The Unemployment Insurance Fund provides short-term financial relief to employees who lose their income through retrenchment, illness, maternity leave, or the death of a contributor.
If you employ anyone who works 24 or more hours per month, you are legally required to register for UIF and contribute every month. Many small business owners and households do not realise this applies to them.
Here is what UIF is, who must contribute, how much it costs, and what happens if you do not comply.
Who Must Register and Contribute
UIF is mandatory for all employers who employ one or more workers for 24 or more hours per month.
This includes:
- Business owners with full-time or part-time staff
- Households employing domestic workers, gardeners, cleaners, nannies, or drivers for 24 or more hours per month
If you employ a domestic worker for 24 or more hours a month, you are an employer for UIF purposes. This is one of the most commonly overlooked obligations in South Africa.
Who is exempt from UIF contributions:
- Employees working fewer than 24 hours per month for a single employer
- Learners registered under a formal learnership agreement
- Foreign workers with work permits that require them to return to their home country at the end of their contract
- National and provincial government employees
- Employees receiving a monthly state pension
How Much Must You Contribute
The contribution is straightforward.
Each employee contributes 1% of their monthly remuneration. You as the employer contribute a matching 1%. The total is 2% of the employee's salary, paid monthly.
Contributions are capped at a monthly earnings ceiling of R17,712. For any employee earning above this amount, UIF is calculated on R17,712 only.
This means the maximum monthly UIF contribution is:
- R177.12 deducted from the employee
- R177.12 paid by the employer
- R354.24 total per employee per month
The employee's 1% is deducted from their salary. You add your 1% and pay both amounts together.
How and When to Pay
How you pay UIF depends on the type of employer you are.
Business employers with staff
If you are registered as an employer with SARS, UIF contributions are submitted and paid monthly via SARS eFiling as part of your EMP201 return, alongside PAYE and SDL.
The deadline is the 7th of each month for the previous month's payroll. If the 7th falls on a weekend or public holiday, the deadline moves to the last business day before it.
Individuals employing domestic workers
If you employ a domestic worker, gardener, cleaner, nanny, or driver, you do not necessarily need to register for EMP201 with SARS. UIF can be registered and paid directly through the uFiling portal managed by the Department of Employment and Labour.
This route is designed specifically for household employers. You register your domestic worker, declare their earnings, and pay the monthly UIF contribution through uFiling.
When an employee leaves your employment for any reason, you must complete a UI-19 form and provide it to the employee immediately. This form records their employment history and is required when they claim UIF benefits.
Missing contributions or failing to submit the UI-19 form when an employee leaves can delay or prevent that employee from accessing benefits they have paid into.
How to Register
If you are not yet registered for UIF, you need to do so before your next payroll run. The registration route depends on your situation.
Business employers
Registration is done through SARS as part of your employer registration. Complete the EMP101e form on eFiling or at a SARS branch. This registers you for PAYE, UIF, and SDL in one process.
Register within 21 days of employing your first qualifying employee. Do not wait until your first payroll run.
Individuals with domestic workers
Household employers can register directly on the uFiling portal through the Department of Employment and Labour. You do not need a SARS employer registration or EMP201 return to comply, provided you are only employing domestic staff and using the uFiling system correctly.
If you have been employing staff without registering for UIF, back-registration is possible but will result in accumulated arrears from the date employment started, plus potential penalties.
What Happens If You Do Not Comply
Failing to Comply Has Consequences
Failing to register, deduct, or pay UIF contributions results in penalties and interest.
Business employers who pay via SARS may face charges from SARS. All employers, including household employers using uFiling, remain subject to enforcement by the Department of Employment and Labour.
The Department of Employment and Labour can require back-payment of contributions from the date employment began, not the date you registered.
Beyond the financial penalties, unregistered employees cannot claim UIF benefits when they need them. If a staff member is retrenched, becomes ill, or goes on maternity leave and you have not been contributing on their behalf, they have no fund to draw from.
Compliance protects both you and your employees.
Not Sure If Your Payroll Is Compliant?
UIF is a monthly employer obligation, whether you pay through SARS as a business or through uFiling as a household employer. Getting it right from the start avoids arrears, penalties, and complications down the line.
At Accounting Simplified we handle employer registrations, monthly payroll submissions, and ongoing compliance so you can focus on running your business.
Important: This article provides general guidance for South African employers. Every situation is unique. Consult a qualified accounting professional for advice specific to your circumstances.