How much is unemployment insurance fund in South Africa?

Employers must pay unemployment insurance contributions of 2% of the value of each worker’s pay per month. The employer and the worker each contribute 1%.

Section 5 of the Unemployment Insurance Contributions Act states that every employer and every employee must contribute to the Unemployment Insurance Fund, provided that it applies to them. This means that UIF is calculated per source of income. Therefore, if an employee works for multiple employers, they must pay UIF with each employer, even though the cap may be reached with one employer.

For example, if an employee works at two different companies and each company pays them R20 000, they will contribute R177.12 per month to the UIF from each salary (i.e. a total of R354.24 would be contributed per month). Their contribution is not limited to a cap of R177.12 across all sources of income.

If the employee were to become retrenched with both companies,

The Unemployment Insurance Act and Unemployment Insurance Contributions Act apply to all employers and workers (including domestic workers), all of whom should contribute to UIF. However, the following workers do not have to make contributions to UIF: workers working less than 24 hours a month for an employer; learners; public servants; foreign nationals working on temporary contract; workers who get a monthly State (old age) pension; or, workers who only earn commission.

The following people must contribute to UIF when formally employed (unless excluded as above):

All persons lawfully employed in South Africa, such as:

  1. South African Citizens with a 13-Digit ID,
  2. Refugees with a Refugee Certificate or Refugee ID issued in terms of the Refugees Act,
  3. Asylum seekers with an Asylum Seeker Permit or Visa issued in terms of the Refugees Act; or
  4. Foreign nationals with valid passport/permit or 13-Digit ID (in the case of permanent residents).

As a worker, 2% of your monthly salary must be contributed to UIF. Your employer must contribute 1% and you must contribute 1%. This should be deducted from your monthly salary, and should be reflected on your pay slip. Every employee has the right to a pay slip and a written contract.

If you are not sure if you or your employer are supposed to pay contributions to UIF, speak to an official of the Department of Labour at the nearest Labour Centre.