It’s September. Somewhere in your inbox, a client, principal contractor, or tender administrator has asked you for a valid Letter of Good Standing, and you’ve just discovered you can’t produce one.
If that’s the position you’re in right now, you’re not alone, and you’re not the first business owner to have COIDA’s Return of Earnings quietly slip off the radar while you were focused on actually running your business. The 2026 submission window for the Return of Earnings (ROE) to the Compensation Fund closed on 30 June. That deadline has come and gone, and for businesses that missed it, the consequences aren’t hypothetical anymore, they’re showing up as blocked contracts, awkward client calls, and a growing sense that this is going to cost more than a form should.
This isn’t another how-to-file guide. If you’re past the deadline, filing instructions don’t help you today. What you need to understand is exactly what’s now at stake, and what you can still do to limit the damage.
What a Letter of Good Standing Actually Is (and Why Everyone Suddenly Wants One)
A Letter of Good Standing is the Compensation Fund’s confirmation that your business is registered under COIDA, has submitted its Return of Earnings, and is paid up on its assessment. It’s proof that if one of your employees, or a contractor’s employee working on your site, is injured or falls ill because of their work, the Compensation Fund will cover the claim.
That’s precisely why clients, principal contractors, and tender panels ask for it before they’ll sign anything. They’re not being bureaucratic for its own sake. Under the Occupational Health and Safety Act and standard risk-management practice, a principal contractor who allows an uncovered business onto a site or into a supply chain can be held partly liable if something goes wrong. So they push the risk back down the chain: no valid Letter of Good Standing, no work order, no site access, no signed contract.
For SME consultancies, professional services firms, and creative agencies, this letter has become as routine a request as a B-BBEE certificate or proof of banking details. The difference is that most businesses remember to renew those. The Letter of Good Standing gets forgotten precisely because it depends on a once-a-year submission that has no natural trigger in your calendar, until a client asks for it and you realise it’s expired or was never renewed.
The Compounding Cost of a Late or Missing Return of Earnings
Missing the 30 June deadline doesn’t just mean “we’ll get to it eventually.” It sets off a chain of consequences that get more expensive the longer they sit.
The 10% late penalty. The Compensation Fund is entitled to add a 10% penalty to your assessment for late submission of the Return of Earnings. That’s calculated on your total assessed earnings, not a flat administrative fee, so the cost scales with your payroll.
A blocked or invalid Letter of Good Standing. Without a submitted and assessed ROE, the Fund has no basis to issue you a new letter. If your previous letter has expired, you’re now operating without one at all. Existing clients relying on it may be in breach of their own compliance obligations by continuing to work with you.
Contract and tender risk. This is where the pain becomes visible fastest. Public sector tenders and many private-sector supply chains require a valid Letter of Good Standing as a non-negotiable submission document. No letter typically means disqualification, not a grace period. If you’re mid-negotiation on a contract renewal and this comes up, you’re now explaining a compliance gap instead of closing a deal.
Personal liability exposure. This is the consequence that gets underestimated. COIDA’s no-fault compensation system exists specifically so that an injured employee is compensated by the Fund rather than suing the employer directly. That protection depends on your business being registered and assessed. If your registration has lapsed and an employee is injured or contracts a work-related illness while you’re non-compliant, the ordinary common-law liability shield COIDA provides may not apply cleanly, potentially exposing the business, and in some structures the owner personally, to a direct claim. It’s a low-probability, high-severity risk, and it’s the kind of thing you only think about after it’s too late to matter.
None of these consequences are reversible by explaining that you were busy. The Fund works off what’s been submitted and paid, not what was intended.
What You Can Still Do Now
The good news: late is recoverable. Ignored is not.
- Submit the outstanding Return of Earnings immediately, even though the window has closed. The Compensation Fund does still process late submissions, the priority is getting your earnings data on record so an assessment can be issued.
- Settle the assessment, including the penalty, as soon as it’s raised. A Letter of Good Standing won’t be issued while there’s an outstanding balance, penalty included.
- Request your updated Letter of Good Standing once the assessment is paid, and don’t wait for a client to ask for it again, get it into your compliance file now.
- Check your registration details are current. A mismatch between your registered earnings, employee numbers, or industry classification and reality is one of the most common reasons ROE submissions get queried or delayed further.
- If you’re mid-tender or mid-contract right now, communicate proactively with the client or principal contractor. A business that’s visibly remediating a lapse reads very differently to procurement teams than one that goes silent.
Why This Keeps Happening (and How to Stop It Being Your Problem Again)
The Return of Earnings deadline is a perfect example of the kind of compliance obligation that has no natural home in a small business. It’s not monthly like payroll, it’s not urgent-feeling like a client deliverable, and it’s easy to assume “someone” is handling it, until no one is. For a 15-person agency or consultancy without a dedicated HR or payroll function, this is exactly where things fall through the cracks, not because anyone was careless, but because nobody owned it.
This is the gap outsourced HR and payroll support exists to close, not just running payroll, but holding the compliance calendar so COIDA, UIF, and the rest of your statutory obligations don’t depend on someone remembering in the middle of a busy quarter.
Find Out What Else Might Be Slipping
If a missed Return of Earnings caught you off guard, it’s worth asking what else in your HR and compliance setup hasn’t had a proper look in a while. Our free HR Self-Audit Assessment takes a few minutes and gives you a clear picture of where your business stands, before a client, auditor, or tender panel finds the gap for you.
Take the free HR Self-Audit Assessment →
Prefer to talk it through directly? Get in touch to book a consultation and we’ll help you get your COIDA compliance, and everything else on your HR checklist, back on solid ground.
