The Unemployment Insurance Fund provides short-term benefits to workers who lose income. It has two sides: employers must register and contribute, and workers may claim. Both sides have requirements and both are widely misunderstood.
This page covers the employer obligations and the worker entitlements, under the Unemployment Insurance Act 63 of 2001 and the Unemployment Insurance Contributions Act 4 of 2002.
Business Requirements at a Glance
What UIF involves, by side.
- Employers must register with the UIF and with SARS for contribution purposes
- Contributions are payable monthly, split between the employer and the employee at the prescribed rate
- Employers must declare employee details monthly, including new appointments and terminations
- Employees must be declared with correct identity numbers and remuneration
- Domestic workers are covered and their employers must register — this is the most widely ignored obligation
- Workers may claim unemployment, illness, maternity, parental, adoption and dependants’ benefits, subject to the Act
- Claims must be lodged within the periods the Act prescribes
- Benefits are calculated on the worker’s earnings and credits accumulated
Registration and Legal Requirements
Registration is compulsory for employers, and the obligation arises with the first employee. It applies to a business with one employee as much as to a large one, and it applies to domestic employers — a household employing a domestic worker or a gardener must register and contribute.
Confirm the current contribution rate, earnings ceiling and registration process with the Department of Employment and Labour and SARS. Rates and ceilings are set in regulation and revised.
Employee deductions are held for the Fund. The employee’s share is deducted from remuneration and paid over with the employer’s share. Deducting and not paying over is treated seriously.
Monthly declarations matter as much as payments. A worker cannot claim if the employer never declared them, and the most common reason a claim fails is that the employer’s declarations were not up to date. Employers who pay but do not declare create that problem for their staff.
Terminations must be declared with the correct reason code, because the reason determines whether the worker can claim. A termination declared incorrectly blocks a legitimate claim.
Documents and Ownership Information Required
What is generally required.
- The employer’s UIF reference number and SARS registration
- A monthly declaration of employees, remuneration and any changes
- Employee identity numbers, banking details and start and end dates
- Proof of contributions paid
- For a claim: the worker’s South African ID or valid permit
- For a claim: a completed UI-19 from the employer showing employment and termination details
- For a claim: a service certificate or termination letter
- For a claim: banking details in the worker’s own name
- For a claim: medical or other supporting documents, depending on the benefit
Tax, Licence and Compliance Requirements
Workers can claim several benefits — unemployment where employment ended other than by resignation in most circumstances, illness where unable to work, maternity and parental benefits, adoption benefits, and dependants’ benefits where a contributor dies. Each has its own conditions and its own time limit for claiming.
Claim promptly. The Act prescribes periods within which a claim must be lodged, and a late claim can be refused. Do not wait to see whether other work arrives first.
Resignation generally does not qualify for unemployment benefits, while retrenchment, dismissal and the ending of a contract generally do. The reason recorded by the employer determines it, which is why the termination declaration matters so much.
Claims are lodged through the Department of Employment and Labour, at a labour centre or through its online system. Confirm the current process, since it has changed.
Benefits are not full salary. They are calculated at a percentage of earnings on a sliding scale, and they are limited in duration by accumulated credits. Plan on that basis rather than on replacement of income.
Never pay anyone to process a UIF claim. Claiming is free and is done by the claimant. Agents charging a percentage of a benefit are taking money for a form the claimant can lodge themselves, and some are simply fraudulent.
Where an employer refuses to provide a UI-19 or has not registered, report it to the Department of Employment and Labour. Non-registration is a contravention and the Department can act on it, and a worker is not left without recourse.
Process, Deadlines and Ongoing Obligations
Employers should register immediately on employing anyone, declare monthly, and keep employee details accurate. Registration and declaration are free and the penalties for non-compliance are not.
Domestic employers should register. It is a legal obligation, the contribution is modest, and it is the difference between a domestic worker having income after a job ends and having none. It is also increasingly checked.
Workers should check their own position. Ask your employer for confirmation that you are declared, and keep your own payslips showing the deduction. A worker who discovers at termination that they were never declared has a much harder path.
Update banking details and contact details with the Fund, since payments and correspondence go to what is on record.
Free help is available. Labour centres assist with claims at no cost, and the Department of Employment and Labour publishes the forms and the process.
- Register with the UIF on employing your first person, including a domestic worker
- Declare employees monthly — payment alone is not enough
- Declare terminations with the correct reason code
- Keep employee identity and banking details accurate
- Workers: check that your employer has declared you
- Workers: keep payslips showing the deduction
- Claim promptly — the Act prescribes time limits
- Expect a percentage of earnings, not full salary replacement
- Never pay an agent to lodge a claim — it is free
- Report an employer who will not register or provide a UI-19
Frequently Asked Questions
Do I have to register for a domestic worker?
Yes. UIF registration and contribution is a legal obligation for domestic employers, and it is the most widely ignored one. The contribution is modest and it is increasingly checked.
Why do claims fail?
Most often because the employer’s monthly declarations were not up to date, or the termination reason was recorded incorrectly. Paying contributions without declaring employees creates that problem.
Can I claim if I resigned?
Generally not for unemployment benefits. Retrenchment, dismissal and the ending of a contract generally qualify. The reason the employer records determines it.
Should I pay someone to claim for me?
No. Claiming is free and labour centres assist at no cost. Agents charging a percentage are taking money for a form you can lodge yourself.
Contribution rates, earnings ceilings, benefit calculations, claim periods and processes are set in the Unemployment Insurance Act and its regulations and by the Department of Employment and Labour, and are revised. Confirm current requirements with the Department and SARS.