Legal updates and opinions
News / News
Temporary Employer / Employee Relief Scheme: tax implications
by Doelie, Lessing, Director and Andre van Heerden, Senior Associate
On 16 April 2020 the Minister of Employment and Labour issued amendments to the directives governing the Covid-19 Temporary Employer / Employee Relief Scheme (“TERS“). These must still be published in the Government Gazette. The directives provide, among others, that in order to speed up payment of Covid-19 benefits to employees, employers are urged to pay employees benefits in advance and then reimburse or set off such amounts against funds received from the Unemployment Insurance Fund (“UIF“).
While there are no express tax regulations/directives or amendments issued on whether employers should be treated as ‘agents’ when collecting payment from the UIF there is a strong basis to argue that this is the case and that the payment of these amounts to the employees should not result in a PAYE liability on the TERS benefits. PAYE must, therefore, not be deducted from the TERS benefits. It is also arguable that employees should be exempt from paying tax on the benefits received, as the tax legislation provides for a general exemption from tax of benefits or allowances payable in terms of the Unemployment Insurance Act – provided that the TERS benefits are legally payable in terms of that Act (which appears to be the intention). It is advisable, when affecting electronic payments to the employees’ bank accounts, that the amounts clearly be recorded as ‘UIF TERS benefits.’ This clearly distinguish the payments from any remuneration payments ordinarily received.
Should you require any formal advice regarding the above please do not hesitate to contact us.
Latest News
B= BREXIT – ADVICE TO BRAND OWNERS
By Donvay Wegierski, Director The initial Brexit date of 29 March 2019 was re-scheduled to 31 October 2019 – deal [...]
CANCELLED OR PARTIALLY CANCELLED TRADE MARKS – SOME TAKE AWAYS
By Donvay Wegierski, Director The European Union's Trade Mark office (EUIPO) has this year cancelled McDonald's European Union Trade Mark [...]
BANKSY AND GROSS DOMESTIC PRODUCT
By Janine Hollesen, Director We have written about the risks of not using a trade mark which could lead to [...]
CANNABIS REMAINS ABUZZ
By Donvay Wegierski, Director An adult may possess and use cannabis in private for personal consumption in South Africa. This [...]
Recognising subtle forms of sexual harassment in the workplace
The #METOO movement has correctly focused public attention on inappropriate workplace conduct. After all of the media attention, the obvious ways [...]
All beliefs are created equal – or are they?
Did you know that your beliefs may be protected by labour laws? But how far do these protections extend – [...]
