The Unemployment Insurance Fund (UIF) is a policy implemented by the South African Revenue Services (SARS) as of the 1st of April 2002. It is responsible for collecting and distributing funds to unemployed workers across the country to assist with lightening the economic burden imposed on these individuals for a short time after their official unemployment.
What is the Purpose of the UIF?
The purpose of the UIF is to provide short-term relief to workers if they become unemployed or cannot work because of maternity, adoption leave, or illness. The UIF, which is governed by the Unemployment Insurance Act, 2001 (the UI Act) and the Unemployment Insurance Contributions Act, 2002 (the UIC Act), also supports those who are dependents of a deceased contributor. The abovementioned acts guide the distribution of benefits to contributors who claim from the UIF, as well as the enforcement and collection of contributions to the UIF.
Who Contributes to the UIF?
All South African employees and employers are subject to UIF contributions. According to SARS, only the following cases omit an employee from UIF contributions:
The employee is employed for less than 24 hours a month
An employee receives remuneration under a contract of employment as contemplated in section 18(2) of the Skills Development Act, 1998 (Act No.97 of 1998)
Individuals employed as officers or employees in the national or provincial sphere of Government
Those who 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
Those who are members of a municipal council, are a traditional leader, are a member of a provincial House of Traditional Leaders and/or are a member of the Council of Traditional Leaders
The process of paying UIF occurs directly through a company’s internal financial management systems. Whether you are a business owner or employee, seeking assistance or advice from third-party companies such as MBS can alleviate the stresses of submitting UIF payments. These specialist services help take the stress off you or your business so that you can focus on other tasks.
How Much is the UIF Contribution?
At least one percent of an employee’s income must be contributed by both the employer and employee to the UIF. The employer is responsible for deducting these contributions monthly from an employee’s income, and may seek out the assistance of financial advising specialists such as MBS to assist this process. All individuals who make UIF contributions qualify for and may claim back from the UIF in the event of unemployment, maternity leave, adoption leave, or illness, and there is no tax payable on the benefits claimed from UIF.
Why is it Important to Pay UIF?
Individuals may claim from the UIF in several instances and receive benefits depending on the case. As already mentioned, benefits are applied to those who submit claims for UIF in cases of unemployment, maternity, illness, adoption, and dependency. These benefits assist individuals who require financial relief for any of these reasons, meaning everyone will likely require UIF claims at one point or another. For this reason, it is essential that all required citizens contribute if they too wish to benefit from the UIF policies.
UIF is an important policy enforced by SARS that protects individuals who become unemployed or cannot work for several reasons for a short period. Contributions are essential as these funds provide relief from economic burdens placed on individuals in the unfortunate case of unemployment, helping provide a safety net while these individuals seek new work opportunities. This relief is provided to the entire country’s workforce in the event of unemployment or inability to work during maternity, adoption leave, or illness. Therefore, every individual may benefit from UIF claims at one point or another.
I'm very happy with the Company Registration services that MBS offered us recently. I highly recommend MBS. Not only were they fast and efficient but also very professional and kept me constantly updated with progress of the many registrations that they did.
Claudette Shepherd A Year Ago
MBS accounting service offered my husband and me excellent service and come highly recommended. They assisted us with de-registration from SARS and made a complicated process, due to the fact that we weren't in SA anymore, smooth and easy. They followed up and were very accommodating with every step of the process. Great value for money.
Senzo Xulu A Year Ago
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Selected Studios A Year Ago
Brilliant services and Effects to help my business out ☝️
reece stander A Year Ago
Dylon from MBS had offered me a list of incredible services and I couldn’t help but do my registration of my business through them due to there lighting fast services, informative employees as well as just helping in any convenient way possible
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Thank you Dylon so much for the quick and efficient service we received,
Steve Quirk A Year Ago
Fantastic!I would personally like to thank Dylon for helping me register my company and being so professional about it. Not only was he professional but he was definitely fast.As soon as you enter the webpage you get a message from him letting you know that he is there to help. He responded to my message within minutes and I was on the right track .Dylon keep up the hard work and I will look forward to using MBS services for all my business needs .
EE Marketing 5 Months Ago
Excellent Service delivery and customer support, very helpful team and extremely professional
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Profesional and trustworthy as well as helpful.
Taryn van Niekerk 2 Months Ago
Thank you to MBS Accounting Services for assisting with my company registration. They made - what seemed like a daunting task - a streamlined, convenient and pleasant adventure. A big thanks to Dylon who offered friendly, punctual and efficient service throughout.