Tag Archive: UIF


A Legislative Look at 2013

By Rob Cooper, Director of Legislation Updates and Proposed Legislation at Softline VIP, part of the Sage Group plc.

Rob Cooper

Rob Cooper

The dawn of 2013 brings a number of legislative changes that are looming on the horizon.

Proposed changes to the South African Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA) are on the cards for 2013 in the wake of massive protest action that has crippled the country.  Some of the proposed changes include the fact that minimum wages can be prescribed by the Minister of Labour.  Public officials are also proposed to have the power to prohibit strikes in their sectors.  It is also proposed that Unions must ballot and get majority agreement to strike or picket, but there is strong opposition from Cosatu who see this as a curtailment of their freedom to strike and one wonders whether this will be in the final legislation.

Fortunately, the debate whether labour brokers should be closed down or regulated, seems to have gone the way of stricter regulation.  A decision has however been passed that ‘Atypical’ employees become ‘Deemed’ employees after six months.  The upheaval in the industry has seen the number of labour brokers dramatically reduce from 3,234 in 2010 to 2,685 in 2011.

These proposals have been pushed through Nedlac, despite labour and business differences.  Parliament’s labour portfolio committee is to finalise last ‘discussions’ with amendments to the respective bills having been published on 22 October 2012.  The effective date is yet to be announced.

Employment Equity Act proposals were recently released by Nedlac that will see the act continuing to focus on provincial targets instead of national demographic targets.  Increased fines and powers are proposed in addition to the introduction of the concept of equal pay for work of equal value.  These proposals could quite possibly be rolled out in conjunction with the BCEA and LRA amendments.

South Africa has a Total of 19,5 million unemployed people, of whom 4,5 million are ‘officially’ unemployed in addition to 60% not having a matric.  Of the youth under the age of 25, around 50% are unemployed.  Unfortunately the Youth Subsidy, which had reached a fairly advanced stage, was given the political boot at the ANC’s June policy conference, to be replaced by a ‘Job seeker Grant’, of which there are no details available.  It is expected that more information will be released at the Mangaung elective conference.

Tax Relief for Medical Expenses is expected to change in either March 2013 or March 2014, from a deduction calculation to a ‘Medical Tax Credit’ method of calculation. Contribution expenses for all taxpayers are to be defined, while an assessment method to calculate the tax relief on total medical expenses is to be tabled.  These proposals will result in a gradual reduction of the value of our current tax relief which has been the trend over the past two years.

The National Health Insurance project is set to be a fourteen year project of which the total cost is still being debated.  The Budget 2012 funding options were to increase the VAT rate; or to increase the surcharge on taxable income; or to introduce a payroll tax contribution.  Thus far the Medium Term Budget Policy Statement remained silent on the subject, though a Treasury discussion document is expected soon.

There will be a major move towards the standardisation of retirement funds and there are many reasons for the proposed changes.  The poor performance by some private retirement funds is a major catalyst as is the prevailing low retirement savings level in the country.  Also the tax and administration rules around retirement funds are simply too complex.

The purpose of the change is to ensure that all retirement funds have the same administration and tax rules.  The intention is to utilise the tax and administration rules that are applicable to retirement annuities and to replicate it for retirement funds.  There are many ‘vested interests’ to be protected and it will only be applicable to South African residents.  The roll-out is tentatively planned for March 2014.

Proposals for a National Retirement Fund have also been tabled, which will take the form of a mandatory statutory fund that provides pension, life insurance and disability benefits.  The fund is to be phased in over the next four years and will place pressure on the private sector retirement funds.

Proposed changes to the Unemployment Insurance Act will affect ‘Credit days’ which is proposed to be calculated as one calendar day for every four calendar days employed.  The proposal will also see an increase in the income replacement rate and may remove certain exclusions or limitations in the Act.

The introduction of the virtual UIF office system allows individuals to apply for UIF benefits electronically.  It effectively eliminates the need to queue at the labour office, reduces the cost of ‘accessing’ the benefit and reduces the benefit approval time from about four weeks to 48 hours.

