Employers: Your COIDA Return of Earnings Deadline is 30 June 2024
“The Compensation Fund is mandated to provide social security to the injured-on-duty employees and those who contracted diseases at the workplace.” (Compensation Fund Annual Report 2021/2022)
By law, all employers are compelled to register for COIDA (Compensation for Occupational Injuries and Diseases Act No. 130 of 1993) within 7 days of employing their first employee.
COIDA provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees during the course of their employment, or for death resulting from such injuries or diseases, in which case the dependents can claim compensation.
Without this ‘insurance’, employers are held liable for the costs of an injured employee’s medical treatment and are also open to civil claims in respect of medical costs and compensation for loss of earnings, permanent disablement, death and even pension payments.
In addition, failure to comply with the provisions of COIDA constitutes a criminal offense. On the other hand, employers that meet the requirements and have paid the assessment fees can request a Letter of Good Standing (LOGS), a document often required when tendering for substantial projects or new business.
To access this ‘insurance’ for their employees, employers are required to register and contribute a fee to the Compensation Fund (CF) each year. In doing so, employers must also submit a Return of Earnings (ROE) every year.
The ROE is a declaration of employees’ earnings for the past year, made by the employer to the Compensation Fund, and the ROE for the 2023 assessment period is now due at the end of June for all employers.
What must be done
- Register with the Compensation Fund, if not yet registered. The 12-digit CF registration number starting with 99 is required for submissions and payments.
- Prepare the required information to be submitted for the 2023 assessment period, which extended from 1 March 2023 to 29 February 2024.
- Earnings to be included in the declaration are regular overtime, regular bonusses (e.g. annual bonusses), cash value of fringe benefits and earnings or drawings paid to working company directors or members of close corporations.
- For each month, actual earnings for the period, and head count including directors and members.
- Projected earnings and head count for the year ahead.
- Submit the Return of Earnings (ROE), also known as the 2A Form (W.As.8), as well as the list of required supporting documents, within the deadline.
- Make sure the correct nature of business or assessment tariff subclass is used.
- There are more than a hundred subclasses, each with its own assessment tariff based on the risks associated with the type of work.
- The annual assessment fee is calculated with the relevant assessment tariff and on workers’ earnings. (Formula Assessment Fee = total workers’ pay ÷ 100 x assessment tariff)
- In addition, if an employer’s accident costs are higher than others in the same subclass, the assessment tariff may be increased. If costs are lower, the rate may be reduced.
- Ensure a Notice of Assessment/Invoice (W.As.6) is received, showing the amount owing to the Compensation Commissioner based on the salary information contained in the ROE and the correct assessment tariff.
- Pay the COIDA invoice by the due date.
- Report any accidents or incidents at work timeously.
- Practice meticulous record-keeping.
- Inform the Compensation Fund of any changes to the business, including when a business ceases to exist, within the timeframe allowed.
- The earnings amounts declared are capped to an amount of R568 959 per person for the 1st March 2023 – 29th Feb 2024 financial period and R597 328 for the provisional figures relating to the period 1st March 2024 – 28th Feb 2025.
- It is important to make use of the correct reference (found on the compensation fund invoice) when making payment. Otherwise, the funds will not be allocated against the correct account and sit in suspense, until an affidavit is submitted to the DoL requesting that the allocation be corrected.
What are the deadlines?
- 30 June 2024: Return of Earnings (ROE) submission.
- 30 days from the invoice date: payment of the COIDA invoice.
- Within 7 days: Report any changes to the business to the Compensation Fund.
What are the consequences of non-compliance?
- A penalty of 10% will be charged on returns submitted late.
- Interest will be charged on accounts after 30 days from the invoice date.
- Employers facing payment challenges can request an instalment plan.
- If no return is submitted, the employer may be assessed on the basis of estimated earnings; and may receive a fine of up to 10% of the amount so assessed.
- Inaccurate information and discrepancies can trigger an assessment revision or even an audit, both of which are time-consuming and costly to resolve.
- The Compensation Fund has warned employers to expect an increase in employer engagements, site visits and audits.
How to maintain compliance
Understanding and adhering to the COIDA regulations is a fundamental employer responsibility we are able to assist you with, professionally and within the deadlines, ensuring your employees enjoy the cover provided by COIDA, while protecting your business from the risks of non-compliance.
We offer a wide range of specialist services, including outsourced payroll solutions. Should you need our advice or assistance, contact your contact Partner at MGI Bass Gordon. Send an email to info@bassgordon.co.za or call us on 021 405 8500.
Additional reading:
You can access a 95-page step-by-step Return of Earnings (ROE) User Manual under the User Menu on the Department of Labour’s Online Submissions (labour.gov.za) page.
The article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.
