A company hasn't reduced salaries at yet but has had loss of income. The company is exploring all avenues before reducing salaries. Can a claim for TERS be submitted for the month of April 2020? What proof is required to be submitted to claim TERS?
Author: The Payroll Authors Group of South Africa
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
TERS benefits can only be applied for where employee has not been paid their full monthly salaries. If the employees were paid their full monthly salaries for April, and this was as a result of leave (during the lockdown), please note the following: In terms of the directive issued by the Minister of Employment and Labour, paragraph 5.4 state: An employer, who has required an employee to take annual leave during the lockdown in terms of section 22(1)(b) of the Basic Conditions of Employment Act, 1997, may set off any amount received from the UIF in respect of that employee’s Covid-19 benefit against the amount paid to the employee in respect of annual leave, provided that the employee is credited with the proportionate entitlement to paid annual leave in future. In terms of the directive issued by the Minister of Employment and Labour, paragraph 5.5 state: To speed payment of Covid-19 benefits to employees, employers are urged to pay employees based on clause 3.4 of the Directive and reimburse or set off such with Covid-19 benefits claim payments from UIF. The following link can be use to access the latest directive: http://www.labour.gov.za/DocumentCenter/Publications/Unemployment%20Insurance%20Fund/CONSOLIDATED%20COVID.pdf http://www.labour.gov.za/DocumentCenter/Publications/Unemployment%20Insurance%20Fund/New%20Directive.pdf My suggestion is that you submit a claim, without the remuneration for the “unpaid” leave days. In other words, you’ll declare (as “remuneration paid during shutdown”) whatever you paid to the employees which you were not planning to deduct in the following months. You ultimately want to recover the “advance” payments which you made to them, in other words, the portion of the remuneration which will not be paid by you (the employer). If you declare the full salary, the Fund will not pay the benefit – which will be incorrect. If the benefit is paid, you should not subtract the unpaid leave days either from their leave or as a monetary value as this would have been covered by the TERS payment. As a note, you can also actually claim the “paid leave” for employees who had to take their annual leave due to the partial/total closure of the business. For more information on what is required during the TERS application process, please refer to the attached documents: · TERS easy guide · UIF FAQ