Workman’s compensation audits: what employers need to know

If you’re an employer in South Africa, compliance with the Compensation for Occupational Injuries and Diseases Act (COIDA) is not optional, and that’s where Workman’s Compensation audits come in.

A Workman’s Compensation audit ensures that your business has correctly declared employee earnings and paid the appropriate annual assessment to the Compensation Fund. It protects both your employees and your business.

Each year, employers are required to submit a Return of Earnings (ROE) to the Compensation Fund. This declaration reflects the total earnings paid to employees during the assessment period.

An audit may be conducted to:

• Verify that earnings declared are accurate
• Confirm the correct industry classification has been applied
• Ensure assessments have been correctly calculated and paid
• Identify underpayments or overpayments

If discrepancies are found, employers may face additional assessments, penalties, and interest.

Non-compliance can result in:

• Penalties and interest on outstanding amounts
• Delays in receiving Letters of Good Standing
• Reputational risk
• Potential personal liability for directors in certain cases

A valid Letter of Good Standing is often required when tendering for contracts or working with larger corporates, making compliance critical for business continuity.

To ensure you’re audit-ready:

• Keep accurate payroll records
• Ensure employee earnings are correctly categorised
• Reconcile payroll totals to submitted ROEs
• Retain supporting documentation

Regular reviews and proactive compliance reduce the risk of unexpected liabilities.

At PRNC, we assist businesses with Workman’s Compensation registrations, ROE submissions, audit support, and resolving discrepancies with the Compensation Fund.

If you’d like peace of mind knowing your COIDA compliance is in order, contact PRNC today, we’re here to keep your business protected and compliant.