There are frequent questions with regards to UIF deductions for foreigners and benefits payable to foreign/expatriate employees in a Company.
Under the Unemployment Insurance Contributions Act, these amendments have an effect as from 1 March 2018.
If the employee had entered South Africa for the following purposes:
- Carrying out a contract of service;
- Apprenticeship or learnership within South Africa; and
- Upon termination of contract; and
- Then the employer was required by law or by the contract, to repatriate that employee from South Africa
Both the employee and the employer were exempt to contribute towards UIF.
However, effective 1 March 2018, employers and their employees from foreign nationals will be required to contribute to UIF.
UIF Deductions for foreigners
From the employer’s perspective, UIF deductions for foreigners at a rate of 1% of UIF remuneration has become mandatory. The employee is required to contribute monthly, also at 1% of UIF remuneration, and both up to the current limit.
Employees earning over the current limit of R178 464 per annum, R14 872 per month or R3 432 per week must pay contributions at the limited amount.
Note that employers who are employing foreign nationals should update their payroll system to be compliant with the new contribution for the UIF.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.
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