A COIDA Letter of Good Standing confirms you are registered with the Compensation Fund, have submitted your Return of Earnings, and have paid your assessment. It is valid for a limited period and lapses silently. An expired letter disqualifies a tender bid outright — evaluation committees do not accept "the renewal is in progress". If yours has lapsed with a deadline approaching, act today.
Nobody discovers this at a convenient moment. They discover it while assembling a bid document.
Why does an expired letter disqualify the bid?
Because most tender documents specify a valid, current Letter of Good Standing as a returnable, and a returnable is not a negotiation.
Evaluation is a compliance check before it is a judgement of merit. The committee works through the returnables list and marks each one present or absent. An expired letter is absent. The bid does not proceed to price or technical evaluation — it stops there, regardless of how good it was.
"The renewal is being processed" is not a valid letter. Some committees will accept proof of application in limited circumstances; most will not, and you cannot know in advance which you are dealing with. Plan on the assumption that it will not be accepted.
What does a Letter of Good Standing actually confirm?
Four things, and each one is a place it can fail.
| Requirement | What it means | Common failure |
|---|---|---|
| Registered as an employer with the Compensation Fund | You are on the system | Never registered — very common in small contractors |
| Return of Earnings submitted | Your annual ROE is in | Missed the deadline, or filed with wrong figures |
| Assessment paid in full, or on an approved instalment arrangement | The money is settled | Assessment disputed and unresolved |
| Accidents reported timeously | Incidents on record | Injury never reported |
The Return of Earnings is the one that fails most often, and it is the one with the longest lead time to fix. If your ROE has not been submitted, the letter cannot be issued — no matter how quickly you pay.
There is no threshold and no exemption. No minimum turnover, no minimum hours, no exclusion for part-time or casual staff. If someone works for you and you pay them, COIDA applies. See COIDA registration explained.
What do I do this week?
Work in this order. The sequence matters because each step depends on the one before.
1. Establish what is actually outstanding. Not registered at all? ROE not filed? Assessment unpaid or disputed? An unreported incident? The remedy is different for each, and guessing wastes the days you have.
2. If the ROE is outstanding, that is the critical path. You need accurate earnings figures for the assessment period — actual remuneration paid, per the definition that applies. Do not estimate. An ROE with wrong figures produces a wrong assessment, and disputing it later holds up every future letter.
3. Settle the assessment. Paid in full, or under an approved instalment arrangement. An arrangement counts, but it has to be approved and in place — an intention to pay is not an arrangement.
4. Apply for the letter and keep every reference number, submission confirmation and payment proof.
5. Tell the client, in writing, before the closing date. Where the tender permits any form of clarification, a factual letter stating what has been submitted and when, attaching proof, is far better than silence. It will not always save the bid. It sometimes does, and it costs you nothing.
6. Assume you may lose this one. Painful, but it changes what you do next — which is to make sure it never happens again rather than fighting a bid that has already gone.
Why did nobody warn me?
Because nothing in the system is designed to.
It expires on its own cycle, unrelated to your financial year end, your CIPC anniversary month, or your tax year. It does not align with anything else you diarise.
No reminder arrives. Not from the Compensation Fund, not from your client, not from the CIDB.
The document itself looks permanent. It is a letter on a letterhead. Filed in a bid folder, it reads like a certificate rather than something with a shelf life.
And it is usually somebody else's job. In most small contractors, whoever assembled the last bid has the only copy, and they may not work there any more.
How do I make sure this never happens again?
Five things. The first two are most of the value.
1. Diarise the Return of Earnings hard. The ROE deadline is the real deadline — the Letter of Good Standing is downstream of it. Diarise it a month early, with a second reminder a fortnight before. Every other deadline in your business costs a penalty if missed. This one costs your ability to bid.
2. Renew the letter before it expires, not when you need it. Renewal is cheaper and faster than a lapsed reinstatement, and it removes the entire category of problem. Smartbook renews for R750 against R1,750 for a first application.
3. Keep one register of every expiry, in one place, that someone owns:
| Document | Expires | Owner | Renewed |
|---|---|---|---|
| Letter of Good Standing | |||
| CIDB registration | |||
| CSD registration | |||
| Tax compliance status | |||
| B-BBEE affidavit | |||
| PAYE, UIF, VAT current |
4. Keep the payroll accurate all year. The ROE is only as good as the earnings records behind it. A contractor with clean monthly payroll files the ROE in an afternoon. A contractor reconstructing wages from cash books and memory does not.
5. Collect your subcontractors' letters too. Where a subcontractor is not registered with the Compensation Fund, their employees are deemed to be yours and the liability follows. Get proof of registration and a current letter from every sub before they start on site — not when a claim arises.
Does this affect anything besides tenders?
Yes, and the exposure is larger than the bid.
A workplace injury with no cover. The Compensation Fund exists so that an injured employee is compensated without suing the employer. An unregistered employer loses that protection and faces the claim directly, plus penalties for having failed to register.
Private-sector contracts. Corporate clients increasingly require the same letter their public counterparts do, and require it of their contractors' subcontractors.
Your own upstream position. Where you are the subcontractor, the main contractor needs your letter — and where you cannot produce it, they carry your employees, which is a good reason for them to appoint somebody else.
Site access. Many principals will not let an unregistered contractor onto site at all.
Frequently asked questions
What is a COIDA Letter of Good Standing? An official document from the Compensation Fund confirming that an employer is registered, has submitted its Return of Earnings, has paid its assessment or is on an approved instalment arrangement, and has reported accidents timeously.
Can I still bid with an expired Letter of Good Standing? Generally no. Most tenders require a valid, current letter as a returnable, and an expired one is treated as absent — the bid is disqualified before it reaches evaluation on merit.
Will "renewal in progress" be accepted? Sometimes, but you cannot rely on it. Some committees accept proof of application in limited circumstances and many do not. Plan on the assumption that it will not be accepted.
Why can I not just pay and get the letter today? Because the letter also requires the Return of Earnings to have been submitted. If the ROE is outstanding, paying does not resolve it — and reconstructing accurate earnings figures takes time.
Does COIDA apply to a business with one part-time worker? Yes. There is no minimum turnover, no minimum hours and no exemption for part-time or casual employment. If someone works for you and you are paying them, COIDA applies.
Do I need my subcontractors' Letters of Good Standing? Yes. Where a subcontractor is not registered, their employees are deemed to be yours for COIDA purposes and the liability becomes yours. Obtain proof before they start work, not after.
What happens if an employee is injured and I am not registered? You lose the protection the Compensation Fund provides, face the claim directly, and are exposed to penalties for having failed to register.
How often does the letter have to be renewed? Annually. It lapses on its own cycle, which does not align with your financial year end, CIPC anniversary month or tax year — which is why it catches people.
Fix the calendar, not just the letter
Getting this letter reissued solves today. It does not solve the fact that it will expire again next year, on a date nobody has written down, probably in the same week as a bid.
Smartbook keeps contractors' compliance calendars: the Return of Earnings filed on time from payroll records that are accurate all year, the Letter of Good Standing renewed before it lapses, and CIDB, CSD and tax compliance tracked alongside it.
Renew your Letter of Good Standing — R750 →
Not registered yet? Get a Letter of Good Standing — R1,750 →
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Last reviewed: 13 August 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Compensation Fund processes and turnaround times change from time to time — confirm current requirements before relying on a deadline. General guidance, not advice on your circumstances.
Primary sources: Compensation Fund, Department of Employment and Labour · Compensation for Occupational Injuries and Diseases Act 130 of 1993 · CIDB