How UIF contributions work
Under the Unemployment Insurance Contributions Act, the employer deducts 1% from the employee’s remuneration and adds a matching 1% of its own. Both are paid to SARS (or the UIF directly, for some employers) every month.
Remuneration for UIF = the lesser of monthly remuneration and R17 712 Employee contribution = 1% × remuneration for UIF Employer contribution = 1% × remuneration for UIF
How the benefit estimate works
The Department of Employment and Labour publishes the formula used for normal unemployment benefits:
Y1 (daily income) = average monthly pay (capped at R17 712) × 12 ÷ 365 Income replacement rate (IRR) = 29.2 + 7 173.92 ÷ (232.92 + Y1) (as a percentage) Daily benefit = Y1 × IRR Total benefit = daily benefit × credit days (max 365)
At the ceiling of R17 712 the daily income is R582.31, the replacement rate is 38% and the daily benefit is R221.28 — exactly the Department’s own worked example.
Important
The benefit figure is an estimate. The Fund decides your final benefit based on its records of your contributions and credits, the reason your employment ended and the law in force when you claim.
Worked examples
Domestic worker earning R6 000 a month
The worker and employer each pay R60 a month. Because lower earners get a higher income replacement rate, the benefit replaces a larger share of their pay.
Contributions
- Your remuneration
- R6 000.00
- Remuneration used for UIF
- R6 000.00
- Employee (1%)
- R60.00
- Employer (1%)
- R60.00
- Total per month
- R120.00
- Your contribution per year
- R720.00
- Total per year (employee + employer)
- R1 440.00
Employee earning R40 000 a month
Contributions are capped at the R17 712 ceiling, so each side pays R177.12. Benefits are also based on the capped amount.
Contributions
- Your remuneration
- R40 000.00
- Remuneration used for UIFCapped at the ceiling of R17 712
- R17 712.00
- Employee (1%)
- R177.12
- Employer (1%)
- R177.12
- Total per month
- R354.24
- Your contribution per year
- R2 125.44
- Total per year (employee + employer)
- R4 250.88
Frequently asked questions
How much is UIF per month?
Employees pay 1% of their remuneration and employers pay another 1%, up to a monthly remuneration ceiling of R17 712. The most each side pays is R177.12 a month.
Who must contribute to UIF?
Most employers and employees working more than 24 hours a month, including domestic and farm workers. A few categories of employee are excluded — the Department of Employment and Labour lists them.
How is the UIF benefit calculated?
The Fund works out your daily pay from your average monthly pay over the last six months (capped at R17 712), applies an income replacement rate of between about 38% and 60% (lower earners get the higher rate), and multiplies the daily benefit by the credit days you have built up.
How many days of UIF can I claim?
You earn one credit day for every four days you worked as a contributor, up to 365 days in a four-year period.
Can I claim UIF if I resign?
Generally no. Unemployment benefits are for people who lose their job through dismissal, retrenchment or a contract ending. Separate UIF benefits exist for maternity, illness and adoption.