UIF stands for Unemployment Insurance Fund. The Unemployment Insurance Fund has been established to provide short term relief to workers, subject to certain conditions, when they become unemployed, or are unable to work due to illness, maternity or adoption leave and also to provide relief to the dependents of deceased contributors.

A worker should contribute 1% of his/her monthly remuneration. In addition to the 1% that is paid by the worker, the employer also contributes 1% in respect of each worker in his/her employment. The total contribution that is paid is therefore 2%. For example, if a worker earns R1,000 per month, the employer must deduct 1% of the R1,000 which is R10. In addition, the employer must pay R10 in respect of this worker who is in his/her employment. The total of R20 must therefore be paid to the UIF or SARS (whichever is applicable). Contributions must be deducted for the current month only and an employer cannot deduct more than one month’s contributions. Should the employer wish, they are not obliged to and are able to pay the entire contribution (2% without deduction from the worker’s remuneration).

The calculation must be calculated on the taxable remuneration given to the employee whether in cash or in kind, and includes overtime and bonuses.

It is the responsibility of the employer to make the necessary deductions and payments based on the remuneration of the employee. Late or non-payment of the contributions will attract penalties and interest. Non-compliance can be punishable by a fine, imprisonment or both.

We don’t know every single avenue the government may use to trace people, but from our experience we have witnessed the following.

1. SARS or UIF Department officials literally going door to door with handheld terminals. They tap in the ID number of your domestic worker and can immediately see if the contributions have been logged and received.  At the same time they request to see payslips, contracts of employment etc.  If you don’t comply then they proceed with the implementation of penalties.
2. You and your domestic worker part ways for whatever reason. Your domestic worker applies for UIF support stipulating that they worked for you at your address. It becomes clear there is no registration or payment of UIF contributions and the process of investigation begins, usually leading to penalties.
3. Your domestic worker is unhappy for whatever reason and is aware you are not paying UIF contributions. They go to the UIF Department and log a complaint that you are non-compliant. The process of investigation begins, usually leading to penalties.