While many South African citizens would agree that payroll measures are put in place to prevent or detect fraud, this is not the most important reason to ensure that a company has proper controls and frameworks, South African Payroll Association (SAPA) board chairperson Arlene Leggat points out.

Speakers at SAPA’s annual conference, which took place across three South African cities, further highlighted why companies needed to ensure that they have the correct measures in place. Leggat relays some of these points.

The first step of implementing these controls is to ensure that your company’s payroll complies with legislative requirements.

“We all have the same legislation to comply with,” she points out, adding that the focus would then move to what makes your organisation different - internal policies.

“Are the policies compliant and then are they being implemented as intended?”

Challenges in introducing a framework
When it comes to the implementation of a payroll framework within an organisation, Leggat points out that while the actual application shouldn’t be challenging, there are other challenges companies face that aren’t always obvious.

“There are way too many payroll departments out there who presume that the system is legislatively compliant and so it is not checked. If you can run a payroll, you should make time to ensure that it is correct,” she urges.

Time pressures are often an obstacle that payroll manager and administrators face. Leggat explains that it is hard to impose a deadline schedule, which allows time to correctly do all the checks and controls when the payroll department is not supported by a company’s human resources department, or its managers.

“There is always someone who hasn’t done what they need to do in time, and to make sure the employee is not penalised, payroll needs to try and get things processed. This makes their window for checks and controls much shorter, which then allows for errors.”

To err is human, but at what cost?
Leggat further highlights that as human intervention plays a part in any payroll environment, it will always bring about the possibility of mistakes.

“In light of the value of some payrolls, an undetected mistake could be very expensive, and that is the main reason for setting up proper payroll controls. It is to ensure that mistakes that are made within the payroll environment are picked up and corrected before they become significant payroll errors.”

Not implementing payroll controls and frameworks also poses significant risks to a business, Leggat says.

“Those risks generally do not involve fraud. I have seen over payments ranging from R10 to R3-million to employees; legislative errors, which cost a pretty penny in penalties from the Department of Labour and the South African Revenue Services; losses due to lack of controls in bursary and loan structures."

"The financial loss to an organisation can be huge and that is what the controls need to mitigate. As far as non-compliance goes, one runs the risk of setting a precedent and facing the same penalties, again.”

“As far as controls are concerned, I think that consistency is an imperative."

"Do not rely on an external auditor to pick up any issue; run your own internal audits on a regular basis, get a payroll consultant in to work through your payroll to pick up any issues and design an internal payroll audit program that is thorough and covers all bases,” Leggat notes.

ENDS
​
MEDIA CONTACT: Rosa-Mari Le Roux , 082 573 9219, rosa-mari@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

Payroll fulfills many roles within an organisation. Besides being responsible for employees’ compensation and ensuring that the business complies with various legislations, payroll can also drive engagement with employees.

Christelle Helling, Executive Committee Member of the South African Payroll Association (SAPA), says that payroll managers have many hats to wear within a business.
 
“Payroll is the custodian of very personal and important information within a business. We create a safe space for people to come and discuss matters relating to their salaries.

As payroll managers, we need to be empathetic and make sure we are proactively driving communication about everything from retirement policies and medical aid benefits to smarter saving, budgeting and investing,” says Helling.
 
Helping employees be smarter with their money
Many companies offer different employee benefit packages. When policies change, or new options become available to staff, it is payroll’s role to engage with workers so that they make the best decisions for themselves, their families, and their financial goals.
 
“Sometimes a simple email communication is enough to update employees, but other times payroll needs to work more closely with HR to ensure certain topics are addressed within a more appropriate platform for the target audience.

Being able to continually communicate what the company offers employees in terms of benefits is also very beneficial to the company because it serves as a live advertisement of how the business takes care of its employees,” says Helling.

Better corporate responsibility and ethics is encouraging
According to a 2018 study by LRN, provider of governance, ethics and compliance management applications and services, whether a company acts ethically is a significant factor in the average American’s willingness to work for an employer.

Their study showed that one in three employed Americans had actually left a job because they disagreed with a company’s business ethics. According to the 2016 Cone Communications Millennial Employee Engagement Study, three-quarters (76%) of Millennials would take a pay cut to work for a socially responsible company.
 
“In addition to the financial obligations that a company has towards its employees, payroll has to ensure that a company’s activities adhere to the country’s tax obligations and comply with employment legislation.

Employees don’t want to work for or engage with unethical businesses.

Payroll acts as a watchdog and if payroll can meet payroll deadlines consistently and accurately, then employees have more trust in the company’s ability to uphold its commitments to the law, society and the communities in which it operates.

A good payroll department encourages employees to work harder for a brand and it upholds the company’s reputation in the industry,” says Helling.
 
Aligning teams for better engagement
At a departmental level, payroll acts as Switzerland between the finance and the HR team. “Payroll often works very closely with the accounting department as well as the people team.

When payroll is closely aligned with these departments, engagement with employees goes up.

