On April 1st this year, a new Unemployment Insurance Fund (UIF) scale of benefits came into effect as announced by the Minister of Labour in Government Gazette Notice No. 588. The limit for those claiming benefits was increased from R178,464 per annum to R212,539 per annum (or from R14,872 per month to R17,712 per month).
The cause of confusion In previous years, changes to UIF benefits and the value of contributions deducted from employees (and matched by employer contributions) were implemented on the same date, for the same value. So, many assumed that the increase in benefits limits should likewise be applied to contributions limits. But no formal statement to that effect had been issued. As a result, employers and payroll practitioners were uncertain about updating their payroll parameters. In May 2017, the South African Payroll Association (SAPA) published an article by one of its directors, Arlene Leggat, offering clarity. It explained that contributions and benefits are regulated by two separate laws. Contributions are governed by the Unemployment Insurance Contributions Act of 2002 and any changes must be announced by the Minister of Finance through the government gazette. Benefits, however, are regulated by the Unemployment Insurance Act of 2001 and the Minister of Labour must announce changes, also through the government gazette. Like SAPA, various commentators have addressed the issue. Sadly, the very bodies that should supply much needed answers have not only failed to do so but have compounded the problem. Making things worse Leggat refers to an infographic, issued by the UIF at the time of the increase, encouraging organisations to also increase their contribution ceilings. “Lately, we’ve see this erroneous document doing the rounds again, creating more confusion,” she notes. Worse still, it was recently reported that the Department of Labour’s own online U-filing service had applied the new threshold to its calculation for contributions. When asked why, the UIF explained it was an error that was being corrected. “It appears that even the Department of Labour employees are unsure,” observes Leggat. “This demonstrates a lack of communication that must be resolved at the highest level.” The effect of the problem In terms of Section 7(5) of the Unemployment Insurance Contributions Act of 2002, if an employer makes deductions in excess of the payment prescribed by the Act, they must return the amount to their employees even if they’re not refunded by the UIF. However, according to Section (7)(3)(c), if the employer fails to deduct the correct amount, they become liable for the contribution. “This puts employers in a catch-22 situation,” says Leggat. “For companies with hundreds or thousands of employees, it could become a major administrative problem.” The only solution “Our attempts to provide employers with logical answers have little effect if the Department of Labour is as confused as everyone else,” concludes Leggat. “The Minister of Labour, the Minister of Finance or the Unemployment Insurance Commissioner should make a public statement that instructs employers on how to proceed in no uncertain terms.” SAPA formally requests that such a statement be made and invites concerned parties to join its petition of the government to do so. 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
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Author: Cathie Webb, Director, South African Payroll Association (SAPA)
Whenever a worker is retrenched in South Africa, it’s not just one person losing an income. That’s because employees in this country have a high number of dependents. For example, according to the South African Police Union, each 10111 call centre operator supports about 15 dependents. The statistics are probably similar for other industries. That’s why, before any organisation chooses retrenchments, they should do their best to find another way. Alternatives to retrenchment Here are some things businesses might consider, bearing in mind that changes in terms of service require their employee’s consent. • Reduction in work Rather than lose their jobs, employees may be open to working shorter weeks, fewer hours - like half days - or shorter shifts. This means they’ll have some form of income to tide them over, and it frees them up to look for a second job or even another position, making retrenchment unnecessary. • Reduced pay A small reduction in pay across the entire workforce won’t be as hard felt as losing one’s job altogether. Yes, it’s easier to retrench than renegotiate contracts throughout the company. But many have done it successfully. Conversely, freeze increases until the organisation’s fortunes recover. • Voluntary retrenchment Some workers are more desperate to keep their jobs than others, who may have been looking for a reason to move on. Voluntary retrenchment is also a good way of reinvigorating the workforce because those who are no longer aligned with the company’s mission or values are more likely to take the opportunity to leave. • Reduced benefits Although some benefits are required by law, others can often become bloated beyond their value in keeping workers happy and motivated. Reducing benefits gives a business the chance to rationalise their expenditure and, in tough times, employees are more likely to appreciate that necessity. • Redeployment This means either moving willing employees to other departments where their abilities are needed or training them to take on new duties, sometimes completely different to what they were doing in the past. Change is difficult but many workers are keen to extend their skills. • Eliminate overtime Workers are often paid overtime for working after hours or weekends. This need should drop with an ebb in business and companies can safely cancel overtime. However, employment contracts usually require staff to work after hours from time to time without pay, so some extra hours could fall under this clause. • Freeze new hires Rather than reducing the existing workforce, organisations can stop hiring new people. This isn’t always possible because new skills may be required to manage or execute new systems and processes. Again, employers should prefer to up-skill current