Earnings Threshold

Basic Conditions of Employment Act

The Basic Conditions of Employment Act provides that employees earning above a certain amount are excluded from some sections of the BCEA.  The amount usually changes annually, but has remained unchanged since it was changed in July 2014.

 

The current threshold is R 205,433.30 per year (or R17,119.44 per month).  The section concerning working hours in the Act will not apply to employees earning in excess of these amounts, more specifically –

 

“Earnings” means gross pay before deductions for tax, medical and other payments.  It does not include employer contributions.

 

The sections from which these employees are excluded –

 

  1. Ordinary hours of work
  2. Overtime
  3. Compressed working week
  4. Averaging of hours of work
  5. Determination of hours of work by Minister
  6. Meal intervals
  7. Daily and weekly rest period
  8. Pay for work on Sundays
  9. Night work (17(2) – that deals with transport and night shift allowances
  10. Public holidays – 18(3) that deals with payment for work on a public holiday that falls on a day that the employee would ordinarily not have worked

 

Employees earning under the threshold amount have the full protection of every section of the Basic Conditions of Employment Act (BCEA).

 

 Unemployment Insurance Act

 

The Unemployment Insurance Act provides protection to workers who become unemployed. It prescribes claiming unemployment benefits for unemployment, maternity benefits, illness benefits, adoption benefits and dependents’ benefits.

 

The Unemployment Insurance Act and Unemployment Insurance Contributions Act apply to all employers and workers, but not to –

 

  • workers working less than 24 hours a month for an employer;
  • learners;
  • public servants;
  • foreigners working on contract;
  • workers who get a monthly State (old age) pension; or
  • workers who only earn commission.

 

Domestic employers and their workers are included under the Act since 1 April 2003.

 

The threshold is R149,736.00 per annum (or R12,478 per month).  Employers must contribute 1% and employees 1% (via salary deduction), so the total paid to UIF is 2% of earnings.

 

All people who receive a salary or wages must contribute to the Fund and all employers who employ people must register for and pay over UIF.