UIF for Foreigners

ATTENTION WE ARE MOVING! From the 30th of July our new address will be:
Ground Floor, Wrigley Field Building
The Campus, 57 Sloane street
Bryanston, 2021
UIF for Foreigners
The Unemployment Insurance Fund (“UIF”) allows employees who contribute monthly to receive benefits from the fund if they are unemployed due to circumstances such as dismissal or maternity leave.  UIF also assists dependents of deceased employees who contributed monthly to the fund.
There are two pieces of legislation that govern Unemployment Insurance, namely the Unemployment Insurance Contributions  Act which governs contributions to the UIF, and the Unemployment Insurance Act which governs the benefits available to contributors. The Unemployment Insurance Contributions Act was promulgated in 2002.
The act applied to all employers and workers except workers working less than 24 hours a month for an employer, learners, public servants, foreigners working on contract, workers getting a monthly state pension and workers only earning commission.
However, from 1 March 2018, amendments to the Act have been promulgated and foreign employees working within South Africa, as well as their employers will be required to contribute to UIF. It has furthermore been extended to also apply to learners employed in terms of section 18(2) of the Skills Development Act.  Both parties shall be required to contribute 1% of the employee’s remuneration to the Unemployment Insurance Fund each month.
Contributions are limited to an amount as determined from time to time, but currently set at R148.72 per month. The current limit is set at salaries of R178 464 per annum, being R14 872 per month. Therefore, where an employee earns over this amount, their contribution will be at the set limit of R148.72 per month.
Should a foreign employee remain on the payroll of a foreign country, but works in South Africa, it is not necessary for the employer to deduct PAYE. The employer does however have to contribute to the Skills Development Levy and Compensation Fund.
When deducting UIF, an employer may not deduct more than the prescribed UIF amount, and may not charge a fee to the employee for this deduction.
In July 2017, the South African Human Rights Commission was vocal about the importance of a judgment handed down by the Equality Court regarding the issue of UIF and foreigners. In this situation, an asylum seeker was denied from claiming his UIF benefits because the system could not pay him if he did not possess a 13 digit bar-coded South African ID document. The Court awarded that the system be amended to rectify this, and the asylum seeker received the UIF benefits as well as damages.
It is clear that the law in South Africa is ever changing to provide increasing rights for employees, regardless of their origin. Employers must thus ensure compliance with the latest legislation and ensure that if they employ foreign nationals, their payroll systems are updated accordingly.
For any payroll queries, do not hesitate to contact our Payroll Division on 079 504 1293…