staff. • Increased duties If a business has enough work but can’t fund the required workforce, the extra duties could be shared by current employees. It’s essential that employers alert them that this is an alternative to retrenchment and that their efforts are appreciated. • Placement assistance programmes Once, business journals lauded companies who helped place employees in new jobs as part of their retrenchment process. Does it still happen? Really, it should. Businesses have large customer, supplier and recruiter databases, as well as strong business networks. All it takes is a bulk email or a LinkedIn post to exponentially increase each retrenched worker’s opportunities. A note to employees There are many ways organisations can avoid retrenchment. That said, new technologies and improved business processes can also lead to positions being made redundant. Skills that were common 5 or 10 years ago may simply no longer be needed in the modern business environment. So, there’s another angle to consider - workers can avoid retrenchment by retraining themselves for jobs that are currently in demand. The unemployment rate in South Africa is one of the highest in the world and, with our current recession, it may get worse. At SAPA, we’re reaching out to employers to not just follow the law but to do their utmost to avoid retrenchments. Sometimes, there’s no other way. But if it’s an excuse to cut costs or improve shareholders’ dividends, this isn’t the right time for such thinking. So please, approach retrenchment responsibly. With the high number of dependents each employee must support, it’s not just one person who will go without. 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 The struggling South African economy has created considerable hardship, with low salary increases coupled with greater calls on disposable income. And this has resulted in a perfect storm driving people to commit fraud, says Arlene Leggat, a director of the South African Payroll Association (SAPA).
“People make unwise decisions when they are under sufficient pressure,” she states, adding that companies can help to combat high levels of payroll fraud by encouraging their payroll administrators to become members of a professional association. “Payroll administrators manage large amounts of money. It therefore makes sense to professionalise this industry from a number of viewpoints, not the least of which is the prevention of fraud,” Leggat puts forward. She states that if payroll professionals have signed up to a code of ethics, they understand the impact. Acting ethically is a conscious decision, and the more it is done, the more it becomes second nature. Additional measure “The other side of the equation is to ensure that the correct controls are in place.” Leggat advises companies to collaborate with their external auditors to design the most effective controls. Because they interact with so many organisations, auditors are best placed to advise on fraud patterns, and what controls work best. Given that payroll processes are software-driven, she adds that real-time variation reporting is emerging as a key mitigator of fraud risk. “Professionalisation, with its combination of an ethical code and ongoing education, and proper controls are the two pillars payroll-fraud detection and mitigation,” she concludes. “Fraud generally, and payroll fraud in particular, are real threats, but these basic measures can really help.” Drivers of professional membership “It’s a relatively new concept in South African payroll, but the trend towards professionalisation in other disciplines, such as tax practitioners and directors, is quite marked. The drivers are very similar: to ensure that people have the right skills for the job, that they sign on to a code of ethics and are subject to the professional association’s disciplinary procedures.” As a member of SAPA, a payroll administrator undertakes to adhere to its code of ethics, and to undertake structured continuous professional development to ensure his or her skills remain current. Any contravention of the code of ethics would lead to the rescinding of the professional certification. Globally, payroll fraud is the number-one source of accounting fraud and employee theft, according to the Association of Certified Examiners. It occurs in 27 percent of all businesses, and the average instance lasts on average for 36 months.[1] Research by PwC shows that South African companies suffer hugely from HR fraud, of which payroll fraud of various kinds is prominent: falsification of entitlement/ employee benefits (36%), false wage claims (39%), ghost employees on the payroll (30%) and misclassification of payroll expenses (16%).[2] ENDS [1] Matthew Garrett, “Payroll Fraud—A big threat and how to avoid it”, Forbes (10 September 2013), available at https://www.forbes.com/sites/matthewgarrett/2013/09/10/payroll-fraud-a-big-threat-and-how-to-avoid-it/#40c6826c746f. [1] PwC, Economic Crime: A South African pandemic (Global Economic Crime Survey 2016), available at https://www.pwc.co.za/en/assets/pdf/south-african-crime-survey-2016.pdf. 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 Fraud—A big threat and how to avoid it”, Forbes (10 September 2013), available at https://www.forbes.com/sites/matthewgarrett/2013/09/10/payroll-fraud-a-big-threat-and-how-to-avoid-it/#40c6826c746f. [2] PwC, Economic Crime: A South African pandemic (Global Economic Crime Survey 2016), available at https://www.pwc.co.za/en/assets/pdf/south-african-crime-survey-2016.pdf. Author: Cathie Webb, Director at The South African Payroll Association During Women’s Month, it is important to consider the gender related problems we still face as professionals. One of the major concerns is the gender pay gap. Although this gap has been growing smaller over the past years, it remains a legitimate problem. Even in a female dominated sector (such as retail, healthcare, cleaning, primary education and secretarial and administrative functions, including payroll), it is often found that male employees are paid more than their female counterparts for the same work. Some of the remedies women can consider regarding the gender pay gap include: choosing to further your education in a field you