A no-fuss guide to starting a business (Part 6)

In this instalment of our series, we’re taking a look at your responsibilities as an employer in terms of the Unemployment Insurance Fund (UIF) and the Compensation Fund, which covers on-the-job injury or illness.

Getting to grips with the UIF

The UIF gives short-term relief to employees who lose their jobs or are retrenched. They can also claim from the fund in the case of illness, maternity or adoption leave. If an employee has died, their dependants can claim the funds that have been contributed on that employee’s behalf.

It is your responsibility as an employer to register your employees with the UIF and make the monthly contributions for each of your employees. You need to deduct 1% from the employee’s salary and add another 1% as the company’s contribution, making a 2% contribution to the UIF. You aren’t allowed to deduct more than 1% from the employee’s salary for any reason.

What about compensation for on-the-job injury?

If an employee gets injured or becomes sick from a disease at work, they can claim from the Compensation Fund. Additionally, if the employee dies from that injury or illness, or is killed at work, their dependants may claim from the Fund as well.

You need to register with the Compensation Fund and pay an annual fee that is based on the amount your employees earn and the riskiness of their jobs. This money is not deducted from the employee’s salary.

If one of your employees gets injured (temporarily or permanently) or becomes ill, you will need to pay for the first three months and then claim back from the Fund. If the person is off work for longer than three months, then the payments will be made by the Compensation Commissioner.

Starting a Business series

Part 1: Some of the steps to complete in order to give your business the best start possible.

Part 2: Types of businesses, your legal and tax obligations, and how to register a company

Part 3: Looking at your obligations when your business grows and you need to hire employees.

Part 4: Employing freelancers – what does that mean for you as a business owner?

Part 5: Some of the fees and taxes you need to pay – PAYE and the Skills Development Levy.

Part 6: Your responsibilities as an employer in terms of UIF and the Compensation Fund.

4 thoughts on “A no-fuss guide to starting a business (Part 6)

  1. Valuable information like this need to be spread to the whole world, thank you Wesbank.

  2. Yes I’ve learnt more about UIF and Credits.Useful information I really appreciate it.

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