A recent tax law change has been effected in respect of employer/employee UIF contributions. Please familiarise yourself with the legal note included below and consider whether you and your employees identified below may have an obligation to make UIF contributions.
Law Change:
- The 2017 Tax Laws Amendment Act has deleted sections 4(1)(b) and (d) of Unemployment Insurance Contributions Act, No. 4 of 2002 and which is effective 1 March 2018.
- Previously, these sections read as follows:
“4(1) This Act applies to all employers and employees, other than–
b) employees under a contract of employment contemplated in section 18 (2) of the Skills Development Act, 1998 (Act 97 of 1998),and their employers;
d) an employee and his or her employer, where that employee has entered the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic if upon the termination thereof the employer is required by law or by the contract of service, apprenticeship or learnership, as the case may be, or by any other agreement or undertaking, to repatriate that person, or if that person is so required to leave the Republic.”
3. These provisions, therefore, previously exempted the following persons from UIF contributions:
a) A “learner” as defined in the Skills Development Act, No. 97 of 1998 and employed under an employment agreement;
b) Expatriate employees working in South Africa on work permit and required to leave the country after termination of their employment; and
c) The employers in respect of employees employed in terms of 1 and 2 above.
In consequence of the above law change, as from 1 March 2018, these persons must make UIF contributions.
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