You are advised that the Minister of Labour has with effect from 1 October 2012, amended the UIF ceiling on the scale of benefits and contributions, from R149 736 (one hundred and forty nine thousand seven hundred and thirty six rand) per annum to R178 464 (one hundred and seventy eight thousand four hundred and sixty four rand) per annum.
The following changes will apply;
1) The maximum monthly contribution per employee will be be R148,72 per month .
2) The maximum employer contribution will be 148.72 per month
3) This is based on the maximum renumeration of R14 872,00 (fourteen thousand eight hundred and seventy two rand per month.
(See the full notice below or download it from the sars website)
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STAATSKOERANT, 26 SEPTEMBER 2012 No. 35715 3 GOVERNMENT NOTICE SOUTH AFRICAN REVENUE SERVICE No. 783 26 September 2012
DETERMINATION OF LIMIT ON AMOUNT OF REMUNERATION FOR PURPOSES OF DETERMINATION OF CONTRIBUTION IN TERMS OF SECTION 6 OF THE UNEMPLOYMENT INSURANCE CONTRIBUTIONS ACT, 2002 (ACT NO.4 OF 2002)
By virtue of the powers vested in me by section 6(2) of the Unemployment Insurance Contributions Act, 2002 (Act No. 4 of 2002), I, Pravin Jamnadas Gordhan, Minister of Finance, hereby after consultation with the Minister of Labour and the Unemployment Insurance Commissioner, determine that section 6(1) of that Act shall, with effect from 1 October 2012, not apply to so much of the remuneration paid or payable by an employer to an employee during any month, as exceeds R14 872.
A~- PJ GORDHAN
MINISTER OF FINANCE
What the changed UIF thresholds mean to employers:
The UIF thresholds were last adjusted in 2008. The UIF contributions for employees who earned above the threshold were then capped at a company contribution of R124.78 per month from the employer with a deduction from the employee’s remuneration of equal value. As a result of the new threshold values that will come into effect on 1 October 2012, these contributions/deductions will now increase to up to R147.82 per month for employees who earn above the previous threshold value of R12 478. This may look like an insignificant amount but at a cost to company of some R23 per month for each employee who earns above the threshold, the additional burden on an employer’s salary costs will compound and can be quite substantial, especially for larger employers.