Obtaining a Compensation Fund letter of good standing

Obtaining a Compensation Fund letter of good standing requires full COIDA registration, up-to-date return of earnings submissions and settlement of all assessment fees due.

A Letter of Good Standing records the issuing authority’s stated standing for its validity period. Check employer registration, submitted returns, assessed amounts, payment allocation and any audit query before requesting the letter. The Fund’s guidance says a LOGS is issued where fees due are paid and separately provides an instalment-plan route; obtain confirmation of the letter position for the actual account.

Contractor liability is governed by section 89 and its conditions. Compensation Fund guidance; section 89.

Assessment payment and letter validity

Target audience, jurisdiction and operational period

This practical guidance applies to small and medium enterprise (SME) employers, contractors, and financial managers operating within the Republic of South Africa under the jurisdiction of the Department of Employment and Labour and the Compensation Commissioner 2 6. Under COIDA (Act 130 of 1993, as amended), every entity employing one or more workers must maintain compliance with the Compensation Fund 2 7.

The statutory assessment cycle runs annually from 1 March of a given year to the final day of February of the following year 6 8. Completion of this task means that the employer has submitted the actual wage declaration for the preceding period, received the official Notice of Assessment/Invoice, paid the assessed amount within the mandatory 30-day window, and successfully generated or retrieved a current Letter of Good Standing 1 6 9 10 11.

Legislative framework, regulator guidance and advisory distinctions

To maintain operational compliance, SMEs must distinguish between legislative requirements, regulator procedural rules, and professional advisory recommendations:

— Practical point from this guide

1. Statutory Law (COIDA): Act 130 of 1993 establishes the legal obligation to register, keep wage records for at least five years, submit annual returns, and pay annual assessments levied by the Commissioner 8 12 13. The Compensation for Occupational Injuries and Diseases Amendment Act 10 of 2022 modernises these provisions, updating administrative penalties and compliance enforcement 14 15 16. Note that the 2022 Amendment Act takes effect on a date fixed by the President by proclamation in the Government Gazette 17.
2. Regulator Guidance: The Department of Employment and Labour issues official user guides and notices setting out operational workflows for the online Return of Earnings platform, payment allocation protocols, and manual submission procedures 5 18 19.
3. Evolv Recommendations: Evolv Accountants advises clients to reconcile payroll to SARS EMP501 returns before submitting ROEs, maintain a dedicated compliance audit file, and verify contractor LOGS prior to releasing project payments. Amended COIDA section 81; 2026 commencement dates.

Prepare the information and authority: assessment payment

Required documentation and system inputs

Before accessing the Compensation Fund online portal or initiating assessment payment, the responsible person must compile the following core records and access credentials 2 6 10 20:

• Contract Account Number: The employer’s unique Compensation Fund reference number starting with 99... 1 10.
• Portal Credentials: Active user registration details for the Department of Employment and Labour ROE website 2 21.
• Headcount and Wage Summaries: Total number of employees and total gross earnings (salaries and wages) paid during the assessment period (1 March to end of February) 6 10.
• Executive Earnings Details: Separate totals for directors' earnings and employee earnings as required by the ROE form 10.
• Proof of Payment & Bank Details: Proof of EFT or direct deposit payment using the deposit reference shown on the official assessment notice, including the correct CF account number 1 11.
• Authority Records: A signed Power of Attorney if an external consultant or accounting firm represents the employer 20.

Definition of earnings and record-keeping mandates

Earnings include all salaries and wages paid to employees up to the maximum annual threshold prescribed by the Minister by notice in the Gazette for the applicable assessment period 6 8. Employers are legally required under Section 81 of COIDA to retain all registers, payroll records, and financial statements for a minimum of five years following the date of the last entry 12 22.

The Compensation Fund possesses statutory authority to perform a full audit across the applicable audit period to confirm business classification, actual earnings declared, and contractor compliance 22. Amended COIDA section 81; 2026 commencement dates.

Complete the task step by step: letter validity

Sequenced portal submission and payment workflow

Obtaining a Letter of Good Standing follows a strict sequence from annual return filing to invoice settlement 2 10 11:

1. Access the ROE Online System: Log into the official Department of Employment and Labour portal (https://cfonline.labour.gov.za/OnlineSubmissions) using verified user credentials 2 21.
2. Select Employer Organisation: Select the applicable organisation linked to the profile using its Contract Account Number (99...) 23 24.
3. Capture Return of Earnings: Navigate to Submit Return of Earnings under the ROE menu 10 25. Enter the headcount, employee earnings, and directors' earnings for both the final assessment of the completed period and the provisional assessment for the upcoming period 10.
4. Verify and Confirm Figures: Review the captured totals on the summary screen 10. Confirm accuracy before clicking Yes to submit, as online self-correction is locked once figures are submitted 10 11.
5. Receive Notice of Assessment: Upon successful submission, the system displays the invoiced assessment amount, invoice number, due date, deposit reference number, and Compensation Fund banking details 11.
6. Effect Assessment Payment: Make payment via direct deposit or electronic funds transfer (EFT) within 30 calendar days of the assessment notice date 9 11. Use the exact Contract Account Number (99...) as the deposit reference to ensure automated payment matching 1 11.
7. Generate Letter of Good Standing: Once payment reflects and all historical assessments are cleared, request and retrieve the electronic Letter of Good Standing directly from the portal 1 2.

