of monetary assistance, to workers if they become unemployed or are unable to work because of maternity leave, adoption leave or long-term illness. Such assistance is also available to the dependants of a deceased contributor.
UIF is calculated as 2% of an employee’s remuneration for UIF purposes, split evenly between the employee and employer, i.e. 1% contributed by the employee and 1% contributed by the employer.
Remuneration for UIF purposes is the employee’s remuneration, less certain exclusions such as commission, and is subject to a monthly income cap of R14 872. The maximum UIF contribution for each party is, therefore, R148.72 a month (R297.44 in total). For employees who are paid at more regular intervals (e.g. weekly), this cap will be apportioned across their pay periods – this may lead to slightly lower UIF contributions in the last pay period of the month.
The total UIF contribution (employee + employer) must be paid monthly based on the amounts contained in the EMP201 and UI-19. More details on these concepts can be found in the following section:
Exemption from UIF
UIF contributions must be made for all employees unless they are expressly excluded by the relevant legislation:
- employees employed by the employer for less than 24 hours a month;
- a foreign worker who will be leaving the Republic at the end of their contract of service, apprenticeship or learnership (no longer valid from 1 March 2018);
- a learner employed and remunerated under a contract of employment as contemplated in Section 18(2) of the Skills Development Act (no longer valid from 1 March 2018); or
- the President or any Member of Parliament or in any sphere of government.
Independent contractors who are deemed to be employees will also be exempt from UIF contributions. Please see the following section for more details: