South African farmers are being urged to declare their annual wages from 1 March 2022 to 28 February 2023 electronically to avoid penalties of up to 10% for late submissions. This applies to all labourers and working directors in the farming industry and includes the estimated wages paid from 1 March 2023 to 28 February 2024.
According to Stephan Pietersen, founder of Work Accident Support, failure to declare wages electronically will lead to penalties, and the farming industry is not exempt. “The farming industry has been subdivided into four sub-classes, and each sub-class is subject to a rate, which is declared together with the Compensation Fund to issue an invoice,” said Pietersen.
Sub-classes explained
The sub-classes are cattle farming, tillage and forestry, mixed farming, and sugar and tea farming. These rates were revised in 2020 and will be phased in over a period of five years from 2021 to 2025. Rates for 2022 and 2023 for each sub-class has been provided by Pietersen.
“Cattle farming is subject to a rate of 2.27 in 2022 and 2.39 in 2023, while tillage and forestry are subject to a rate of 2.25 in 2022 and 2.36 in 2023. Mixed farming is subject to a rate of 2.38 in 2022 and 2.09 in 2023, and sugar and tea farming are subject to a rate of 1.17 in 2022 and 0.96 in 2023,” Pietersen explained.
The Compensation Fund has the authority to audit an account if there is a difference of more than 50% in wages declared compared to the previous year. Businesses that fail to pay their accounts before the expiry date will incur a penalty of 10%, as well as monthly interest against a rate as determined by the National Treasury.
Pietersen advised farmers to keep records of the completed form to declare the wages, the issued invoice and proof of payment, as well as the letter of good standing issued, as inspectors from the department of employment and labour could ask for it.
Farmers need to be vigilant
During 2020, businesses paid the Compensation Fund R9.5 billion. In 2022, inspectors from the department of employment and labour also collected an additional R74 million, including penalties from businesses that were behind with their Compensation for Occupational Injuries and Disease Act (Coida) payments.
Of the more than 950 000 businesses that are registered with the Compensation Fund, 25 000 producers do not submit their annual wage declarations. This has financial and legal implications, as a farm not having any labourers must apply for deregistration from when the last worker left the employ to prevent any invoices from being issued.
Pietersen stressed that producers need to be vigilant when declaring wages, as earnings include overtime of a regular nature, bonuses of any kind, commission, the cash value of food and accommodation provided to workers as part of a compensation package, the cash value of benefits such as a company car, free or reduced-rate accommodation, etc.
Don’t forget to include allowances, cash
“Travel and other allowances are paid regularly as part of the package, and any other compensation in cash or in kind to an employee by virtue of his/her employment contract,” said Pietersen.
Wages from 1 March 2022 to 1 February 2023 need to be declared up to a maximum of R529 264, while wages from 1 March 2023 to 28 February 2024 need to be declared up to a maximum of R563 520. If a mistake was made when declaring wages, farmers have 60 days to apply to the Compensation Fund to review the account.
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