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Workmen’s Compensation Return | Submission by 31 May 2018

Background

It is compulsory for any person / legal entity that employs staff (“the employer”) to register as an employer with the Department of Labour within seven days of the date the first employee was employed.

Each employer is required to submit a Return of Earnings (“W.As 8 return” or “Workmen’s Compensation Return” as it is commonly known) each year. This year’s return spanning the period 1 March 2017 to 28 February 2018 (the 2017 return) is due at the end of May.

It is therefore important that care should be taken to submit this return on time as late submission may result in a penalty of 10% of the final assessment.

Purpose of Workmen’s Compensation:

When an employee has an accident, or contracts an occupational disease at work that results in his disability or death, such employee or his dependants will be entitled to the benefits provided for in the Occupational Injuries and Diseases Act.

Information used in calculating the amount payable on the return:

We are often asked whether certain employees should be included in the calculation. Apart from the permanent salaried and wage staff, the following employees should also be included in the calculation:

  • An employee under a learnership or apprenticeship,
  • A casual/temporary employee,
  • A director or member of a close corporation who has entered into a contract with the body corporate.

Persons excluded:

  • Drawings made by a person who trades as a sole trader / trades in his/her personal capacity (drawings do not constitute employees’ remuneration);
  • A person employed by the State to perform military service;
  • A member of the Permanent Force of the South African Defence Force:
  • A member of the South African Police Service;
  • A person who contracts for the carrying out of work and engages someone else to perform such work; and
  • A gardener or domestic worker employed in a private household.

Earnings referred to in the return are all payments made regularly, before any deductions, to employees (it includes non-cash benefits). The following are therefore also included:

  • Overtime of a regular nature, not intermittent or irregular overtime.
  • Bonuses of any kind, including incentive bonuses and annual bonuses.
  • Commission, even though the amount may vary from month to month.
  • The cash value of food and quarters supplied to employees as part of a remuneration package.
  • Cash value of fringe benefits such as a company car, free accommodation or accommodation at a reduced rate, etc.
  • Travel and other allowances paid regularly, as part of the package.
  • Where the employee is remunerated in accordance with a package of benefits, all items forming part of the package, other than employer contributions such as medical aid contributions.
  • Earnings/drawings paid to working directors of a company or members of a close corporation.

Excluded are the following:

  • Payments of a reimbursive nature.
  • Overtime worked occasionally.
  • Payments for specific non-recurring tasks which do not form part of an employee’s normal duties.
  • Ex gratia payments.
  • Intangible fringe benefits such as the taxable portion of medical aid/pension contributions by the employer, etc.
  • Payments to cover special expenses such as subsistence and travelling costs, lunch and costs for business meetings.
  • Travel and other allowances paid occasionally.
  • Profit sharing of directors and members.

Please note that the earnings limit for the 2017 – 2018 tax year is R 403 500 and the limit for the 2018 – 2019 tax year is R 430 944. In other words, for staff earning more than these limits, only the limit is taken into consideration.

If you require assistance with the return, please contact either Corne Moss or Charlene van Rensburg at our offices on 021 840 1600 / salaries@asl.co.za. We will gladly ensure that your return is completed correctly and submitted on time.