Compliance & Governance

Built for scrutiny.
Designed to withstand it.

Full legal and structural architecture for trade unions, SARS auditors, B-BBEE Verification Agencies, payroll providers, and legal advisers. No marketing language. Precise legal framing.

Code 3601 — ex gratia gross remuneration.

Programme periodContinuously available — fixed 3-month term from the employer's own start date (extendable at the employer's written election under PP&MA Schedule 1).
Payment tiersBand A: R600/month (NMW–R14,180.80/mth) · Band B: R575/month (R14,180.80–R22,466.74/mth) · Band C: R550/month (R22,466.74–R30,752.69/mth). Salary Band placement only — per CDII Disbursement Notice, employer has no discretion.
SARS Income CodeCode 3601 — Ex Gratia Gross Remuneration. Codes 3702 and 3703 are not applicable — this is not reimbursive business travel under s8(1) of the Income Tax Act 58 of 1962, and eligibility does not depend on commute distance or mode of travel.
PAYEAPPLIES. Withheld at employee's applicable marginal rate. Nil PAYE for employees earning below R99,000 per annum (paragraph 11(3) of the Fourth Schedule).
UIFDOES NOT APPLY. The Social Ex Gratia Payment is not "remuneration in respect of services rendered" under the Unemployment Insurance Contributions Act 4 of 2002.
SDLDOES NOT APPLY. Ex gratia welfare payments fall outside the Fourth Schedule remuneration definition for SDL base purposes under the Skills Development Levies Act 9 of 1999.
COIDADOES NOT APPLY. The Minister's Notice (April 2025) expressly excludes ex gratia payments — "voluntary payments to employees without legal obligation" — from the Return of Earnings calculation.
Benefit fundsDOES NOT APPLY. Social Ex Gratia Payment does not constitute pensionable pay or trigger any benefit fund contribution. Payroll systems must be configured to exclude Code 3601 from all benefit fund calculation bases.
IRP5Code 3601 must appear on each Beneficiary's IRP5 at year-end.
EMP201Code 3601 amounts appear in monthly EMP201 (PAYE only — no UIF or SDL amounts).

Participation for your own employees — s11(a) Staff Welfare Expenditure

A participation contribution, which funds Social Ex Gratia Payments to the Participating Employer's own Qualifying Employees, is generally deductible as staff welfare expenditure under section 11(a) of the Income Tax Act 58 of 1962, subject to the requirements of that section (incurred in carrying on the employer's trade, in the production of income, and not of a capital nature). Because it benefits the employer's own employees, it is not a donation for section 18A purposes and does not qualify as a B-BBEE Socio-Economic Development contribution.

Unrestricted pooled contributions — s18A or B-BBEE SED

An unrestricted contribution — not directed to the contributor's own employees, with CDII alone selecting the beneficiaries under its independent programme criteria — may qualify either as a donation under section 18A of the Income Tax Act (CDII then issues a Section 18A Certificate; the deduction is limited to 10% of taxable income and requires a bona fide donation with no benefit to the donor), or as a B-BBEE Socio-Economic Development contribution under Statement 500 or 605 (at least 75% of its value benefiting black people).

Never both. The same Rand can never be claimed under both section 18A and B-BBEE SED. Each route has its own eligibility criteria, and neither CDII nor the programme documents guarantee any tax or B-BBEE outcome. Each contributor must confirm its treatment with its own tax adviser, B-BBEE Verification Agency and legal adviser.

Non-contractual. Non-recurring. Extendable at discretion.

The Social Ex Gratia Payment is non-contractual, non-recurring, and ex gratia. It does not form part of remuneration under section 213 of the Labour Relations Act 66 of 1995 or section 35 of the Basic Conditions of Employment Act 75 of 1997.

The programme runs for a fixed 3-month term from the employer's own start date and does not renew automatically — any extension requires a fresh, documented decision by the employer under PP&MA clause 4.4. Because continuation is never implied and must be actively re-elected each time, this addresses the risk of the payment being treated as a benefit giving rise to a legitimate expectation of continuation under section 186(2)(a) of the LRA — the unfair labour practice provision covering the provision of benefits (see Apollo Tyres South Africa (Pty) Ltd v CCMA, confirming that discretionary advantages under a policy or practice can constitute "benefits" for this purpose). All participants acknowledge the non-contractual character in the Employee Acceptance Form (CRP/EAF/2026/001 v6.6) before their first payment.

Four architectural elements that make this programme defensible.

Fund Structure
SmartCommute™ Commuter Resilience Fund
For Track 1 (employer payroll): CDII authorises disbursements via Disbursement Notice; the employer pays employees directly through its own payroll system. CDII's administration fee (7.5%) is paid to the Fund separately. For Track 2 (CDII direct): contributions are pooled in a dedicated CDII bank account and disbursed to non-employee participants directly by CDII. In both tracks, CDII retains independent control over eligibility, amounts, and certification.
This architecture preserves CDII's independence as Programme Principal.
Legal
Programme Participation & Master Agreement
CDII as independent Programme Principal. Employer as Participating Employer (Disbursement Agent only). CDII determines all eligibility, payment amounts, and certification. Employer has no discretion to vary or withhold disbursements.
Track 2
Two-Track Eligibility Model
Track 2 (CDII direct to non-employee participants) broadens the Fund's beneficiary base beyond any single employer's workforce — strengthening the Fund's independent character.
Language
Language Discipline
No "allowance", "benefit", "grant", or "tax-free payment" language anywhere in the document suite. "Social Ex Gratia Payment" throughout. Bank reference, payslip description, and all employee communications use the approved terminology.
Governance
Board Resolution Template
7 substantive resolutions — programme approval, tax treatment, payroll configuration, UIF/SDL/COIDA exclusion confirmation, non-contractual acknowledgement, IRP3(c) obligation, and Track 2 authorisation. CDII provides the template — Board-ready to adopt at a single meeting.

One trigger only. No others.

Fixed 3-month term
The programme runs for a fixed 3-month term from the employer's own start date, ending automatically unless extended. Extension is possible at the employer's written election under PP&MA Schedule 1 — a fresh, documented decision is required for each extension; continuation is never automatic or implied. This natural end of term is not itself a sunset trigger.
The only trigger — CDII determination of material change
The programme terminates on written notice from CDII, acting as Programme Administrator, following its determination — based on evidence presented to it — of a material macroeconomic development or a material company-specific event substantiating that circumstances have materially changed. There is no other trigger.
No petrol price trigger. The programme does not contain a petrol price sunset trigger.

Registered Responsible Party. Minimum data. Documented purpose.

CDII is a registered Responsible Party under the Protection of Personal Information Act 4 of 2013 (Information Regulator Registration No. 2025-008244). Employer participant lists submitted to CDII use employee reference numbers only — no names, identity numbers, or banking details. All personal information is processed solely for programme administration purposes.

Questions from your legal team, auditors, or B-BBEE VA?

Contact Adv. Don Leffler directly for the full compliance documentation — including the PP&MA v1.1, the Board Resolution Template and, where relevant, the B-BBEE Verification Agency Documentation Pack — sent privately by CDII on request.

Contact Programme Director →