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UIF contribution threshold to be reduced to R1 000pm for 2015

by , 26 February 2015
On Wednesday, 25 February, the National Treasury proposed a one-year relief measure with regards to Unemployment Insurance Fund (UIF) contributions in Finance Minister, Nhlanhla Nene's 2015 Budget.

He proposed that the contribution threshold should be lowered to R1 000 a month for the 2015/16 year. Here's how this impacts your company's payrolll.

UIF threshhold lowered in 2015 Budget speech

"This means that employers and employees will each pay R10 a month during the year ahead, putting R15 billion back into the pockets of workers and businesses,' Finance Minister Nhlanhla Nene said during this Budget Speech on Wednesday.

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He also stated that, in contrast with the Road Accident Fund, the UIF has an accumulated surplus of over R90 billion.

In regard to this, Nhlanhla Nene declared:

"Improved benefits are now being introduced, but it is nonetheless possible to provide temporary relief to both employers and employees".

Referring to the steps needed to combat financial leakages which deprive the economy of billions of rand through erosion of the tax base, profit shifting and illicit money flows, Nene declared the following:

"The second special revenue proposal is a one-year relief measure in respect of Unemployment Insurance Fund contributions. Unlike the Road Accident Fund, the UIF has an accumulated surplus of over R90 billion. Improved benefits are now being introduced, but it is nonetheless possible to provide temporary relief to both employers and employees. The proposal is that the contribution threshold should be reduced to R1 000 a month for the 2015/16 year. This means that employers and employees will each pay R10 a month during the year ahead, putting R15 billion back into the pockets of workers and businesses".

Discussing the Budget Speech, finance expert Ryk van Niekerk wrote on moneyweb.co.za that the most important changes in the tax field were:

"The biggest tax hikes were for personal income tax and the fuel levy, but they were widely expected. My immediate impression is that it is not excessive and that most affected taxpayers would reluctantly accept this.However, the most surprising element of the budget is the massive hike in the fuel levy, a cool 80.5c per litre, which will suck nearly R18 billion from consumers' wallets."


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Comments
3 comments


Dhiren Bhikha 2015-05-08 18:41:28

Has the Minister gazatted the proposals for reduction in UIF? Local office in Pinetown Durban unable to confirm. Hence usual deductions were made at end 04.2015. Your assistance, please.
Thanks.

Barbara 2015-04-07 11:17:48

I called Dept of Labour today 7 April and they advised that this UIF relief has not yet been implemented !! So for now, nothing has changed.

Lee-Ann 2015-03-13 09:50:36

When does the new UIF rates come into effect?
Do they apply as from 01/03/2015?

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