The COVID-19 pandemic is certainly challenging all of us to change the way that we do things. Amongst the most hard hit is the business sector which is increasingly unable to operate at full capacity as a result of constraints put in place to flatten the curve of the spread of the virus, and also as a result of an increasing number of employees needing to self-isolate or self-quarantine due to infection or exposure to the virus. Government has put measures in place to assist its citizens in staying afloat. Herewith a summary of information that is currently known to us:
If you are a tax compliant employer, with a turnover of less than R50m, SARS will allow you to postpone the payment of up to 20% of your PAYE (Pay-As-You-Earn) bill over the next four months. It needs to be clarified how this will be implemented and whether the first allowable postponement will apply to PAYE due on or before 7 April (based on salaries for March), or whether it would only be applicable to PAYE due on 7 May (based on salaries for April).
There will be a tax subsidy of up to R500 per month for the next four months for employees in the private sector who earn less than R6,500. This will be implemented under the Employment Tax Incentive (ETI) scheme. It is yet to be clarified how this will be applied and whether the employer or the employee, or both would benefit from the tax subsidy.
The Department of Labour has published new regulations which outline South Africa’s new Covid-19 Temporary Employee/Employer Relief Scheme (TERS). The regulations note that during the country’s 21-day lockdown, companies will have to shut down and employees laid off temporarily. This means that employees are compelled to take leave, which is not out of choice, and employees are likely to lose income.
While employers are encouraged to continue to pay employees, where this is not economically possible, the Department of Labour says it has created a special benefit under the Unemployment Insurance Fund (UIF) as per the TERS.
Where an employee is in quarantine for 14 days due to Covid-19 pandemic, the employee shall qualify for illness benefit.
In terms of the regulations:
Employers can apply by reporting their closure by emailing email@example.com and there shall be an automatic response outlining the application process.
Employers will be required to furnish the Unemployment Insurance Fund with the following completed documents:
It should be noted that an employee who is being paid by the employer during this period is not entitled to this benefit.
Instances where companies decide to close for a short period as a pre-cautionary measure or where a contributor (employee) loses his or her income due to reduced working time, despite still being employed is entitled to claim benefits from the UIF.
A claim can be lodged through the:
A detailed guide and contact details can be downloaded from the Department of Labour website:
Registration is now open for small and medium-sized businesses to ask for government help during the coronavirus disaster. A special website for the department of small business development, at www.smmesa.gov.za, started accepting details late on Monday night 23 March 2020. Companies can specify the kind of assistance they require, but there is no indication what might be on offer.