These are just some of the changes lined up for 2013 and we will continue the discussion as we near the budget speech in the New Year.

Softline Pastel, South Africa’s leading developer of business and accounting software, today launched a portal for its range of online applications. The platform, known as Sage Pastel Online, provides the entrepreneur on-the-go one central location to access the company’s bouquet of cloud-based business tools, making running a small business a little easier.

Pastel Accounting launched South Africa’s first online accounting program, My Business Online, in May 2009 and since then has brought several online innovations to the local SME market.

“Times have changed,” says Steven Cohen, managing director of Pastel Accounting. “We have entered an age where technology is pervasive, allowing us more mobility than ever – and business has to be part of the revolution to remain competitive.”

The portal can be found at www.sagepastelonline.com and offers online accounting, payroll and marketing services – allowing business owners the freedom to run their businesses at any time from anywhere. Additionally, Pastel’s BEE one-stop-information-hub, BEE123 and brand new free-to-all-users personal finance applications are also available in the same location.

Pastel My Business Online is a full-function accounting program, designed specifically for the small business owner. All accounting lingo has been changed to simple English, so even the layman can manage the business’s books. It’s a multi-user system with dashboards, graphs and drill-downs to source transactions that provide a bird’s eye view of the business. The system allows users to manage customers, suppliers and inventory items and keeps track of sales and purchases. It comes with a comprehensive list of reports so that month-end management packs are quick and easy to create.

Pastel My Payroll Online is a simple payroll solution that allows SME owners to pay their employees anywhere, anytime.  It’s a SARS compliant system aligned to even the most complex legislation, including PAYE and UIF. Users can also process leave online with leave types already defined according to the BCEA requirements. Like, My Business, My Payroll contains no confusing jargon.

Did you know 70% of SMEs don’t have a website, or at least one with limited marketing capabilities or integration with smartphones and social media. Pastel My Webspace is an online marketing engine for SMEs with an HTML5 website builder designed for optimal marketing and e-commerce capabilities. In addition My Brand will manage users’ search engine optimisation, and mobile and social media integration. My Brand effectively integrates everything for the user and provides an all-in-one e-marketing service with analytics, social media insights, and creating and mailing a fully dynamic newsletter with marketing feedback.

“Moving your business applications online is a must for anyone who wants to ensure that they remain at the cutting edge of service delivery,” said Cohen at the launch event that celebrated the mobile business of the future.

As part of Pastel’s drive for business mobility, it has also formed a relationship with Samsung Enterprise Mobility. Selected Samsung devices will now come preloaded with the My Business Online Android app and Pastel is a reseller of Samsung’s SIII, Note and Tablet devices; all preloaded with a year’s free access to Pastel My Business Online. The devices will be available for purchase via the Pastel Webstore.

A new remuneration limit published in the Government Gazette after being approved by Finance Minister Pravin Gordhan directs employers to adjust their UIF contribution calculations to comply with the new limit from 01 October 2012.

From now on employers must apply a new annual remuneration limit of R174 464 when calculating the 1% contribution deducted from employees and the 1% contributed by employers.

“As a result, employees earning R14 872 or more a month (R178 464 a year) will now contribute a maximum of R148.72 and their employers will contribute an equal amount,” says Philip Meyer, technology director of payroll and HR software specialist Pastel Payroll, part of the Softline Group and Sage Group plc.

“At the moment the earnings limit is set at R12 478 a month or R149 736 a year. The new limit means that employees whose earnings exceed the current limit will see a reduction in their net pay from October 2012 as their UIF contribution deduction will be slightly higher to accommodate the remuneration limit increase.

“Employers will see a similar effect as their portion of the UIF contribution increases to ultimately result in an increase in salary related expenses.”

Meyer adds that companies without payroll software solutions will have to manually change or update their payslip calculations to apply the new UIF limit before processing any salaries or wages for October.

“For our Pastel Partner Payroll software users a ‘frictionless’ update is being released to ensure users of the software can process their payrolls using the latest UIF remuneration limits, therefore no CD installations are required.”