Companies need to rethink payroll services and follow the international trend of investing more in mobile self-service solutions, advises Lavine Haripersad, a director at the South African Payroll Association (SAPA). “It’s time to put payroll in your employees’ pockets or purses. Mobile devices are having a huge impact on our lives,” she adds. The mobile experience According to industry experts, mobile penetration in South Africa is around 37% to 45% of the population. This is due to the introduction of cheaper smartphones as well as a growing dependency on mobile communications for everyday life and business. South Africans use their devices for a myriad of personal activities. At work, however, employees often face the frustration of lengthy processes to complete simple tasks - like leave applications - or access their personnel information. This is in direct contrast to their typical online experience. “We need to see workers as consumers and find ways to provide the experience they’re used to. That means going mobile,” states Haripersad. What’s available? Many reputable software vendors, such as Accsys, Intuit, Oracle, Sage and SAP offer employee self-service products for small, medium and large businesses, although their features vary. Also, managed services companies providing outsourced payroll services may use a self-service app to make information accessible and reduce costly interactions. “While many apps exist,” advises Haripersad, “companies are usually restricted to the one produced by their business system’s developer.” The following are the most popular features: · View and update personal information Payroll staff spend a lot of time reviewing records. It’s more efficient to allow employees to do it themselves. Their changes can be approved by their manager before updating the payroll database, depending on the workflow structured into the system. · View payslips Notify staff when their payslips are ready through their mobile device and let them download a digital copy. This could save companies millions annually in printing and distribution costs. These are also fast becoming acceptable to retailers who require proof of income. · PAYE & IRP5 Allow employees access to their tax data to keep track of their tax obligations, answer tax queries and submit their returns easily with the information on hand. · Managing leave Reduce manual processing by letting staff submit leave requests through the self-service app. They’ll also be able to check their remaining leave, reducing your payroll administrator’s workload. · Travel & expense claims Employees can submit their travel claims together with other expenses. These can be automatically forwarded to their manager for approval before being submitted to the payroll administrator. · Time & attendance Depending on the app, employees could clock in or out with their smartphones, enter the time they worked on a task, or even be reminded of when their next shift will start. · Employee benefits Staff could, at any time, check their benefits to see their current status, such as the value of their pension plan or available funds in their medical aid scheme. · Manager benefits Using a mobile application for items like leave, payroll input or training application approvals saves a line manager a lot of time, as it can be done “on the go”, while being able to be assured that your staff are at work when they should be is also useful. Ultimately, using mobile applications which allow employees to participate in what used to be traditional payroll processing, will allow payroll staff to spend less time servicing common requests and focus more on strategic activities. In conclusion, Haripersad encourages every organisation to investigate the benefits of a mobile self-service app. “Technology is evolving fast and payroll must keep up if companies want employees to be happy and productive. This means making information and services available to them in a way they’ve come to expect.” SAPA will be hosting its annual conference this year titled Portraits of Success as follows:
To register visit http://www.sapayroll.co.za/Events/Conference.aspx ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association
0 Comments
SARS must revise Employment Tax Incentive to reduce administration factor and boost jobs for youth22/6/2017 Author: Lavine Haripersad, director, South African Payroll Association It may be necessary for the South African Revenue Service (SARS) to review some of the binding conditions related to the Employment Tax Incentive (ETI) that it introduced in January 2014 to stimulate employment for work seekers with little work experience and in the age bracket of 18 to 29 Years. This would aid in reducing the administrative burden associated with ETI for the extended period to 28th February 2019. Through the ETI employers are incentivised by way of a reduction in PAYE according to the prescribed ETI guidelines, provided that the employer is fully compliant for all registered taxes. Supporting the ETI program is a no brainer as our youth unemployment is in the range of 52% and there is an urgency to change this situation. It’s good, but… In so much as the effect has been partially positive in seeming to boost employment for young work seekers and providing them with a platform to launch their careers, it lacked administration consideration for payroll departments. It seems that it has been manipulated by some employers who are claiming the incentive for workers they would have employed in any case, without creating new jobs. The payroll department has to contend with multiple issues resulting from a set of prescribed guidelines in the Act which do not appear to take the actual work and business environment realities into account, as well as payroll systems’ inflexibility to have robust programming to accommodate the ETI prescribed rules. This has been a major reason that has made business shun away from implementing ETI. Ultimately the noncompliance resulting from this becomes payrolls’ accountability. The difficulty experienced with lack of clarity about implementation of the new (and