How to get a letter of good standing

What the letter actually is

Every employer in South Africa must register with the Compensation Fund under the Compensation for Occupational Injuries and Diseases Act, COIDA, from the first employee. The Fund covers your workers if they are injured at work and, in exchange, section 35 stops them suing you for it. A letter of good standing is the Fund saying, on paper, that you are holding up your end: registered, returns filed, assessment paid. It names the employer, carries a reference number and an expiry date, and is what a client, a main contractor or a tender committee asks to see before you are allowed on site.

It is sometimes called a COIDA certificate, a workmen’s compensation letter or a Compensation Fund letter. Same document.

Why your client insists on it

Section 89 of the Act makes an employer who gives work to a contractor responsible for obtaining that contractor’s letter of good standing. If the main contractor does not, the assessment for your employees becomes theirs to pay, and an injury to one of your people on their site becomes their problem. So the gate guard asking for your letter is not being difficult. They are protecting their employer from carrying your liability. That is also why a lapsed letter costs you work the same week, not eventually.

The four conditions, all at once

• Registered with the FundSection 80. You have a Compensation Fund registration number. If you never registered, nothing else on this page applies yet.
• Return of earnings filedSection 82. The annual return (the CF-2A, still called the W.As.8 in most gazettes) declaring last year’s actual earnings and next year’s estimate. One missing year, however old, stops the letter.
• Assessment paid, or being paidSection 86. The Fund raises an assessment on your return. It must be paid, or an instalment arrangement must be approved. Owing money does not automatically mean no letter.
• Accidents reported on timeThe one almost nobody knows about. An injury on duty that was never reported can sit between you and your letter even when the money is settled.

How to get one, step by step

1. Register as an employer with the Compensation Fund. Free, online, and required within seven days of hiring your first employee. You need your company or close corporation registration number (or your ID if you trade in your own name), your SARS income tax number, a clear description of what the business does, your headcount, your payroll figures and banking details. The description decides your industry class and therefore your tariff, so be precise. The COIDA guide walks through it.
2. File the return of earnings. Every year, in the season the Fund announces (1 April to 30 June in the most recent season), log in to ROE Online at cfonline.labour.gov.za and declare actual earnings for the year just ended and estimated earnings for the year ahead. Each employee counts only up to the earnings ceiling, R668 000 for 2026/27. Directors and members who draw a salary are declared in their own section. The return of earnings season page has the form and the traps.
3. Pay the assessment. The Fund issues a notice of assessment: assessable earnings times your industry tariff, with a minimum of R1 621 for 2026/27 (R560 for domestic employers). Pay it within 30 days of the invoice. After that interest runs, and a return filed after the season closes carries a penalty of up to 10 percent.
4. Request the letter. Once the return is in and the payment reflects, request the letter of good standing on ROE Online. For an employer who is up to date it is usually issued within days. Download it, check the employer name, reference number and expiry date, and send it to whoever asked.
5. Diarise the renewal. The letter lapses when the next return of earnings falls due. Treat it as an annual job that happens every April, not a document you fetch once.

What it costs

The letter is free. What costs money is the assessment behind it, which is your premium for the cover. For 2026/27 the minimum is R1 621 a year for a commercial employer and R560 for a domestic employer; above the minimum it is your assessable payroll divided by one hundred, multiplied by the tariff for your industry subclass. Office based work sits near the bottom of the scale and construction, mining and transport sit several times higher. Estimate yours with the free assessment calculator.

If you would rather not do it yourself, the service fee depends on where you are starting from. Already registered and the letter has lapsed or the return is due: letter of good standing renewal, R690. Never registered: COIDA registration, R1 290, which covers the registration, the first return and the first letter. Owing the Fund: COIDA arrears, R1 890, which sets up the instalment arrangement that unlocks the letter month to month.

How long it takes

Two different clocks. For a registered employer who files and pays, the letter usually issues within days of the payment reflecting; the slow part is you, not the Fund. For a first registration the Fund has to open the account, assess the first return and process the first payment, which commonly takes two to six weeks. If a tender closes next week and you are not registered, that is the queue you do not want to be standing in, so start today and ask the tender office whether proof of application is accepted in the meantime.

What blocks it

• An unfiled yearIncluding years when the business was dormant. The Fund does not accept nil returns; a business that has stopped files the cessation form. Every open year gets an estimated assessment and a penalty until it is dealt with.
• An unpaid assessmentFiling without paying produces nothing. If the balance is more than you can clear, an instalment arrangement (20 percent down, up to 12 months, interest at prime) satisfies section 86 and the Fund issues the letter month to month while it runs.
• Being with the wrong fundBuilding industry employers insured through FEM, and mining (class 4) and metals (class 13) employers insured through RMA, do not get their letter from the Compensation Fund at all. A garage or engineering works is often with RMA without the owner realising it. Check before you file anything.
• No employeesIf a tender asks for the letter but you employ nobody, do not register. The Fund says to request an exemption letter for tender purposes instead. Registering with no staff creates an account that is assessed every year.
• An unreported accidentThe employer’s report of an accident is due within seven days of an injury on duty. An old unreported injury can hold the letter even when every rand is paid.
• A locked ROE Online accountThe account sits under an email address, often an old bookkeeper’s. Recover it from your side; never hand a password to anyone, including us.

Checking a letter someone sent you

If you are the one who must verify a subcontractor’s letter, section 89 puts the duty on you. Check that the employer name and registration number match the company you are contracting with, that the expiry date has not passed, and that the letter is the current season’s. Ask for the notice of assessment and proof of payment behind it if anything looks off. A letter from last year is not good standing today.

Frequently asked questions