MIBCO Levy 2025 Update: New R3.14 Weekly Payment Rules

Are You Ready for the New MIBCO Levy Requirements?

Starting 3 February 2025, every employer and employee in South Africa’s motor industry must pay the new MIBCO Council Levy of R3.14 per week. No exceptions.

This isn’t just another policy update. It’s a non-negotiable compliance requirement, and failing to meet it can cost you. Here’s everything you need to know to avoid penalties, update your payroll, and stay ahead.

What’s New?

Let’s break it down:

1. The New Levy:

   Every employer and employee must pay a weekly levy of R3.14, effective 3 February 2025.

2. No Earnings Threshold Exemptions:

   It doesn’t matter if employees earn below or above the annual threshold—everyone contributes.

3. Apprentices and Learners Are Exempt:

   Only employees enrolled in accredited Motor Industry Trade-related programs are off the hook.

What Does This Mean for You?

Whether you’re an employer managing payroll or an employee seeing deductions, this affects you.

For Employers

1. You Must Update Payroll Systems:

   By 3 February 2025, your payroll must deduct R3.14 per employee per week.

2. You’re Responsible for Compliance:

   Any delay or mistakes could lead to penalties and legal action.

3. You Need to Communicate Clearly:

   Employees will notice this deduction. You need to explain the “what” and “why” upfront to avoid confusion.

For Employees

1. Expect Weekly Deductions:

   R3.14 may seem small, but it’s important to know why it’s there and what it funds.

2. No Opt-Outs:

   Unlike other contributions, this levy applies to everyone—no earnings exemptions.

Why Does This Matter?

Non-compliance isn’t an option. Here’s why this levy is a big deal:

• Protect Yourself from Penalties: MIBCO regulations are enforceable by law. Non-compliance comes with heavy consequences.

• Streamline Payroll Processes: An accurate, compliant payroll saves time and avoids disputes.

• Contribute to Industry Standards: The levy supports the working functions of MIBCO, which benefit everyone in the motor industry.

What Happens If You’re Not Ready?

Non-compliance means trouble. From fines to brand image damage, failing to meet this deadline isn’t worth the risk.

Take These Steps to Stay Compliant:

1. Update Payroll Immediately: Adjust systems to account for the R3.14 levy.

2. Notify Employees: Send a clear, concise notice explaining the changes.

3. Verify Exemptions: Confirm which employees (e.g., apprentices) qualify for exemption.

4. File Accurate Returns: Ensure your MIBCO returns reflect the updated levy.

5. Consult a Compliance Specialist: If you’re unsure, get help before it’s too late.

Common Questions—Answered

1. Why is this levy compulsory for everyone?

   • The levy ensures consistent funding for MIBCO’s administrative functions, which serve the entire motor industry. Making it mandatory creates fairness across the board.

   • All employees must be included on MIBCO returns. Regardless of their position, working hours, or whether they earn above the annual threshold. Every employee must be added to the MIBCO returns statement.

2. How does this affect casual or part-time workers?

   • Part-time workers are not exempt from MIBCO compliance. However, there are important exceptions:

     • No Council Levies for Employees Working Less Than 23 Hours Weekly:
       Employees who work fewer than 23 hours a week are not subject to the R3.14 weekly levy.

     • Clause 13 of the Administrative Agreement - Returns Clause:
       Employers must submit accurate returns. Do not deduct for employees working less than 23 hours a week.

3. What if I miss the 3 February deadline?

   • You risk penalties, compliance audits, and disruptions to your business. Act now to avoid unnecessary costs.

4. How do I communicate this to employees?

   • Be clear and proactive. “Starting February 3rd, your payslip will show a weekly R3.14 deduction for the MIBCO Council Levy." Include why it’s happening and who’s exempt.

What This Means for Your Business

For an employer with 20 employees:

• Weekly Deduction Total: R62.80

• Monthly Deduction Total: R251.20

• Annual Contribution Total: R3,265.60

Multiply that across South Africa’s motor industry, and this levy powers the operations that keep MIBCO running.

Your Next Steps

Here’s how to stay ahead:

1. Get Your Payroll Ready: Don’t wait until the last minute. Update your systems to deduct R3.14 per employee each week.

2. Communicate the Change: Send out a clear notice to employees today. Transparency builds trust.

3. Consult Experts: If you’re unsure about compliance, consult specialists like Three One Solutions for guidance.

Why Three One Solutions?

Navigating compliance changes can be overwhelming, but you don’t have to do it alone.

At Three One Solutions, we help motor industry businesses stay MIBCO-compliant. From payroll updates to filing accurate returns, we’re here to make compliance simple, fast, and stress-free.

Let us take the guesswork out of compliance so you can focus on running your business.

The Bottom Line

The new MIBCO levy is not optional. At R3.14 per week, it’s a small cost with a big impact on compliance and industry standards.

Failing to act puts your business at risk. But with the right preparation and support, you can easily stay compliant and avoid penalties.

Don’t wait. Update your payroll, notify your employees, and get the help you need before 3 February 2025.

Have questions? Need assistance? Contact Three One Solutions today.

Stay informed. Stay compliant. Stay ahead.