UIF contributions error – Increase date 1 October 2007 vs 1 February 2008

We refer to SARS notifications sent to employers during September 2007 advising employers of the increased UIF contributions limit of R12 478 per month (from R11 662 per month prior to this increase) being effective 1 October 2007 – this was per the notice issued by the Minister of Labour on 23/08/2007.

We advise that due to communication error, the actual increase was only legislated by the Minister of Finance with effect of 1 February 2008 (Gazetted on 31/01/2008).

This notice was required in terms of the Unemployment Insurance Contributions (UIC) Act before it become legally required for employers to change their monthly contribution to the UIF Fund. Due to the absence of this legal notice (in terms of the UIC Act), the result was that employers were not legally required to increase their UIF contributions to accord with the maximum income amount of R12 478 per month set by the Minister of Labour.

Any increased payments made on this basis (from 01/10/2007 to 31/01/2008) constituted overpayments, entitling employers to claim refunds from SARS together with interest for the difference exceeding the legal maximum limit of R11 662 per month.
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