UIF Increase

Unemployment Insurance Fund Contribution Earnings Ceiling Increase – Effective 1 June 2021

With effect from 1 June 2021 all UIF deductions and contributions will be calculated based on the new earnings ceiling amount of R17,712 per month. The new maximum UIF deduction/contribution therefore amounts to R177.12.

The previous earnings ceiling was R14,872 per month (UIF amounting to R148.72) and has been effective since 1 October 2012.

For employees, this means that the maximum amount that can be deducted from their salary is R177.12 (1% of a maximum salary of R17,712). Practically speaking, this means that employees across South Africa who earn more than the previous ceiling amount of R14,872 per month will see a decrease in their net pay from June 2021 with up to R28.40. Employees earning less than R14,872 will not be affected by any change to their net salary.

For employers, this means that they will see an increase in their cost to company of up to R28.40 per employee, for all employees who earn more than R14,872 per month. There will be no change to the cost of company of employees earning less than R14,872 per month.

The increase of the UIF contribution ceiling has been planned for some time now and was initially meant to be effective from 1 March 2021. However, due to certain procedures not being correctly followed during the 2021 Budget Speech, the effective date was postponed to 1 June 2021.

Furthermore, employers and payroll providers should ensure that their payrolls for June 2021 are updated to reflect the latest UIF amounts.

Link to official SARS Announcement: https://www.sars.gov.za/latest-news/unemployment-insurance-fund-uif-contributions/

Should you have any questions regarding this change, please feel free to contact us at info@greenpen.co.za.



The art of accounting.

Book your consultation now.