changing rules) and the slow rate of some payroll systems to program the complex rules has resulted in noncompliance as well as additional manual intervention by the payroll department to verify the calculations. Some of the issues It is known that companies have had problems with the payroll system programing where it is unable to manage the exclusion of non-qualifying employees when they turn 29.11 years, resulting in claims being made for employees who do not qualify. The value of the remuneration must be based on 160 ordinary hours per month, excluding overtime and unpaid hours. This means that if less than 160 hours is worked, the system must gross up the remuneration to 160 hours per month to calculate the value of the ETI which must then be grossed down on the same basis. This means that hours worked must be recorded and tracked for the correct claim calculation to be made. The calculation needs to be rules based to avoid manual intervention. This adds complexity with system programming and as a result is often managed manually. Employers must ensure that they adhere to the qualifying period of 24 months claim for each individual. The 24 months need not be consecutive. Here again it is critical to have systems in place to manage this as non-adherence will be penalized. In addition, one of the ETI requirements is that an employer must remain tax compliant for all registered taxes to be able to claim the tax incentive. If at any stage the Employer is found to be non-compliant, all ETI previously claimed may be subject to reversal. The implications are that interest and penalties are imposed on arrear taxes. To rectify the process can take up to 21 working days as there is no ETI dedicated contact at SARS. This becomes administratively burdensome. To avoid this situation, the payroll department must be proactive and add an additional control function in their already busy schedules. A monthly statement of account must be requested from SARS (or can be obtained from e-filing through the person who is accountable for this in the Company). This must be reviewed and any abnormal item reflected must immediately be raised as a query with SARS and rectified to ensure that the ETI claim is processed by SARS. SARS have issued a Draft Binding General Ruling on the ETI Act 28 of 2013 for which comments must be submitted by the 24 July 2017. This clarifies the definition of remuneration which states that overtime is excluded from the calculation of remuneration for the 160 hours in the month. Previously variable pay that was paid was included in the calculation of remuneration. Although welcome, the question is when implemented, do we recalculate the history based on the new ruling? The South African Payroll Association welcomes input from business, so that ideas regarding the General Ruling can be submitted. Given all of the above employers are still required to be fully compliant and to ensure incentives are claimed correctly as SARS applies strict measures for the utilization of the incentive by employers. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association Author: Lavine Haripersad, Director of the South African Payroll Association (SAPA)
Wage overpayments can have a significant impact on the corporate bottom line, employee and business taxation, and also employee relations. It is a complex issue which requires that payroll management and HR work together to ensure that systems and controls are put in place to prevent this type of error from happening. There are numerous reasons why overpayments occur. These include errors in administration and capturing, late terminations, non-adherence to policies and procedures, ineffective time recording administration and duplicate records. Each of these issues can be addressed through systems process, individual accountability, operating in a highly-controlled environment and regular payroll audits. Addressing the challenges Robust internal controls within the payroll department must be implemented and documented to mitigate employee record duplications and payroll errors from occurring. These should include regular payroll audits, run monthly, which pick up any new or residual issues throughout the year. Not only will this dramatically reduce or remove duplication issues, but it will also put payroll ahead of the tax year end process. Time recording is potentially one of the most challenging of the issues impacting on wage overpayments, especially if the organisation has numerous employees paid by the hour. Without accurate time recording, overpayment and subsequent recovery of funds become a problem. Often, the individuals responsible for reviewing the time records are not doing it timeously, which results in incorrect data capture and payments. This can also be addressed through more stringent system controls and exacting processes and procedures, and by reviewing time records regularly. This ties into overtime overpayments – if people are working overtime without authorisation, or if their hours are not monitored correctly, it can cost the business a pretty penny. Often, when these errors are found, it is too late to recover the funds. To address both of these concerns the organisation should implement clearly defined rules and a system that prevents manual intervention. It is also important to ensure that there is a segregation between the person administering the time and attendance records, and the person who is authorising them. In other words, these tasks should not be undertaken by the same person. Of course, as with any rule-based system, there must be exceptions. The business needs effective tools which allow for exceptions to be addressed in the system to prevent incorrect payments and tax issues at year end, while operations which conform to the rules can be automated. Reports all the way as Preventative Control It is by running monthly tax validation reports that the business can find and address issues in the system, as well as preventing year end issues around tax and income corrections. Best practice calls for reports to be run monthly to avoid tax year end