The Return of Earnings deadline for COIDA closes next Tuesday. You're required to submit actual employee earnings for the past year, plus a solid estimate for the year ahead, and getting either number wrong costs you either way.
The easiest mistake is taking last year's figure, adding an arbitrary percentage, and submitting. Guess high and you overpay your assessment, tying up cash that should be funding operations. Guess low and the Compensation Fund catches it on reconciliation, triggering reassessment fees, penalties, and potentially a frozen Letter of Good Standing, the document that keeps you eligible to tender for contracts.
Neither direction is free. The fix is treating both halves of the submission as a proper calculation rather than a rounding exercise.
The first half of the ROE is straightforward if your systems are good: actual earnings from 1 March to the end of February, including regular salaries, overtime, bonuses and the cash value of fringe benefits. If you're on Xero or Sage, this data should reconcile directly with your annual financial statements. If it doesn't, that mismatch is the first thing worth investigating before you submit anything.
The second half, your estimate for the next 12 months, is where the real thinking happens. It should come from your actual growth plans, not a guess: planned hires, expected annual increases, anticipated bonuses. If you're budgeting for R5 million in additional turnover, work out what additional headcount that realistically requires and estimate from there.
Your COIDA assessment is a real cost of doing business, calculated against your industry risk class and total declared payroll. If this year's estimate pushes the number higher, that increase needs to be reflected somewhere in your pricing or retainer structure, not silently absorbed into a shrinking margin.
Pull your actual payroll data now. Reconcile it against your annual financial statements before you submit anything.
Build the forecast from real plans. Base your 12-month estimate on actual hiring and increase decisions, not last year's number plus inflation.
Check your fringe benefit classifications. Misclassified allowances inflate your declared earnings and your assessment.
Price the increase in. If your assessment is rising, adjust your rates or retainers to absorb it rather than eating the difference.
Late submission attracts administrative penalties and interest, and your Letter of Good Standing stays frozen until the assessment is finalised and paid.
If you're registered with the Compensation Fund, yes, but working directors are classified as employees under COIDA and their earnings must still be declared.
It's based on your total declared payroll and your industry's risk classification, so accurate payroll data directly determines what you pay.
One week is enough time to get this right if you start today. Pull the actuals, build a real forecast, and submit before Tuesday closes the window. For related compliance guidance, see our blog, and confirm current requirements.
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