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Why is the UIF contribution not calculating on my employee or company?

Created on  | Last modified on  Highlight Matches

Summary

This article will discuss possible reasons why the UIF deduction and or company contribution is not calculated for South African employees on Sage VIP Classic, Sage VIP Premier, and Sage Business Cloud Payroll Professional.

Description

All South African employees will contribute to the Unemployment Insurance Fund (UIF) unless the record or income received is excluded from the calculation. The article explores some reasons why UIF does not calculate in a company or employee 

Resolution

The UIF contribution will not calculate if:

Forced Pay is activated:

  • When Forced Pay (FP) is activated, the system will not perform any calculations (Except when the record is terminated or at the end of the tax year)
  • Deactivate Forced Pay to activate the calculation

The Deduction definition is not setup correctly:

  • From your Main Menu, select Payroll > Definitions > Deduction Definitions
  • The Deduction definition for the UIF line must be set up correctly where the Deduction Type is U.I.F with the IRP5 code 4141
  • If the IRP5 code is incorrect, the value will also not appear on the EMP501 Reconciliation History Report and IRP5/IT3a tax certificate
  • Correct the setup of the definition line

The UIF exclusion reason is selected:

  • From your Main Menu, select Employee > Change Employee
  • Select the applicable employee
  • Select the Statutory Details tab
  • In the UIF & SDL section, confirm if a Non-Contribution Reason was selected as this will exclude the Employee from the UIF calculation

 NOTE: If "No income" reflects, there is no income on the payroll linked to IRP5 codes included for UIF Remuneration.

The employee is only receiving income excluded from the UIF calculation:

  • If the employee is receiving only Commission (IRP5 code 3606) or certain lumpsum payments (e.g. IRP5 code 3901), no UIF contribution will calculate

In a weekly/bi-weekly/other periods company, the Weeks in Month and Week within the calendar month have not been defined:

  • From your Main Menu, select Company > Basic Company Information
  • Select Period Info (BB)
  • The Number of Weeks in Month must be greater than zero, for the UIF calculation to be done in the company
  • The Current Week Number must also be defined for the system