Increased UIF Contributions

The increase in the UIF contributions which was promised in March this year has finally been gazetted and will be effective from the 1st of June 2021.  That means that all employees who earn more than    R14 872-00 will see a small drop in their earnings on pay day this month.

In April 2017, the Unemployment Insurance Fund increased the maximum level for benefits to R17 711-58 however, the responsibility for increasing contributions to match this with an increase in the contribution.  This responsibility lay with the finance minister and due to changes in Ministry at that time, no regulation in this regard was passed.

With effect from 1 June 2021 this will be corrected.  This means that while everyone still contributes 1% of salary and companies are required to match this, those employees whose earnings are above R14 872-00 will contribute more to UIF.  The maximum contribution level has now been set at R177.12.

What does this mean:

Example 1:  Employee earning R16 000-00 per month.

UIF 2020R148.72
UIF 2020R160.00
-R 11.28

Example 2: Employee earning R25 000-00 per month

UIF 2020R148.72
UIF 2020R177.12
-R 28.40

The benefit level remains unchanged which means that anyone claiming one of the eight benefits available from UIF, i.e.

  1. UNEMPLOYMENT BENEFIT
  2. REDUCED WORKING TIME BENEFIT
  3. ILL HEALTH BENEFIT
  4. DEPENDANTS BENEFIT
  5. MATERNITY LEAVE BENEFIT
  6. ADOPTION LEAVE BENEFIT
  7. COMMISSIONING LEAVE BENEFIT
  8. PARENTAL LEAVE BENEFIT

Will be entitled to benefits with a maximum benefit calculated as a percentage of R17 711-58.

Please advise affected staff of the change.

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