How to set up tax (PAYE) and UIF for your Au Pair through SARS
Alright! So finally the answer to the question that so many families who have au pairs want to know: Should I deduct tax from my au pair’s salary, and how does it work?
And the answer is…
If your au pair earns more than R6250 per month – YES
NB: You will need to pay UIF for your au pair even if she earns less than R6250 and is not paying PAYE.
I especially went to SARS to consult someone and find out exactly how it works, so allow me save you some effort and tell you exactly what you need to do. 🙂
Unemployment Insurance Fund (UIF)
Important to know, first of all, is that your au pair should be registered to pay UIF even if they are earning below the R6250 threshold that would require them to pay PAYE. Each and every employer should register their au pair to pay UIF and deduct and pay it from their salary on a monthly basis. If you are unsure what UIF is and the benefits thereof, click here to find out more about it. Basically, it requires you to deduct 1% of your employee’s salary from their total income, as well as paying another 1% from the employer’s pocket, which, in the end, means that you are paying 2% of the au pair’s salary towards the UIF.
To register your au pair for UIF, follow these steps:
STEP 1: Get information like the ID number and address of your au pair ready before registering.
STEP 2: Download the UI-8D application form (Application for Registration as an Employer of Domestic Employees) and complete this document.
STEP 3: Download the UI-19 form (Employers Declaration of Employees) and complete this document.
STEP 4: Email both these documents to email@example.com.
STEP 5: When you have received confirmation of your registration with the UIF, you can then register for uFiling (in the case where the employee will not be paying PAYE also) or use your UIF reference number to pay UIF through SARS together with PAYE (explained in the PAYE section below). You will need the following to register for uFiling:
– Your valid UIF reference number as supplied by the UIF when you registered
– Your valid 13 Digit South African ID number or a valid Passport number
– Your e-mail address where all correspondence will be emailed
– Your banking account details and valid branch code that you will nominate to be used to securely pay your UIF contributions
From here on it should be smooth sailing and you can just follow the instructions as directed online 🙂
Pay-as-you-earn (PAYE) – otherwise known as Employee’s Tax
If your au pair earns more than R6250 per month, you are legally obliged to deduct tax from her salary and pay it over to SARS. According to law, an employer must register with the South African Revenue Service (SARS) within 21 business days after becoming an employer. If your au pair is not yet registered with SARS (i.e. she does not have a tax number), the she will need to go to a SARS office and register as a taxpayer to get a tax number. Once you have a tax number for your au pair, you can proceed with the steps as listed below.
STEP 1: Register as an employer with SARS by completing the EMP101e application – download it here or request it from the SARS office. (Tip: Make sure you complete this form correctly to prevent delays. Use the Guide for Completion of Employer Registration). If you have SARS e-Filing, I have been told you may be able to complete this application on your e-filing, but you will still need to go in to SARS for step 2.
STEP 2: You will need to take this form to a SARS office to hand it in, together with the following:
– A certified copy of your ID
– Proof of bank account with bank letterhead
– Recent copy of municipal statement in your name or your spouse’s name
– Agreement of lease if you are renting (only if you are renting, otherwise not applicable)
STEP 3: Once you are registered as an employer, you should make use of e-Filing to complete an EMP201 form on a monthly basis (see sample here). You will need to enter your au pair’s salary in the form and SARS will calculate the PAYE and UIF for you. From there on, you can just follow the instructions to make payment to SARS. If you are not yet registered for e-Filing, you should register now.
Best of luck in completing this process! If you need any further assistance, you can contact our agency and we will assist you as far as we can.
Other helpful links:
Need an au pair? We can help! Click here for more information or here to register to find an au pair now.
What is an au pair? Find out here.
How to keep a happy and healthy relationship with your au pair – find out here.
How to interview your au pair – find out here.