Employment data sharing between SARS and the UIF

Employment data sharing between SARS and the UIF

Business, Human Resources, Tax

It has been noted with interest that a joint implementation agreement on the sharing of employment data between SARS and the Unemployment Insurance Fund (UIF) has been drawn up.

According to the media statement, 98% of monthly UIF contributions are paid to SARS by employers via their payroll systems. These payroll systems provide detailed employer and employee data via the bi-annual tax certificate submission process. With SARS proposing to change the submission frequency to monthly, SARS will be able to extract employer and employee information and send it to the Unemployment Insurance Fund. This will reduce administration for the employer as the need to submit the monthly Declaration Files (EDEC) could fall away. The integrity of the information that is received from SARS is also likely to improve the information that the UIF has access to for benefit claims purposes.

It is also hoped that the Compensation Fund can be included in this collaboration project. There has been some collaboration between PAGSA and the Compensation Fund, most recently concerning the concept of ‘COID earnings’. The challenges in interpretation of the ‘COID earnings’ concept could fall away if the term is replaced by the Fourth Schedule definition of ‘remuneration’. This change is included in the COID Amendment Act. This Act is yet to be signed into law, so an effective date is not known. It is hoped that this date will coincide nicely with the start of the next reporting year on the 1st March 2024.

We will keep you updated on the latest developments. In the meantime, should you require any assistance please reach out on [email protected].