UIF requirements?

[Nomad]

Hi folks, I would appreciate some advice on paying UIF. I was employed full time and have recently decided to operate as an independent contractor. I currently have 2 clients (one of which is my former employer) based on long-term contracts which in essence result in me receiving a monthly retainer of varying amounts depending on time billed. Does anyone know whether/how I should be contributing to UIF. If I draw in additional clients, should I be paying UIF based on my overall monthly income or should it be based on the amount received from each client? Should my clients be deducting UIF from my monthly payments?

Thanks in advance for the advice!

[Dave A]

Are you operating as a sole proprietor or within a cc?

[Retha]

Employers deduct and pay over UIF for employees, together with the business share of it. Clients, suppliers, and contractors between themselves have nothing to do with UIF. If you are the only 'employee' in this business of operating as a contractor, it will be mighty strange to register for UIF and pay over UIF, except if you plan to claim UIF next time you are out of a job!

Experts, please correct me if I am wrong!

[Dave A]

You're on the right track, Rheta. There needs to be an employer/employee relationship, hence the question on structure.

[Nomad]

Many thanks for the quick advice. I am acting as a sole proprietor and am new to working in this mode (hence the need for business advice!). If anyone has any additional words of wisdom on legal/tax requirements as a sole proprietor I would be most grateful

[Dave A]

In that case, Nomad, you need only register with UIF as an employer (and start paying contributions) once you employ someone.

The good news is no UIF, Workmans Compensation and SDL contributions. The bad news - you've got no unemployment benefit and workmans compensation cover for yourself for as long as you remain a sole proprietor.

On the tax side, you probably should check if you qualify for the small business turnover tax option - and if so, whether it would be worth your while to register with SARS accordingly.