UIF Changes and Updates for 2025/2026: What You Need to Know
The Quick Answer
While official announcements are pending, the most anticipated potential change for UIF in 2025/2026 is an increase to the monthly salary ceiling (currently R17,712) to account for inflation. Contribution rates (1% employee, 1% employer) are expected to remain unchanged. Always verify with official SARS or Department of Labour channels after the budget speech.
Anticipated Changes for the 2025/2026 Tax Year
Based on historical patterns and economic factors, here are the most likely areas for adjustment. These are projections until officially confirmed by the Minister of Finance.
1. Salary Threshold and Benefit Ceiling Increase
This is the most expected and significant change every year.
- Current (2024/2025): The maximum salary on which UIF contributions and benefits are calculated is R 17,712.00 per month.
- Projection (2025/2026): This ceiling is typically adjusted upwards annually to keep pace with inflation and average wage growth. An increase of between 5% and 6% would bring the new cap to approximately R 18,600.00 to R 18,780.00 per month.
- Impact: For employees earning above the current cap, this means slightly higher contributions but also a slightly higher potential benefit. For example, an employee earning R40,000 would see a small increase in their monthly UIF deduction.
2. Contribution Rates
The contribution structure itself is expected to remain stable.
- Current (2024/2025): Employee contributes 1%, employer contributes 1% (total 2%).
- Projection (2025/2026): No change to these rates is anticipated. The 2% total contribution has been a long-standing figure and is considered sustainable for the fund.
3. Income Replacement Rate (IRR) Formula
The sliding scale formula that determines the percentage of income replaced is set by legislation and is unlikely to change.
- Formula: IRR = 29.2 + (7173.92 / (Daily Income + 232.92))
- Projection (2025/2026): This formula is expected to remain the same, meaning the benefit calculation method will be consistent, just applied to the new, higher salary cap.
Example Calculation with Projected Changes
Let's compare the potential impact for a high earner if the cap increases. Assume the new cap is set at R 18,600.00 for the 2025/2026 tax year.
| Description | 2024/2025 (Current) | 2025/2026 (Projected) |
|---|---|---|
| Monthly Salary Cap | R 17,712.00 | R 18,600.00 (est.) |
| Max. Employee Contribution | R 177.12 | R 186.00 |
| Max. Employer Contribution | R 177.12 | R 186.00 |
| Daily Income for Calculation (for someone earning ≥ cap) | R 582.31 | R 611.51 |
| Estimated Daily Benefit (using ~38% IRR) | R 221.28 | R 232.37 |
This shows a modest increase in both the cost (contributions) and the potential benefit for those above the threshold.
Staying Compliant: Actionable Advice
- Wait for the Official Announcement: The changes will be officially confirmed in the National Budget Speech, typically delivered in February 2025. Do not implement changes based on projections alone.
- Update Your Payroll Systems: Employers and payroll administrators should be ready to update their software systems immediately after the official announcement to ensure correct deductions are made from the effective date (likely 1 March 2025).
- Communicate with Employees: Employers should clearly communicate any changes in deduction amounts on payslips to avoid confusion among staff.
- Verify on Official Channels: After the budget speech, always confirm the new figures on the official SARS or National Treasury websites. Do not rely on second-hand news reports for your financial calculations.
Beyond 2025/2026: Longer-Term Considerations
While not confirmed for the upcoming year, there is ongoing discussion about more fundamental reforms to the UIF system, such as:
- Extended Benefits: Debates around extending the maximum benefit period beyond 365 days during severe economic crises.
- Inclusion of Gig Workers: Exploring ways to provide coverage for freelance and platform-based workers who are currently excluded.
- Digital Transformation: Continued improvements to the uFiling system to reduce processing times and improve user experience.
With the potential for the salary cap to change, calculating your benefits or contributions manually becomes even more complex. Our UIF calculator is updated promptly each year with the latest official figures from SARS. Once the 2025/2026 changes are confirmed, you can use it to get instant and accurate estimates for both contributions and benefits, ensuring you're always working with the correct numbers.