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
National Land Reform Summit considers new modes of landholding tenure
Deputy President David Mabuza leading Inter-Ministerial Committee on land reform convened the Communal Land Administration and Tenure Summit on 27 [...]
Junior Mining Indaba 2022
The Junior Indaba took place on 1 and 2 June 2022 at the Johannesburg Country Club for junior miners. The [...]
Topic – Part 3: The Cutting Red Tape Project
Proposed amendments to the JSE Listings Requirements On 5 March 2021, the Issuer Regulation Division of the JSE issued a [...]
Business Rescue Practitioner in South Africa
Business Rescue Practitioner 1. What is the role of the business rescue practitioner? The business rescue practitioner is required, as [...]
Section 150A LRA intervention in the Sibanye-Stillwater deadlock?
After a lengthy period of striking - nearly 3 (three) months - over wage increases at Sibanye's gold operations, the [...]
Technology, Media and Telecommunications Africa Quarterly e‑Bulletin | May 2022
Botswana Broadband Facts and Figures Report, 2021 On 21 January 2022, the Botswana Communications Regulatory Authority (BOCRA) published its Broadband [...]
