Unemployment Insurance Fund (UIF) remuneration and contributions

Explaining Unemployment Insurance Fund (UIF) remuneration and contributions on Sage VIP Classic, Sage VIP Premier and Sage Payroll Professional.

The South African Revenue Services administers the Unemployment Insurance Contributions Act and legislates who pay UIF contributions and how much.

The system calculates UIF contributions based on the remuneration defined in the Fourth Schedule to the Income Tax Act.

There's few exclusions:

• pension, superannuation allowance or retiring allowance
• annuities
• payments to a labour broker in possession of an IRP30 exemption certificate
• amounts for voluntary award in respect of relinquishment, termination, loss, repudiation, cancellation or variation of any office or employment
• once-off payments such as lump sum payments from pension, provident or retirement annuity funds
• restraint of trade payments
• commission

The formula to calculate UIF remuneration:

• Taxable earnings + taxable fringe benefit + taxable company contributions

Both the employee and employer contribute 1% of UIF remuneration, limited to R17 712 per month.

The maximum contribution per month:

• Employee: R177.12 per month (1% of the UIF contribution threshold of R17 712).
• Employer: R177.12 per month (1% of the UIF contribution threshold of R17 712).