[Question] Employment question

[Roger15]

Hi there,

In a Company (Pty) or CC / Trust, which does not employ any staff, does the director/member/trustee need to pay over any UIF / Workmans compensation / SDL(the director earns over R500k per annum)?
The director wants to pay PAYE monthly to reduce his provisional tax payments, can he register just for PAYE?
thanks

[Dave A]

Certainly a working director is an employee of the company. PAYE, UIF, SDL (if payroll is over R500k) and Workmans Compensation applies.

[Roger15]

Thanks,

I was under the assumption that a working director of a company doesnt pay UIF as that person would not be able to claim from the fund because of their director status?
Also, how does one define "working director" as I am sure there are many directors who are not involved in the day to day running of the company/CC/Trust?

[Dave A]

I was under the assumption that a working director of a company doesnt pay UIF as that person would not be able to claim from the fund because of their director status?

As a director of a number of companies, I can confirm that UIF contributions are made on my directors emoluments at each of them - or more accurately "was" when my pay was structured that way. When I took up the issue with the auditors, they recommended I took emoluments from one company only, and then raise admin fees from that company to the other companies where I'm also a director, which has proved more "contributions efficient."

I wouldn't know about the prospects for claiming UIF as an unemployed ex-director - never done it - but I'm not aware of anything that prevents you from claiming as long as you are genuinely and completely unemployed.

The reason I've limited these observations to "working director" is I'm not 100% certain of the position relating to "non-working" directors. All I know on this aspect was when I was on the BoD for one of the SETAs, PAYE was deducted and I was issued an IRP5. Whether UIF and other payroll tax contributions were paid over, I have no idea. It was before the time of the current IRP5 where there's so much more disclosure.

[Cheery]

Certainly a working director is an employee of the company. PAYE, UIF, SDL (if payroll is over R500k) and Workmans Compensation applies.

I have a question about this,
How am I able to take money out of the company to pay the directors, what are the steps to follow?
Also, how can I take money out of the company to pay back the directors for investments made?

Thanks

[Andromeda]

I have a question about this,
How am I able to take money out of the company to pay the directors, what are the steps to follow?
Also, how can I take money out of the company to pay back the directors for investments made?

Thanks

In answer to the 1st question, I presume they work at the company? If that is so then they are Executive Directors and like anyone they can earn a salary for the non-director services they provide to the company. Like you and I they would simply be an employee, be on the payroll and like Dave A said, pay PAYE, UIF and the comapny would pay SDL and WCC.

The 2nd question is dividends. (I assume that their loan accounts are zero. If they are in credit then you would probably first settle those, because the settlement is obviously not taxed.) Dividends are taxable at 20%.