If your business employs even one person in South Africa, you are almost certainly obligated under the Compensation for Occupational Injuries and Diseases Act (COIDA) to register with the Compensation Fund and submit an annual Return of Earnings (ROE). Most business owners know about PAYE and UIF. Far fewer understand COIDA — and that gap is expensive.
This guide explains exactly what COIDA requires, how the ROE is calculated, where to submit it, and what the Compensation Fund does with your money.
What is COIDA?
COIDA (Act 130 of 1993) is South Africa's occupational injury insurance system. It replaced the old Workmen's Compensation Act and is administered by the Compensation Fund, a division of the Department of Employment and Labour.
The purpose of COIDA is to compensate employees — and their dependants — for injuries, diseases, or death arising from their work. In exchange, employers who comply with COIDA are protected from civil liability claims by injured employees. COIDA effectively operates as a compulsory no-fault insurance scheme for workplace injuries.
Who Must Register?
Nearly every employer in South Africa must register with the Compensation Fund. The only exclusions under COIDA are:
- –**Domestic workers** employed in a private household (they are covered by a separate compensation fund)
- –**Employers in mining and mining-related activities** (covered under the ODMWA — Occupational Diseases in Mines and Works Act)
- –**Members of the South African National Defence Force and South African Police Service**
If you employ anyone — full-time, part-time, casual, or on a fixed-term contract — in a non-domestic, non-mining capacity, you must be registered. Independent contractors who supply their own labour also fall under COIDA in many circumstances.
What is the Return of Earnings (ROE)?
The Return of Earnings (CF-2) is an annual declaration submitted to the Compensation Fund. You declare your employees' total earnings for the preceding calendar year (1 January to 31 December), and the Compensation Fund uses this to calculate your annual assessment — the premium you owe.
Think of the ROE the same way you think of the EMP501 payroll reconciliation for SARS, or the VAT201 for SARS. It is a statutory return that triggers a financial obligation. The difference is that this one goes to the Compensation Fund, not SARS.
The ROE is due by 31 March every year for the prior calendar year's earnings. The 2025 ROE (covering earnings from 1 January 2025 to 31 December 2025) was due by 31 March 2026. If you have not yet filed, you are already late and penalties are accruing.
How the Assessment is Calculated
Your annual Compensation Fund assessment is calculated as follows:
**Assessment = Total Declared Earnings × Assessment Rate**
The assessment rate is expressed as a percentage and varies by industry. It is determined by your class and subclass — a risk classification system the Compensation Fund assigns based on the nature of your business. A construction company pays a higher rate than an accounting firm because the risk of occupational injury differs significantly.
You can check your assigned class on your compensation fund registration certificate or by contacting the fund directly. Assessment rates are published annually in the Government Gazette.
Earnings caps: The Compensation Fund imposes a maximum annual earnings ceiling per employee for ROE purposes. You declare actual earnings up to this ceiling. Earnings above the ceiling are excluded from your assessment calculation. As of recent assessments, this ceiling is updated annually.
What Counts as "Earnings" for ROE Purposes?
For COIDA ROE purposes, "earnings" broadly includes all remuneration paid to employees. This includes:
- –Basic salary or wages
- –Overtime pay
- –Bonuses and commissions
- –Allowances (housing, travel, subsistence — included if they are regular)
- –Leave pay
- –Employer contributions to medical aid and pension are **excluded** from earnings for COIDA purposes
Casual and part-time employee earnings must also be included. If you employ seasonal workers, their earnings for the months they worked must be declared.
How to Submit the ROE
The Compensation Fund has moved submissions to its online portal at [www.labour.gov.za](https://www.labour.gov.za) via the Return of Earnings (ROE) Filing System. The process:
1. Log in with your employer registration number and password 2. Complete the CF-2 form — entering earnings per employee category or in aggregate by class 3. The system calculates your assessment automatically 4. Receive your assessment notice 5. Pay the assessed amount by EFT to the Compensation Fund's bank account
If you are a first-time filer or have lost your login credentials, call the Compensation Fund's helpline at 0860 105 350 or email cfonline@labour.gov.za to recover access.
