Employees Remuneration for UIF, SDL, PAYE · 2012-02-24 · Employees Remuneration for UIF, SDL,...

Table of Contents

Part I Employees StatutoryRemuneration 2

................................................................................................................................... 21 PAYE

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 2Remuneration Included

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 2Remuneration Excluded

................................................................................................................................... 32 UIF



................................................................................................................................... 43 SDL



Employees Remuneration for UIF, SDL, PAYEI


2Employees Statutory Remuneration


1 Employees Statutory Remuneration

1.1 PAYE

Paragraph 1 of the 4th Schedule defines remuneration as any amount of income which is paid or ispayable to any person whether in cash or otherwise and whether or not in respect of servicesrendered.Examples of remuneration � Remuneration will include salary, fee, bonus, wage, gratuity,pension, leave encashment, emolument, voluntary award, commission, annuity, stipend,remuneration for overtime, superannuation allowance, retirement allowance, lump sum payment,director's remuneration, etc

1.1.1 Remuneration Included

· restraint of trade payments;· an amount, including a voluntary award, received or accrued in commutation of amounts

due in terms of a contract of employment or service;· an amount received or accrued in respect of the relinquishment, termination, loss,

repudiation, cancellation or variation of an office or employment or of an appointment;· An allowance or advance paid to an employee in respect of accommodation, meals or

other incidental costs while the employee is by reason of the duties of his / her officeobliged to spend at least one night away from his / her usual place of residence in theRepublic is deemed to become payable to the employee in the following month in respectof services rendered. This deeming provision applies where such an allowance oradvance was paid to an employee during any month in respect of a night away from his /her usual place of residence and that employee has not by the last day of the followingmonth either spent the night away from his / her usual place of residence or refunded thatallowance or advance to the employer;

o 50% of an allowance paid to a holder of a public office;o 80% of an allowance or advance in respect of the expense of travelling for

business purposes (excluding an allowance paid for actual distance travelled forbusiness purposes, at a rate not exceeding the rate per kilometre fixed by theMinister of Finance in the Government Gazette);

o fringe benefits received in terms of the 7th Schedule;o a gratuity received by or accrued to a person from his / her employer because

such person obtained a university degree or diploma or has been successful in anexamination;

o any gain determined in terms of Section 8B, which must be included in thatperson's income under that section (broad-based equity share plan); and

o any gain determined in terms of Section 8C which is required to be included in theincome of that person.

1.1.2 Remuneration Excluded

· Amounts paid to common law independent contractors, but excluding amounts paid toindependent contractors who are subject to the control or supervision of any person as tothe manner in which their duties are performed or as to the hours of work or if the amountspaid or payable to them are payable at regular daily, weekly, monthly or other intervals;

This exclusion does not apply to �o any person who receives any remuneration or to whom any remuneration accrues

by reason of any services rendered by such person to or on behalf of a labourbroker;

o any labour broker;o any personal service company;o any personal service trust; oro a person who is not ordinarily resident in South Africa.

· Any pension or additional pension under the Social Assistance Act.

3 Employees Remuneration for UIF, SDL, PAYE


· Any disability grant or additional or supplementary allowance under the Social AssistanceAct.

· Any grant or contribution under the provisions of Section 89 of the Children's Act.· Amounts paid to an employee, wholly in reimbursement of expenditures actually incurred

by such employee (i.e. expenses incurred on behalf of the employer on an agency basis),in the course of employment.

Any allowance or advance in terms of an order of divorce or decree of judicial separation oragreement of separation.

1.2 UIF

Amount on which UIF contributions is determined The amount on which the UIF contribution is based is the total amount of remuneration as definedfor UIF purposes.This remuneration amount is not based on the balance of remuneration and isbasically the defined remuneration before the deduction of any allowable deductions. Note: Allremuneration not included in the definition of remuneration for UIF purposes should be excludedfrom the remuneration for purposes of detemining the UIF liable amount.


INCLUSIONS The following are included in the definition of "remuneration" �· salary

· leave encashment· remuneration for overtime· fees· emolument· superannuation allowance *· bonus· allowances

· retirement allowance *· wage· commission *· voluntary awards· gratuity· annuity *· restraint of trade payments *

· pension *· stipend· lump sum payments *· directors remunerationan amount received or accrued in commutation of amounts due in terms of a contract ofemployment or servicean amount received or accrued in respect of the relinquishment, termination, loss, repudiation,cancellation or variation of an office or employment or of an appointment *50% of an allowance paid or advance given to an employee or holder of a public office in respect ofthe expense of travelling for business purposes (excluding an allowance paid for actual distancetravelled for business purposes, at a rate notexceeding the rate per kilometre fixed by the Minister of Finance in the Government Gazette)fringe benefits received in terms of the Seventh Schedule to the Income Tax Act a gratuity receivedby or accrued to a person from his employer because such person obtained a university degree ordiploma or has been successful in anexamination