know is in demand, completing your education, choosing a field or sector that pays well, negotiating your salary at each new career step and requesting constant on-the-job training. Being a true professional A payroll professional is a payroll employee who not only performs their basic job requirements, but also comprehends the implications of managing the payroll function in their business environment. They should be able to add strategic input to the company they work for, rather than only producing accurate and timeous pay slips. Relevant advice on issues such as pending changes to tax law and requirements, making recommendations and transitioning their knowledge with ease from one type of business to the next are some of the important skills a payroll professional should have. Depending on their level of employment and the size of the employer, they should be able to manage a team, deal with HR issues, advise employees on tax issues and be able to manage projects. The importance of the right qualifications Traditionally payroll employees were trained by their predecessors and by the manufacturers of the payroll software used by the company. These imposed limitations in the scope for understanding how to improve systems and a wider view of business and strategy as a whole. As with all other qualifications, when the trained professional learns about the “outside world”, how other professionals work and what is considered to be best practice internationally, they will have a broader impact on their business and be able to add more value. Until the early 2000’s, there were no formal payroll qualifications available in South Africa. An FET certificate in Payroll Administration (NQF Level 4) and an NQF Level 5 Diploma were then introduced, which were both approved by the South African Qualifications Authority (SAQA). Training providers were also accredited by the Services SETA. In late 2015, a BCom degree with a focus on payroll was launched by the Da Vinci Institute for Technology Management, a Mode 2 university. The Da Vinci Institute selected Accsys as the payroll faculty for the degree. These qualifications assist in teaching payroll employees the necessary skills they will need to perform more than just their basic work. Awarding payroll professionals Each year SAPA runs an awards programme for payroll professionals. The programme is designed to give recognition to the people who make a difference in the payroll industry and in their respective businesses. The awards programme serves to motivate payroll employees to go the extra mile in their jobs and truly become payroll professionals. There are three levels in the awards programme, Junior, Senior and Team, and nominees must satisfy strict criteria that measures their professionalism. A list of the criteria is available on the SAPA website, as well as information on who can qualify for the awards, the nomination process and the awards themselves. Nominations for the 2017 awards closed on the 11th August, 2017 and winners will be announced at the Annual SAPA Conference on 6th September 2017 at Emperors Palace. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: www.sapayroll.co.za Twitter: @SAPayroll LinkedIn: The South African Payroll Association The payroll environment is not for the faint-hearted. It is demanding, exacting and driven by deadlines. It is a career where mistakes can be expensive and missing a deadline potentially catastrophic. For those who work in this industry it is essential that they possess a strong work ethic, a commitment to quality and the ability to deliver measurable and reliable outcomes.
Keeping pace with the monthly deadline and the daily checks can be challenging, but those who have the determination can provide organisations with essential and relevant insight and value. “The critical factor is to have the right knowledge and skills as these will ensure success in the payroll environment,” says Lavine Haripersad, Payroll Manager, South African Payroll Association (SAPA). “There are several training milestones that have to be achieved in order to build the knowledge required to become a comprehensive and reliable payroll professional.” Payroll professionals should be up to date with the latest payroll legislative requirements, understand best practice and governance, and be aware of industry trends impacting on the payroll environment. This understanding will allow them to make informed decisions about their role, the work they do and driving business growth. It is a challenging environment, but it is also a rewarding one, especially if the practitioner is committed to education and training. Connecting the dots “Conferences and events are incredibly valuable for professionals who want to expand their knowledge base and their career opportunities,” says Haripersad. “In addition to attending sessions that offer insight and education, there is the chance to network with other practitioners in the industry. Most events offer attendees a forum where they can connect directly with thought leaders, partners and leads.” The weight of knowledge that is traditionally borne by the payroll professional has not previously been recognised as much as it is today. As compliance and legislation continue to impact on mandate and deliverable, the role has become increasingly important. It is vital that practitioners understand how their skills influence organisations and people, and how to capitalise on this to improve performance and engagement. “It is essential that every practitioner map their road to success and have a clear understanding of issues around legislation impacting payroll, labour laws affecting payroll, governance, employee benefits, payroll education and technology,” adds Haripersad. Conference In September, the South African Payroll Association will be hosting the SAPA Annual Conference. It is set to run from 6th -7th September in Johannesburg with two half-day regional conferences scheduled to run on 12th September in Cape Town and 14th September in Durban. The theme of the conference is ‘Portraits of Success’ and it has a clear mandate to focus on how the payroll practitioner can drive personal and professional success through knowledge and understanding. “It is our objective as an organisation to promote excellence in the payroll profession and ultimately create our own ‘Portraits of Success’,” concludes Haripersad. “It is an opportunity for payroll practitioners to learn from the smartest minds in our industry while connecting with their peers and building their careers.” 