Check the result against the evidence: assessment payment

Independent completion verification

Submission of an ROE or initiation of a bank transfer does not equal acceptance or compliance 1 5. Independent completion evidence must be verified 1 2:

• Payment Allocation Check: Verify that the payment has cleared against the employer’s statement of account 1. Unallocated payments must be reported with Proof of Payment to Clarification@labour.gov.za 1.
• System Clearance Status: Ensure the account status shows as fully settled without an active audit block 5 11.
• Validated LOGS Output: Download the generated LOGS and perform an online validity check via the portal verification tool 2.

Task and completion checklist

Official guidance; Official guidance; Official COIDA provisions.

Reproducible hypothetical assessment example

Note: All values, figures, and rates below are illustrative examples to demonstrate the assessment calculation methodology.

• Entity: Model Manufacturing SME (Pty) Ltd.
• Assessment Period: 1 March to end of February.
• Declared Final Employee Earnings (Illustrative): R2,500,000 10.
• Declared Final Director Earnings (Illustrative): R250,000 10.
• Total Declared Final Earnings: R2,750,000 10.
• Assessed Tariff Rate (Illustrative Category Rate): 1.5% (R1.50 per R100 earnings) 13.
• Final Assessment Levied: R2,750,000 × 1.5% = R41,250 11 13.
• Provisional Assessment (Upcoming Year - Illustrative): R3,000,000 × 1.5% = R45,000 10.
• Illustrative gross total before credits: R41,250 +R45,000 =R86,250. Deduct the previous provisional assessment already charged or credited and include other adjustments to reconcile the actual invoice; do not pay both full assessments twice 9 11.

Penalty basis: Section83(6) provides for estimated assessments and penalties on the assessed amount or, in relevant circumstances, the assessment difference. Section87 deals separately with non-payment. Check the Fund’s notice and the applicable provision before calculating a penalty; overdue assessments can also attract statutory interest. Amended COIDA provisions.

Handle exceptions and unresolved cases: letter validity

Operational edge cases and audit blocks

When routine online processing fails, employers must handle specific exceptions in accordance with primary regulator instructions 1 5 20:

1. Employers Blocked for Audit: The system will prevent LOGS generation if an account is flagged for audit 5. The employer must submit a full supporting audit file to confirm assessment accuracy 5 20.
2. Unallocated Payments: Payments made with incorrect references fail to clear the account 1. Employers must email Proof of Payment alongside their Contract Account Number to Clarification@labour.gov.za 1.
3. Instalment Payment Plans: Employers unable to settle the full assessment in a single payment may request an official instalment arrangement and statement by emailing cfdebtors@labour.gov.za 1. A LOGS is generally issued only when fees are fully paid or an approved plan is maintained 1 9.
4. Errors on Submitted ROE Declarations: If an error is identified after online submission, online editing is locked 11. The employer must lodge a formal application for revision of assessment within 30 calendar days from the date of the Notice of Assessment/Invoice 22.
5. Business Status Changes & Manual Submissions: Entities that have closed, ceased trading, changed business nature, or entered liquidation/sequestration must not submit ROEs online 20. They must submit manual declarations 20.

Audit clearance documentation bundle

To clear an audit block, revise an assessment, or correct submitted earnings, the employer must submit 20:

• Sworn affidavit detailing the correct earnings figures and reasons for correction 20.
• Manually signed Return of Earnings (WAS.8) form 20 28.
• SARS EMP501 declaration and Tax Clearance Certificate 20.
• Detailed payroll summary reports for the audited years 20.
• Audited or independently reviewed Annual Financial Statements 20.
• Formal Power of Attorney if an external consultant acts on behalf of the business 20.

Next steps for COIDA and compensation

Reusable compliance action checklist

To ensure continuous compliance and seamless retrieval of a Letter of Good Standing, SMEs should implement this ongoing task list:

• [ ] Audit internal payroll records annually prior to the end of February 6.
• [ ] Submit Return of Earnings online immediately upon portal opening 2 5.
• [ ] Pay levied assessments within 30 days of invoice date using reference 99... 1 9 11.
• [ ] Download and archive the official Letter of Good Standing 1 2.
• [ ] Request and verify active Letters of Good Standing from all appointed sub-contractors before work commences 3 4.
• [ ] Retain all payroll, tax, and assessment records for a minimum of five years 12 22. Amended COIDA section 81; 2026 commencement dates.

Related guides

• Resolving an expired letter of good standing
• When an employer must register with the Compensation Fund
• Compliance and Regulations: Keeping Your Business on Track