LSB2605 Assignment 1 |DETAILED ANSWERS| Semester 2 2025 - DUE 28 August 2025

, LSB2605 Assignment 1
Semester 2 2025
DUE 28 August 2025
Use this document as a guide and for references to answer your assignment

ABC (Pty) Ltd employs Zanele on a fixed-term contract for 12 months and pays her a salary of R30,000
per month. They also agree to pay her a bonus of R15,000 at the end of the contract if she meets
certain targets during her employment.

1. Calculate the total amount of Unemployment Insurance Fund (UIF)
contributions that will be due during the entire term of the contract. (8)

Step 1: Understand UIF rules in South Africa

 Both employer and employee contribute to UIF.
 The contribution rate is 1% of remuneration by the employee, and 1% by
the employer (total = 2%).
 UIF is payable on all remuneration (salary + bonuses), up to the UIF ceiling
of R17,712 per month (as of 2023/24).

So, if the salary exceeds R17,712 per month, we must use R17,712 as the
maximum for UIF calculations.



Step 2: Identify Zanele’s earnings

 Monthly salary = R30,000 (which is above the UIF ceiling).
 Bonus at end of contract = R15,000.

Since UIF has a ceiling, contributions are based on R17,712 per month, not
R30,000.



Step 3: UIF contributions on salary

 UIF salary base per month = R17,712
 Contribution rate = 2% (combined employer + employee)