Statutory Deductions
Understanding Statutory Deductions and Taxes in South Africa: UIF, PAYE, and SDL
Unemployment Insurance Fund (UIF)
Overview
The UIF provides temporary financial assistance to workers in South Africa who lose their income due to unemployment or inability to work under certain circumstances (e.g., maternity, adoption leave, illness). It also offers support to the dependants of a deceased contributor.
Contribution Requirements
Employees and Employers: Both employees and their employers are generally required to make contributions to the UIF.
Exclusions: Certain categories of employees are exempt from contributing to the UIF. These include:
Employees working for less than 24 hours a month for an employer.
Employees in the national or provincial sphere of government, including specific high-ranking government officials.
Members of municipal councils, traditional leaders, and members of certain legislative bodies.
It is the employer's own responsibility to ensure that when an employee is excluded from paying UIF, they fall into one of these specified categories.
Contribution Rate
The employee's contribution rate is set at 1% of their remuneration.
Employers contribute an additional 1%, making the total contribution 2%.
Maximum Contribution Ceiling
The maximum earnings ceiling for UIF contributions is R17,712 per month (or R212,544 annually as of 1 June 2021). For employees earning more than this, the contribution is calculated using the maximum earnings ceiling.
For more detailed information, please visit the UIF section on the SARS website.
Pay As You Earn (PAYE)
Overview: PAYE involves the deduction of tax from an employee's remuneration by the employer.
Applicability: Employers are required to submit monthly declarations and payments to SARS.
Payment Procedure: Payments must be made within seven days after the end of the month during which the amount was deducted.
For more detailed information, please visit the PAYE section on the SARS website.
Skills Development Levy (SDL)
Overview: SDL is a levy to encourage learning and development in South Africa, calculated based on an employer's salary bill.
Who Must Pay: Where an employer expects that the total salaries will be more than R500 000 over the next 12 months, that employer becomes liable to pay SDL.
The R500 000 includes all wages and salaries paid by the company to employees.
Payment Amount and Procedure: SDL is 1% of the total amount paid in salaries to employees, and must be paid within seven days after the end of the month during which it was deducted.
For more detailed information, please visit the SDL section on the SARS website.
UIF, PAYE and SDL must be submitted monthly with your EMP201.
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