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 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 It’s personal tax season again and millions of South Africans are busy filling out their tax returns. To avoid any delays in this widescale process, payroll departments across the nation must work quickly and in strict compliance with the law. Failure to do so could result in heavy penalties for their organisations. Arlene Leggat, a director at the South African Payroll Association (SAPA), says that, to satisfy all statutory obligations, not just tax regulations, payroll practitioners need to be suitably qualified. “Payroll plays a leading role in any organisation’s governance and compliance efforts. To reduce risk, employers must ensure their administrators are competent.” But how can they guarantee that this is the case? Practitioners and good governance Payroll practitioners should be driven by good governance practices and must stay abreast of current legal requirements. For example, the recent Protection of Personal Information (POPI) Act places an additional burden on businesses to carefully manage and protect any personal information they store or process about their workers. Practitioners must be aware of such developments and understand how to remain compliant with them in the course of their duties. According to Leggat, as compliance requirements increase, more companies are realising the importance of a professional designation. “SAPA is the recognised regulatory body for payroll practitioners in South Africa,” she says. “When companies hire outsiders, there’s no guarantee they’ll get someone who is competent in their field, and the risk of falling short in their legal obligations is growing year by year.” To be awarded one of SAPA’s professional designations, applicants must have the relevant qualifications and experience needed to perform their duties at junior, mid or senior levels. But even after becoming a member, they’re required to continually improve their payroll skills and knowledge. CPDs A core component of ensuring SAPA members understand good governance practices and compliance with legislation is the association’s continuous professional development (CPD) programme. Members must accumulate a set number of CPD points every 2 years to retain their SAPA title. This can be achieved by attending SAPA-approved courses, each carrying a predetermined number of points. Code of ethics In addition, members are bound to a code of ethics and any breach could result in their membership being revoked. This gives employers the assurance that their payroll officer strives to conduct themselves in a manner befitting their legal and moral responsibilities. In addition, organisations have in SAPA a channel through which to voice any grievances. Hiring for compliance Leggat advises companies to avoid the dangers of non-compliance and promote good governance by hiring SAPA approved payroll practitioners. “We sometimes read of incidents of payroll fraud or noncompliance, and this is usually the result of employing unregulated administrators. For members of a professional body, there are too many controls in place, so poor conduct puts their careers at risk. Therefore, our designations alone promise a high level of compliance and governance.” Employers and unregistered practitioners are invited to enquire about the benefits of SAPA membership. 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
Author: Nicolette Nicholson, director at the South African Payroll Association With a sluggish economy, low growth and our recent downgrade to junk status, South Africans now find themselves in a new national recession. At times like these, enterprises want a healthy workforce but are hard-pressed to fund it. However, employees, facing a higher cost of living, may feel it’s time to ask for a raise. Below is my advice to each party. Demanding or begging for an increase without warning is never a good idea, especially when times are tough. For the best chance of success, try the following strategy: Determine your worth Requesting a raise because you’re adding value is always better than simply asking for more money. If you don’t already have copies, ask HR for your employee history and performance reviews, and list how you’ve contributed to the company. Add anything you can remember and keep your information sources as evidence. Do an online salary survey of your position to determine what market related remuneration seems to be, and to arrive at a reasonable figure or percentage you can ask for. Remember that benchmarking your salary in the market is very important in order to understand whether you in fact are remunerated under your worth. Remember to take into account benefits such as pension / provident fund, medical aid, study assistance, or any other items provided by your company. Imagine the conversation that might take place and think of any possible objections to your request. Then come up with a logical, non-defensive response for each. You’ll be less flustered if you’re prepared, and it will build your confidence. Do not promote your hard work as a reason for a raise, rather highlight ways you engineered to work smarter and how this increases your value as an employee. Schedule a meeting Don’t ambush your manager. Rather schedule a meeting and let them know it’s about your salary to allow them time to prepare. At the meeting, be assertive but not combative as you state your position and provide your assessment. If they disagree, point to your evidence. While negotiating, never threaten to leave if you’re not willing and able to do so, as your bluff might be called. At the appropriate point, state your desired increase and be prepared to justify it. Also indicate if you’d be willing to settle for any perks that will save you money, such as working from home, working flexi-time or being allowed to bring your child to the office. If