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Most frequent questions and answers
Contributions Payable. The contribution that employers must deduct from a worker’s pay is 1% of the worker’s total earnings, excluding commission. In addition to the 1% deducted from the worker, the employer also contributes 1% for every worker that they employ. The total contribution paid to the UIF is therefore 2%.
SDL is a levy imposed to encourage learning and development in South Africa and is determined by an employer’s salary bill. The funds are to be used to develop and improve skills of employees.
The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL, UIF and/or ETI. A unique Payment reference number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.
An EMP501 is the report of all your staff earnings, required by SARS. It needs to be submitted twice a year and must be submitted before you can issue IRP5 certificates to your staff. SARS has imposed high administrative penalties for each incorrect line item in an EMP501 reconciliation.
An IRP5 is used in respect of employees from whom tax has been deducted by their employer. – On the other hand, an IT3(a) is used to report earnings of employees from whom tax has not been deducted.
If you earn less than R350 000 for a full year from one employer (that’s your total salary income before tax) and have no other sources of additional income (for example, interest or rental income) and no deductions that you want to claim (for example medical expenses, travel or retirement annuities), then you don’t need to submit a return.
The Employment Equity Act chart (EEA) and The Basic Conditions of Employment (BCEA) poster must be displayed at all times on your premises. A copy of the Occupational Health & Safety Act (OHSA) + Regulations must be on your premises and be available to all employees on request but does not have to be on display.
The South African government has set up a special fund to compensate employees for injuries or diseases resulting from work. All employers must register with the Workmen’s Compensation Fund so that their workers can claim compensation for occupational injuries and diseases.
Pay As You Earn’ is a system of income tax withholding that requires employers to deduct income tax as per the tax schedules provided by SARS.
Unemployment Insurance Fund’. All employees with a green bar-coded ID must be registered with the Department of Labour for UIF. Employees will be able to claim for the benefits under the scheme for: unemployment, maternity, adoption and long-term illness.
Skills Development Levy’ is calculated at 1% and is a compulsory levy for the purposes of funding education and training.
Workman’s Compensation’, a compulsory contribution for the funding of injury on duty compensation
Fringe benefits are forms of compensation you provide to employees outside of a stated wage or salary. Common examples of fringe benefits include medical and dental insurance, use of a company car, housing allowance, educational assistance, vacation pay, sick pay, meals and employee discounts.
The records must be maintained in such form, including any electronic form, as may be prescribed by the revenue authorities. These records should be kept for five years from the date of the last entry and must be available for inspection by the South African Revenue Service and Unemployment Insurance Fund officials.