4Employees Statutory Remuneration



The following are specifically excluded from "remuneration" and consequentlyno UIF contributions are payable in respect of such income �

Any amounts paid or payable to common law independent contractors (which does not includecontractors who are subject to the control or supervision of any person as to the manner in whichtheir duties are performed or as to the hours of work or if the amounts paid or payable to them arepayable at regular daily, weekly, monthlyor other intervals).· Any pension or allowance in terms of any of the following Acts:

· Aged Persons Act· Blind Persons Act· Disability Grants Act· Children's ActAmounts paid to an employee to reimburse the employee for actual business expenses incurred(i.e. expenses incurred on behalf of the employer on an agency basis), in the course ofemployment.Any allowance or advance in terms of an order of divorce or decree of judicial separation oragreement of separation.

UIF EXCLUSIONS - AMOUNTS EXCLUDED FROM REMUNERATION FOR UIF PURPOSES

Remuneration for UIF purposes does not include any amount paid or payable toan employee �

· by way of commission.· by way of any pension, superannuation allowance or retiring allowance;which constitutes an amount contemplated in the following paragraphs of the definition of grossincome;(a) - by way of annuity,(b) - as compensation for any restraint of trade,(c) - including any voluntary award received or accrued in respect of the relinquishment,termination, loss, repudiation, cancellation or variation of any office or employment or of anyappointment,(d) - lump sum benefits from any pension fund, provident fund or retirement annuity fund,(e) - lump sum benefits from a pension fund (where the rules provide that on retirement a portion ofthe benefit has to be taken in the form of an annuity,etc.);

1.3 SDL

Amount on which SDL is determined The leviable amount is the total amount of remuneration, paid or payable, or deemed to be paid orpayable, by an employer to its employees during any month, as determined in accordance with the4th Schedule provisions for purposes of determining the employer's liability for employees' tax. TheSDL is therefore determine on the balance of remuneration after the deduction of all allowabledeductions (i.e. pension fund contributions, RAF contributions, income protection policy premiums,donations and medical scheme contributions). Note: All remuneration not included in the definitionof remuneration for SDL purposes should be excluded from the balance of remuneration result.


· Salary· Remuneration for overtime· Fees· Leave gratuity

5 Employees Remuneration for UIF, SDL, PAYE


· Bonus· Emolument· Allowances· Gratuity

· Wage· Commission· Stipend· Voluntary awards· Lump sum payments· Directors remuneration· An amount received or accrued in commutation of an amount due in terms of a contract of

employment or service· An amount received or accrued in respect of the relinquishment, termination, loss, repudiation,

cancellation or variation of an office or employment or of an appointment· 50% of an allowance paid or advance given to an employee or holder of a public office in respect

of the expense of travelling for business purposes (excluding an allowance paid for actualdistance travelled not exceeding the rate per kilometre fixed by the Minister of Finance in theGovernment Gazette)

· 50% of an allowance paid to a holder of a public office Fringe benefits received in terms of theSeventh Schedule to the Income Tax Act

· A gratuity received by or accrued to a person from his employer because such person obtained auniversity degree or diploma or was successful in an examination


· Independent contractors � independent contractors who are not subject to control or supervisionof any person as to the manner in which their duties are performed or as to the hours of work orif the amounts paid or payable to them are not payable at regular daily, weekly, monthly or otherintervals.

· Any pension or allowance in terms of any of the following Acts:. Aged Persons Act. Blind Persons Act. Disability Grants Act. Children's Act· Amounts paid to an employee to reimburse the employee for actual business expenses incurred

in the course of his/her employment.Any allowance or advance in terms of an order of divorce or decree of judicial separation or underany agreement of separation.

WHAT AMOUNTS ARE EXCLUDED IN DETERMINING THE LEVIABLE AMOUNT

The amount of remuneration excludes the following amounts for purposes of determining theleviable amount:�· An amount paid or payable to any labour broker and to whom a certificate of exemption has

been issued by the Commissioner for the South African Revenue Service (SARS);

· Any amount paid or payable to any person declared by the Minister of Finance by notice in theGovernment Gazette as an employee;

· An amount paid or payable to any person by way of any pension, superannuating allowance orretiring allowance.

· An amount contemplated in paragraphs (a), (d), (e) or (eA) of the definition of "gross income"in section 1 of the Income Tax Act. In essence this pertains to annuity payments, lump sumpayments from employers upon retrenchment or death and lump sum payments from pension,provident and retirement fund.

· An amount payable to a learner in terms of a contract of employment contemplated in section18(3) of the Skills Development Act.

Employees Remuneration for UIF, SDL, PAYE · 2012-02-24 · Employees Remuneration for UIF, SDL,...

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