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How to calculate employees Covid-19 UIF TERS benefit payout

How do we calculate the benefits payable to employers, on behalf of their employees, in terms of the Covid-19 TERS?
© damedeeso – 123RF.com

Step 1


The employer must calculate the employee's daily income. The calculation will depend on whether the employee is a weekly or monthly earner.

Daily income for weekly earners is calculated by multiplying the employee's weekly rate by 52 and dividing same by 365. For example: R1,000 a week multiplied by 52 (R52,000) divided by 365 equals R142.47 a day.

Daily income for monthly earners is calculated by multiplying the employee's monthly rate by 12 and dividing same by 365. For example: R15,000 a month multiplied by 12 divided by 365 equals R493.15 a day.

Where an employer's remuneration is over R17,712, however, then a maximum amount of R17,712 must be utilised to calculate the daily wage. For example: R17,712 a month multiplied by 12 divided by 365 equals R582.31.

Step 2


The Income Replacement Rate (IRR) must be determined. It is the percentage of the employee's daily income to which they are entitled to in the form of benefits. The daily income determined in step 1 is used to calculate the IRR. The maximum IRR is 60% and the minimum is 38%. The daily income multiplied by the IRR will provide the daily UIF benefit amount payable by the UIF to the employee.

The IRR is calculated in accordance with the following formula:

IRR = 29.2 (7173.92 / (232.92 + Daily rate of income).

For example, 29.2 + (7173.92 / (232.92 + R142.47) equates to 48.31%.

Step 3


Once the daily rate and the IRR have been calculated, then the UIF benefit amount can be calculated. First, one must calculate the daily UIF benefit as follows:

R142.47 multiplied by 48.31% equates to R68.83 per day.

Next, this amount can be multiplied by the amount of days. For instance, R68.83 multiplied by 30 days equates to R2,064.90.

The above calculation process is subject to the following provisos (some of which have already been alluded to above) –

First Proviso: an employee will receive a minimum of R3,500 (subject to the employee not ending up with more than 100% of his/her remuneration once this UIF benefit is added to any other remuneration received);
Second Proviso: an employee may receive no more than R6,638;
Third Proviso: an employer may top up the employee's remuneration provided the top up, taken in conjunction with the UIF benefit (and any remuneration received) may not exceed 100% of the employee's salary.

Step 4


The employer may decide on whether an advance payment, based on the benefit calculation, will be made. If it is an advance payment, the employer must not disclose it in their application for the benefit. If it is disclosed, it will be deemed remuneration / salary which could have an effect on the benefit amount.

Step 5


The employer may decide to pay the employee a portion of their salary during the lockdown. However, the employer must note that the UIF benefit payable to the employee and the salary paid by the employer to the employee should not exceed the employee's total remuneration. If it does, it will have an effect on the UIF benefit amount (as discussed in the above).

Example:
The employee's normal remuneration is R18,640.76, then –
  1. The daily rate will be R17,712 a month multiplied by 12 divided by 365 equals R582,31;
  2. The IRR will be IRR = 29.2 (7173.92 / (232.92 + 582,31) equals 38%;
  3. The UIF benefit amount will be R6,638.40.
However, if the employee receives, for example, a salary of R15,000 during the lockdown period. The UIF benefit will be reduced to R3,640.76 (not R6,638.40) otherwise the employee would end up with more than 100% of R 18,640,76.

Step 6


As discussed above, once the UIF benefit has been paid to the employee, the employer has the option to top up. The top up and the UIF benefit paid to the employee by the UIF must not exceed the employee's total remuneration. If it does, the employer will owe the difference to the UIF. For this reason it would be preferable to obtain the benefit first before electing to make any top up so as to ensure no amounts will have to be paid back to the UIF.