your manager needs approval for your raise, set a follow-up date with them and check back promptly. Be mindful to make an appointment with a line manager that has the mandate to motivate or reject your application. Don’t get caught up in a musical chair situation and by the time your application is placed on the table for discussion, it is no longer what you initially negotiated. The result If you win your increase, congratulations. However, if it’s denied, that doesn’t mean defeat. Keep adding value, while keeping an eye on the company financials and when profits start improving, ask again. If you feel strongly that you deserve better now, you could use your research to fill out your CV and begin looking further afield. While your employer may no longer have the funds to offer top financial compensation or benefits, other ways exist to reward and motivate employees. When considering alternative compensation, always strive to add value to your situation. Any benefits should be tangible and immediate to provide motivation on a daily basis. From a Business Perspective - Saving money Help employees get more from their earnings. Consider engaging a lifestyle coach or financial advisor to teach staff to achieve similar comforts from a more frugal budget, reduce waste, or focus on healthier, more mindful living. This illustrates your commitment to their wellbeing and motivates them to stay productive, while it shows that the business recognises the financial difficulties that tough economic times bring. Investing in a wellness programme can actually save money. They’ve been proven to reduce absenteeism, increase motivation and productivity, promote a sense of self-worth, reduce workplace stress, and make employees feel valued by the company. If possible, let staff work from home to reduce their travel costs and enjoy a sense of freedom. This can be one day a week, alternating days or any other scheme, but have measures in place to ensure strong communication and task tracking. Consider allowing staff to come to work and leave when they want to, as long as they’re present for an agreed number of hours. They can miss traffic to or from work and have greater control of their time, which is often more appreciated than extra pay. With new millennium technology, many office-based staff can easily schedule specific workdays to work from home. One may find that staff is more disciplined than anticipated and will appreciate this gesture as a benefit. This arrangement gives employees the opportunity to set a schedule that best works for them both personally and professionally. Children might not need to go to afterschool care if one parent can work from home. Productivity and quality of work is a given if this is agreed and managed properly. An employer can also save on workspace and equipment. 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 Photo caption: Nicolette Nicholson, Director at the South African Payroll Association 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 Associatio The current economic outlook is set to have an impact on the bottom line, business and morale, but robust payroll auditing and management processes can curtail risk and support growth. Even in a recession there are specific steps that can be put in place to mitigate risk and enhance payroll effectiveness, ensuring that finances are tightly controlled and that the organisation is prepared for what the recession has in store – spread the payroll load, use the insight from payroll data, and clearly document processes. “The most common risk area in payroll departments is having one person responsible for the calculation of payroll values, reconciliation and payment,” says Cathie Webb, director, South African Payroll Association. “In a recession, when people feel their jobs and income are at risk, there is a temptation to help themselves to a little bit on the side.” Webb points out that on a psychological level, incremental thefts are often not perceived as a crime. People think that the tiny sums won’t hurt the business. However, this is not true. Every cent removed illegitimately from a business has an effect on every person working there. Reducing the risk “The easiest thing to do to reduce risk is to ensure that the different areas of the payroll cycle are the responsibility of another person,” says Webb. There must always be a high-level view over every aspect of payroll. In a large organisation, it is fairly easy to ensure that the payroll audit is managed by different people, but in a smaller business this may not always be possible. In this instance, there needs to be another person who does sign off and checking before payments are made. “Payroll also plays a supportive role in tough economic times,” says Webb. “Strong payroll administrators should be looking for areas where they can add value and strategic input. For instance, in a multi-departmental branch or organisation, they can assess things like leave patterns and even identify management issues. Payroll has the ability to uncover behavioural patterns that can be managed or enhanced to boost business productivity, cut back on waste and even encourage growth in a recessive environment.” Document and detect Payroll can use its understanding of finances and budgeting to support employees and businesses in better managing money. South African suffers from a debt culture and few people save for the proverbial rainy day. Payroll’s role in educating people, showing them the value of not spending more than they earn and giving them the tools they need to save for the future, will play a role in the financial success of the organisation. Finally, payroll’s place in protecting against the impact of the recession can be found in the documentation. Webb recommends that the payroll department has clear checks and balances that are adhered to rigorously as it is one space where mistakes and missed deadlines cannot be tolerated. “This way, payroll frees their minds from having to remember the small things so they can focus on ways to add value,” concludes Webb. 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 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 |
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