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UIFFin24 reports that National Treasury has finally clarified the status of an increase to the Unemployment Insurance Fund (UIF) regular contributions of employers proposed by Finance Minister Tito Mboweni during his budget speech in February.

Under the Unemployment Insurance Contributions Act (UICA), employers and employees must contribute 1% of the remuneration paid to the employee to the UIF. But while the contribution was previously capped at R14,872, Mboweni announced that the UIF contribution ceiling would be increased to R17,712, with an effective date of 1 March 2021. According to head of tax technical at Tax Advisory Jean du Toit, National Treasury published a draft notice which stipulated the effective date of the increase as 1 March, but withdrew it two days later. "It is a good thing that the ceiling has been increased, which has remained stagnant since 1 October 2012, especially as more people may have to rely on it in current circumstances. From an employer's perspective, however, we have seen that the announcement has caused some confusion. The Budget Review indicated the increase is immediate and there appears to be little awareness about the withdrawal of the notice and the postponement of the increase," Du Toit indicated. National Treasury said last week that the draft regulations were published together with the budget for public comment and after those have been processed, the final regulations would be gazetted by the minister. However, employers remain in limbo about how this coming month's contributions should be handled.

  • Read the full original of the report in the above regard by Khulekani Magubane at Fin24

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