About the author

Andre van Heerden, Senior Associate, Jacques van Wyk, Director, Bradley Workman-Davies, Director, Werksmans Attorneys.
Comment
Anonymous
Good day. I just recieved confirmation that the total of my benefit paid out to me is just R147.50. Is that right? I mean yes my company paid only 50 % (R3800) of my salary but I mean... Only R147.50 from a fund which is prepared to pay over R6000 for other individuals? Please help me as I cannot pay my rent and provide for my family... What's worse is that my industry (hospitality) still won't be opening soon.
Posted on 2 May 2020 04:48
Anonymous
I believe that is your daily rate and not the total to be paid
Posted on 4 May 2020 12:16
iamagem
Good dayI applied online on UIF Covid 19 TERS . The company is paying 50% of the employees salaries. This was stated in the application. UIF declined all the employees stating that The Daily Salary Amount is equal to or exceeds the UIF Daily Benefit AmountShouldn't the employees have qualified for the top-up portion? Could someone please assist.Thank you.
Posted on 4 May 2020 16:20
Sibling
Why would an owner of a company, who is paid a monthly salary and pays UIF, not receive the COVID-19 benefit? Applications was completed listing all UIF paying employees
Posted on 5 May 2020 20:27
Anonymous
Your formula for IRR (Step 2 and further) differs from the one on Labour's Covid 19 FAQ.pdf: You use R239.92 and Labour uses R232.92. Please clarify. Thanks
Posted on 6 May 2020 17:40
Anonymous
that working is not completed. that looks like it is only the daily rate.
Posted on 7 May 2020 13:35
Anonymous
Our company did not apply for the UIF pay out but yet most of the people were on lockdown for April resulting in the company forcing people to take their leave days. We were told that the UIF TERS was to complicated and too little for us so they dont advise it but yet we were forced to take short time for 3 months and give up our leave days. Who do we contact in this regard as we dont have a union and we are loosing out on money. This is a big company in cape town.
Posted on 9 May 2020 22:00
Anonymous
hi i just want to find out how long do you wait for the covid ters fund to pay out, as my company did apply but still no monies was paid out( hospitality industry)
Posted on 12 May 2020 00:46
Anonymous
Good day.. I just want to know is this money that we receive a once off or what. Please i will like to know that.
Posted on 12 May 2020 11:01
Anonymous
Can I claim TERS benefit for my employees if they are working reduced hours due to corona virus lockdown.Question 1Our factory is operational but we have limited work due to lockdownNormally employees work 5 days per week [40 hours per week]Now they only work 3 days per week [30 hours per week]Question 2For how many hours do we claim TERS per week?Can we claim TERS benefit or is there another scheme we can claim for.
Posted on 12 May 2020 15:21
CHECKUIFTERS
Check if your employer was paid.
Posted on 12 May 2020 17:14
Anonymous
I would like to find out as to why do we receive only a once off payment of the uif Ters for covid19. Because we are still not going to work, ist possible to request our employees to submit a second request for uif payout??
Posted on 16 May 2020 20:10
Anonymous
Good day I got paid R4940 and other R1900 so I need to ask if when calvuado we use the gross or net because when I check my employer has calculated 38% on my net salary. So do. We. Use gorss and or the net when calculating.Please assist me in this matter because the uif mentioned no less than 3500 pay out but colleagues got R1900 pay out.
Posted on 19 May 2020 12:33
Estie
Your company can take that as leave but they have to pay you in full then even if you are working shorter hour. I'm opening my store on 2nd June and my staff will be doing shift work and I was advised that I could use their leave for the time off. See if you can get in touch with a labour lawyer or contact Teboho Maruping the labour commissioner on Teboho.Maruping@labour.gov.za. He did respond to me however you might have to wait a while. If he does not respond just mail him again. Good Luck :)
Posted on 29 May 2020 19:46
Estie
I applied on 3rd April and only got paid today except for 2. We were told to register on Ufiling and only then we got paid quite quickly. Ask your employer if you are registered on Ufiling.
Posted on 29 May 2020 19:48
Estie
You need to apply again for May and if off in June.
Posted on 29 May 2020 20:19
Estie
It's calculated on your gross salary :)
Posted on 29 May 2020 20:20

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