Unemployment insurance fund or the UIF as it is commonly referred is a topic that affects most employees. Although it is a relatively known concept most people are not aware of how and when it becomes applicable to them. Here are some of the things you need to know.

What is UIF?

The Unemployment Insurance Fund (UIF) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave, or illness. It also provides relief to the dependants of a deceased contributor.

Who is it for?

All employees, as well as their employers, are responsible for contributions to the UIF. However, an employees is excluded from contributing to the UIF if–

• Employed by the employer for less than 24 hours a month;
• Receives remuneration under a contract of employment as contemplated in section 18(2) of the Skills Development Act, 1998 (Act No.97 of 1998);
• Employed as an officer or employee in the national or provincial sphere of Government;
• Entered the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic. If upon termination, the employer is required by law or by the contract of service, apprenticeship or learnership, or by any other agreement or undertaking, to send home that person, or if that person needs to leave the Republic
• The President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature or
• A member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders

How much do you need to pay?

• The amount of the contribution due by an employee must be 1% of the remuneration paid by the employer to the employee.
• The employer must pay a total contribution of 2% (1% contributed by the employee and 1% contributed by the employer) within the prescribed period.

What steps must I take?

Any employer needs to register to pay UIF contributions. You can register once for all different tax types using the client information system.

The following employers must register at the UI Commissioner’s office for purposes of paying UIF contributions, an employer who:

• Doesn’t need to register with SARS for Employees’ Tax purposes;
• Hasn’t voluntarily registered with SARS as an employer;
• Pays or is liable to pay remuneration to an employee must contribute on a monthly basis to the UI Fund.

How and when should it be paid?

It must be paid within seven days after the end of the month during which the amount was deducted. If the last day for payment falls on a public holiday or weekend, the payment must be made on the last business day before the public holiday or weekend

The following payment methods are available:

• eFiling
• Electronic payments through the internet (EFT)
• At a branch of one of the relevant approved banking institutions.

Where can I claim my UIF benefits in the event of unemployment?

UIF benefits can be claimed from the department of Labour office near you.

Please note: As of 1 October 2012, the maximum earnings ceiling is R14 872 per month or R178 464 annually. For employees who earn more than this amount, the contribution is calculated using the maximum earnings ceiling amount. Therefore the maximum contribution which can be deducted, for employees who earn more than R14 872 per month, is R148.72 per month.