Finance Minister, Nhlanhla Nene, announced in his maiden budget speech a significant reduction in the monthly UIF contributions payable by employers and employees.
The current contributions are calculated as 1% of the first R14 872 of an employee’s remuneration (i.e. R148.72 per month). This will be lowered to 1% of the first R1 000, hence employers and employees will each pay a maximum monthly contribution of R10. This change, once gazetted, will result in total annual contributions of R240 (i.e. R10 x 2 x 12 months) for the 2015/2016 tax year whereas previously the employee and employer would have paid annual contributions of R3 569.28 (i.e. R148.72 x 2 x 12 months).
For your planning purposes, please be advised that the decrease of the monthly UIF limit to R1 000 pm as proposed in the budget is likely to happen ‘sooner’ rather than ‘later’.
There is no date as yet, but as soon as it becomes available, we will notify you.