corrections. . It is also important to have a set of payroll reports which examine elements such as variances on net pay. This will ensure that when there is excessive net pay, it is instantly picked up, investigated and corrected. Termination policies are also vital in mitigating overpayments. If a late termination comes through, an employee can receive a full salary for a month they didn’t work and there are complexities in recovering that amount. Not only is the money almost impossible to recover, but medical aid and other similar schemes will be affected as they need a month’s notice to withdraw. This particular challenge indicates a disconnect between HR and payroll, or between line management and payroll. It is critical that line managers understand the impact on the business of late notification of terminations. Departments need to work closely together to ensure payroll is notified as soon as an employee is terminated. It will prevent them from being overpaid in periods they have not worked and ensure the final payment is accurate.. Communication is key Communication is essential in reducing many of the challenges around wage overpayments. A lean internal communication process between departments, HR and payroll can minimise these significantly. In addition, payroll must ensure that there are processes, procedures and controls in place, do regular checks and correct errors on time. Avoidance is always better than correction as the latter can become a logistical nightmare. While it is common for staff to bring underpayments to management / payroll attention, it is rare for them to notify these departments when they are overpaid! With these boxes ticked and reports run, both payroll and business will be ready when the times comes to roll over into the next pay period, and tax period. Nothing is missing, everything is correct, and payroll is in the perfect place for the tax year end process. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association It’s not uncommon for a payroll to be consistently managed so poorly that workers threaten to strike over incorrectly administered pay. Often, the person administering the payroll is not adequately qualified for the job. Lavine Haripersad, a Director of the South African Payroll Association (SAPA), says such risks are why hiring accredited payroll practitioners is so important. Yet, many employers don’t realise how much skill it takes to run a payroll. “There are literally hundreds of legal requirements and specialised procedures to follow,” she says. “It’s therefore critical that organisations have professional payroll administrators who know, understand and can practically implement them.” So what do the top payroll administrators know (that business managers sometimes don’t)? Correct Procedure Payroll consists of various processes that must be correctly executed. “Qualified payroll administrators know these processes intimately,” says Haripersad. “These processes include record keeping, employee take-on, month-end procedures, year-end procedures, and more.” Calculations There are many complex payroll calculations related to tax, medical aid, pension funds, provident funds, allowances, reimbursements, deductions or bonuses. A payroll administrator knows how to perform them in accordance with the latest legislative requirements. The law Payroll is governed by an extensive set of legal and regulatory requirements. Payroll administrators are trained in the law and ethical governance, and keep themselves updated on new standards as part of their duties. “So they act as advisors to their organisations, guiding them in the right direction to avoid legal problems,” says Haripersad. Information management Payroll information and data must be collected, stored, secured, destroyed and used in accordance with various laws and accepted procedures. “The safeguarding of employee data must adhere to the Protection of Personal Information Act,” warns Haripersad. The proper information must also be submitted to the government at defined intervals. And correctly calculated payroll aggregates must be reported to accounting for recording in the general ledger. “Payroll administrators are well versed in the function of information inside and outside the organisation.” Tax Employee tax is so critical it demands special attention and skills only a professional payroll administrator can provide. This is especially true of larger organisations where the taxable portion of intricate remuneration, allowances, expense claims, deductions, bonuses or perks schemes is difficult to determine. Ethical practices Accredited payroll administrators are specifically disciplined in ethics and bound to the association’s Code of Professional Conduct. Not only do payroll administrators have an authoritative standard to work to; employers also have in SAPA a means to resolve unethical or unprofessional behaviour. The same can’t be said for non-certified administrators. Project management Payroll administrators are also trained to work in dynamic environments like project management where each payroll project might be different from the last. They therefore have project management training and can often act as project administrators. Strategic advisors Overseas companies see payroll for what it is - a key business enabler. International payroll administrators can work towards a Master's Degree in payroll management and provide direction to national and global payroll initiatives. But even a single organisation can derive such value from a well-trained payroll administrator. Payroll administrators offer a wealth of knowledge that an employer can leverage to their benefit. Says Haripersad: “If organisations see payroll administrators as managers rather than workers, they will appreciate the strategic value they stand to gain from their input.” ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: http://www.sapayroll.co.za/ Twitter: @SAPayroll LinkedIn: The South African Payroll Association Why you need qualified payroll staff |
Welcome to the South African Payroll Association newsroom.
Archives
July 2020
Categories
All
|