Penalties for Late or Non-Filing
The Compensation Fund takes non-compliance seriously. Consequences include:
- –**10% penalty** on the assessed amount for late filing
- –**Interest** on any outstanding balance
- –**Estimated assessments**: if you do not file, the Fund estimates your earnings based on prior years or industry averages and issues an assessment — often higher than your actual earnings
- –**Civil enforcement**: the Fund can attach assets and institute legal proceedings to recover outstanding assessments
- –**Good Standing Certificate blocked**: you cannot obtain a valid Letter of Good Standing (required for many tenders and contracts) while you have outstanding returns or unpaid assessments
The Letter of Good Standing
The Letter of Good Standing is issued by the Compensation Fund to confirm that your employer account is up to date. It is required by law when:
- –You are awarded a government tender or contract
- –You subcontract to other parties who need to verify your compliance
- –You have employees working on-site at a client's premises
- –You are applying for a business permit or licence in regulated industries
The letter expires annually and must be renewed. Renewal is automatic if your ROE is filed and your assessment is paid. If you need one urgently, ensure your ROE and payment are up to date — the Fund typically issues a new letter within 3–5 business days.
COIDA vs. UIF: What's the Difference?
Many employers confuse COIDA with UIF. They are separate systems:
| | UIF | COIDA / Compensation Fund | |---|---|---| | Purpose | Unemployment, illness, maternity relief | Workplace injury and disease compensation | | Who pays | Employer + Employee (1% each) | Employer only | | Submitted via | SARS eFiling (EMP201) | Compensation Fund portal | | Timing | Monthly | Annual ROE by 31 March | | Rate | Fixed 2% (1%+1%) | Variable by industry class |
Both are compulsory. Both are separate registrations. Paying UIF through SARS does not substitute for COIDA registration and the ROE.
For a full explanation of UIF and how it works alongside PAYE, read our guide: [PAYE, UIF, and SDL Explained](/resources/paye-uif-sdl-explained).
How Sikatrix Helps
At Sikatrix Business Accountants, we handle the full COIDA compliance cycle for our clients:
- –Initial Compensation Fund registration
- –Annual ROE preparation and submission
- –Assessment review and dispute assistance if the Fund issues an estimated assessment
- –Letter of Good Standing retrieval
- –Integration with your monthly [payroll management](/services/payroll) so earnings records are always submission-ready
Most of our clients in Alberton, Johannesburg, Germiston, and across Gauteng come to us after receiving an unexpected estimated assessment from the Compensation Fund — usually because their previous bookkeeper didn't file the ROE. Fixing retroactive assessments is possible, but it is far simpler to file correctly from the start.
[Book a free consultation](/contact) to get your COIDA compliance in order before the penalties compound further.
Key Dates to Remember
| Event | Deadline | |---|---| | ROE filing (prior calendar year earnings) | 31 March annually | | Assessment payment | Within 30 days of assessment notice | | Letter of Good Standing renewal | Annual (triggered by ROE + payment) |
References & Further Reading
- –[Department of Employment and Labour — Compensation Fund](https://www.labour.gov.za/DocumentCenter/Pages/Compensation-Fund.aspx) — Official COIDA legislation, ROE filing portal, and Letter of Good Standing
- –[Compensation Fund ROE Online Filing System](https://www.labour.gov.za) — Submit your annual Return of Earnings here
- –[COIDA Act 130 of 1993](https://www.gov.za/documents/compensation-occupational-injuries-and-diseases-act) — Full legislative text
- –[Department of Employment and Labour: UIF](https://www.labour.gov.za/DocumentCenter/Pages/uif.aspx) — UIF registration, contributions, and claims (separate from COIDA)
*This article is for general information purposes. Assessment rates and earnings ceilings are updated annually by the Compensation Fund. [Contact us](/contact) to ensure your ROE is correctly calculated and submitted.*
