What is UIF, how do you calculate UIF contribution, i.e. how much should an employee contribute for UIF...e.g., If an employee earns R15 000 how much will be his/her UIF contribution per month & how is it calculated ??
The Unemployment Insurance Fund (UIF) is a policy implemented by SARS (www.sars.gov.za). It is responsible for collecting and distributing funds to unemployed workers across the country to assist with lightening the economic burden imposed on these individuals for a short time after they become unemployed, are on unpaid maternity leave or if the company closes down.
At least one percent of an employee’s income must be contributed by both the employer and employee to the UIF. This means that if you earn R15000, you are required to pay R150 and the employer is responsible for deducting these contributions monthly from your income. All individuals who make UIF contributions qualify for and may claim back from the UIF in the event of unemployment, maternity leave, adoption leave, or illness, and there is no tax payable on the benefits claimed from UIF (www.labour.gov.za ).
It is important to note, that SARS has a maximum contribution of R177.12, so if your income increases to more than R17700, you will not pay more than R177.12 toward your UIF.