What is Code 4116 on a South African Payslip?
COIDA and Workmen's Compensation explained — why code 4116 appears on your IRP5, that it is an employer-only cost, how the Compensation Fund works, and when benefits are tax-free.
4116Code 4116 is a COIDA (Compensation for Occupational Injuries and Diseases Act) contribution — the annual Workmen's Compensation Fund assessment paid by your employer. Employees do not contribute to this. It appears on your IRP5 for transparency and reporting purposes only. If you are injured at work and receive compensation from the Fund, those benefits are generally not taxable income.
What Code 4116 Means
Code 4116 records the employer's contribution to the Compensation Fund under COIDA — the Compensation for Occupational Injuries and Diseases Act. COIDA is South Africa's statutory no-fault compensation scheme for workplace injuries and occupational diseases. All employers (with limited exceptions such as domestic employers under a certain threshold) must register with the Compensation Fund, submit annual returns, and pay an annual assessment.
The assessment is calculated based on the employer's total annual payroll multiplied by an industry-specific tariff rate. Industries with higher injury risks pay higher tariff rates. The Compensation Fund uses these contributions to pay compensation to injured workers — for medical treatment, temporary disability income replacement, permanent disability awards, and death benefits to dependants.
Critically, code 4116 is an employer-only cost. Employees make no contribution to COIDA. The amount appearing on your IRP5 under code 4116 is what your employer paid — it has no effect on your salary, your take-home pay, or your annual tax position. It appears for completeness and regulatory reporting only.
How COIDA Differs from UIF
| Feature | COIDA (Code 4116) | UIF (Code 4101) |
|---|---|---|
| Who contributes | Employer only | Both employer and employee (1% each) |
| Employee cost | None | 1% of remuneration (capped) |
| What it covers | Workplace injuries and occupational diseases | Unemployment, illness, maternity, adoption, parental leave |
| Benefits taxable? | No — exempt under s10(1)(q) | Yes — UIF benefits are taxable income |
| Administered by | Compensation Fund (Dept of Employment & Labour) | UIF (Dept of Employment & Labour) |
From 1 April 2023, domestic workers are also covered under COIDA. Employers of domestic workers are required to register with the Compensation Fund and pay assessments on domestic worker wages. If you employ a domestic worker and have not registered, you are non-compliant and may be liable for compensation costs out of pocket if your worker is injured on duty. Registration is done through the Department of Employment and Labour.
Frequently Asked Questions
What does code 4116 mean on my payslip?
Code 4116 is the employer's contribution to the Compensation Fund under the Compensation for Occupational Injuries and Diseases Act (COIDA). This is an employer-only cost — employees do not make any contribution. It appears on your IRP5 for transparency and reporting purposes, but it does not reduce your take-home pay and does not affect your taxable income. Your employer pays an annual assessment to the Compensation Fund based on your industry risk rating and the employer's total wage bill.
Do employees pay COIDA contributions?
No — COIDA contributions are entirely the employer's responsibility. Unlike UIF (where both employer and employee contribute 1% each) or medical aid (where both parties often contribute), COIDA is funded solely by employers. The annual assessment is calculated on the employer's total payroll, multiplied by an industry-specific tariff rate set by the Compensation Fund. Employees pay nothing and the code 4116 amount on their IRP5 does not reduce their salary or increase their tax.
What does COIDA actually cover?
COIDA provides compensation to employees who are injured at work or who contract an occupational disease in the course of employment. The Compensation Fund (administered by the Department of Employment and Labour) pays for medical treatment, temporary disability income replacement, permanent disability lump sums or pensions, and death benefits to dependants. All South African employers (with limited exceptions) must register with and contribute to the Compensation Fund.
Are COIDA compensation benefits taxable?
No — compensation paid to an employee (or their dependants) by the Compensation Fund under COIDA is specifically exempt from income tax under Section 10(1)(q) of the Income Tax Act. Whether it is a lump sum for permanent disability, a periodic income benefit during recovery, or a death benefit to dependants — payments from the Compensation Fund are tax-free. This is consistent with other no-fault compensation schemes.
Why does code 4116 appear on my IRP5 if I don't pay it?
Code 4116 appears on employee IRP5 certificates for record-keeping and transparency purposes. SARS requires employers to report COIDA contributions alongside other employment-related amounts. Seeing it on your IRP5 does not mean you are being charged — it reflects what your employer paid to the Compensation Fund on account of your employment. The amount has no effect on your taxable income, your PAYE, or your annual tax assessment.
What should I do if I am injured at work?
Report the injury to your employer immediately. Your employer is legally required to report all workplace injuries to the Compensation Fund within certain timeframes (7 days for minor injuries, immediately for serious injuries or fatalities). The employer submits a claim to the Fund, which assesses and pays compensation directly. You should not need to pay for medical treatment related to a workplace injury covered by COIDA — the Fund covers reasonable medical costs. Contact the Department of Employment and Labour if your employer fails to report or cooperates poorly with a claim.