Avoid these two payroll errors when dealing with UIF contributions
43984, 17 Oct. 2014
According to SARS, the Unemployment Insurance Fund (UIF) provides short-term relief to workers when they become unemployed or are unable to work because of maternity leave, adoption leave or illness. It also provides relief to the dependants of the deceased contributor.
In terms of the law, every employer who remunerates an employee must contribute on a monthly basis to UIF.
What’s more, you must handle UIF contributions correctly in your payroll. If you make mistakes, you’ll face penalties and interest.
Since that’s the last thing you want, always avoid these two payroll errors when with them…
When dealing with UIF contributions avoid these two payroll errors
#1: Calculating contributions incorrectly
You and your employee must contribute UIF at 1% of your employee’s gross salary.
This means the total contribution is 2% of his monthly gross salary before deductions.
There’s also no starting point or minimum salary, you must start contributing from day one.
The maximum UIF you’re liable to pay is R148.72 or 1% of R14 872. If your employee earns more than that, the UIF amount payable by your employee will be R148.72. This is a total of R297.44 for both you and your employee.
Remember, if you calculate UIF contribution incorrectly, SARS will pick up on the error when you do your employer reconciliations. And it WILL hit you with penalties and interest.
#2: Forgetting or neglecting to send changes to the DoL
If you fail to let the DoL know Paul no longer works for you, he won’t be able to collect his unemployment benefits.
So make sure you send any changes to the DoL so everything is up-to-date.
Now that you know about these costly UIF contributions errors, avoid them at all cost so SARS doesn’t find fault with your payroll.
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