Effective 01 October 2012, employers must adjust their UIF contribution calculations to apply the new remuneration limit published by the Minister of Finance on 26 September 2012 (refer Government Gazette no 35715, dated 26 September 2012).
When calculating the 1% contribution deducted from employees and the 1% contributed by employers, a new annual remuneration limit of R178 464 should be applied. This means that employees earning R14 872 per month or more (R178 464 / 12) will now contribute a maximum of R148.72 and their employers will contribute an equal amount.
Currently the earnings limit is set at R12 478 per month (R149 736 /12) which 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.