Ensuring all the departments use the same language and are working towards the same goals has become a core function of the payroll department,” concludes Helling.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@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

Since 2014, a Cape Town father, Henri Terblanche has been campaigning for more parental leave for fathers.  Fathers were only entitled to 3 days family responsibility leave as stated in the Basic Conditions of Employment Act.
 
Mr. Terblanche’s campaign was based on research done in Norway and Sweden and emphasised the benefits it would have for our society. The African Christian Democratic Party (ACDP) then tabled a private member’s bill, relying principally on Mr. Terblanche’s campaign, to help push the process.
 
What the Bill entails
The Bill provides for 10 days paid parental leave for fathers, as well as 10 weeks consecutive leave for mothers.
The Bill was seen as a major breakthrough for same-sex couples, especially men, who were never entitled to the time needed to introduce a child into their family and bond with it. 
 
The Bill also provides for parents of adopted children under the age of 2 years.  An employee is entitled to at least 10 consecutive weeks of adoption leave, which starts on the day the adoption order is granted.
 
For a surrogate motherhood agreement, a commissioning parent is also allowed at least 10 consecutive weeks of leave, which begins on the date of childbirth.Only one parent may take adoption or commissioning parental leave (both 10 weeks). The other must take parental leave (10 days).

In November 2017 the Labour Law Amendment Bill was passed by Parliament. 

A big victory for parents
On 23 November 2018 President Cyril Ramaphosa signed the Labour Relations and Labour Amendment Acts into law. 
This is a major step forward for parents in South Africa.  “For fathers to be able to claim their parental leave from UIF is a much bigger victory than it may seem” says Christelle Helling from the South African Payroll Association (SAPA).

What this means for companies
“Companies will have to revise their policies and procedures to accommodate the changes to the Basic Conditions of Employment Act” notes Helling.  These changes will have to be implemented fast because the Act comes into effect from January 2019.
 
How South Africa compares to the rest of the world
Around the world fathers’ rights to paid paternity leave varies greatly.  When compared to the rest of Africa, our new law of 10 days paid parental leave is very progressive, as the norm is between three and five days. We also compare favourably to countries such as Italy (one day, paid), New Zealand (two weeks, unpaid) and the United States of America (12 weeks, unpaid).
 
We do however still fall behind countries like India (three weeks, paid), Iran (three weeks for the first and second child, paid), Spain (15 days, paid), Finland (54 days, paid) and Iceland (3 months, paid).

However slow the progress might have been, at least we are catching up.
 
ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@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

Authored by: Sumeshan Nair, Executive Committee Member of the South African Payroll Association (SAPA)

Many employees look forward to their annual bonus, only to be met with disappointment when a large portion of the bonus is deducted for tax.

Sumeshan Nair, Executive Committee Member of the South African Payroll Association (SAPA), says that “employees can pay extra tax on a monthly basis towards the tax that would be deducted from their annual bonus so that no tax is deducted when a person receives their annual bonus.”

“An amount is included in an employee’s monthly tax calculation to compensate for the tax on the bonus when the annual bonus is paid. This way, the employee effectively pays their ‘bonus tax’ month on month to get a full bonus payout” says Nair.

Employees can request this option from employers
One of the main reasons for companies failing to offer this option to staff is because they are unsure of how it works or how the monthly tax deductions should be calculated therefore not offering it to their employees.
This has led to employees being unaware of the option for provision for tax on bonus and thereby being hit with a large tax deduction on their annual bonus.

“If more employees request this option, then payroll professionals can request that their employers change the status quo so that this becomes a standard offering for employees,” says Nair.

Payroll vendors offer automated functionalities and training
Nair says “Different companies have different approaches on how they make provision for the tax on bonus for their employees and that the process will depend on the payroll vendor or software that is used. Leading solutions providers offer very straightforward options to automate this calculation.”

“Payroll professionals can ask their vendors whether their software incorporates these options and they can also request training from their vendor on how to use this functionality. It is important to embrace change through the digital solutions that are at a payroll professional’s disposal,” says Nair.

Nair warns payroll professionals against doing their own calculations when processing monthly tax deductions for the tax on bonuses themselves as the software that they use often has this functionality.

“It is always best to opt for an automated calculation when determining an employee’s provision for tax on bonus. The employee’s tax on bonus will be based on an individual’s marginal tax rate, so if the employee falls within the 35% tax bracket within a tax year, he will pay approximately 35% of his bonus to taxes. Instead of this happening, the tax can be automatically calculated and deducted each month so that employees absorb the smaller financial knocks throughout the tax year and get their full bonus payout,” says Nair.
​
The provision for tax on bonus is calculated over the tax year and not the calendar year. Nair encourages employees to request this at the beginning of every tax year. “Employees should request it for the next tax year should they want to spread out their tax deductions throughout the year to get their full payout of their bonus,” concludes Nair.

ENDS
MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@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

In an attempt to resolve ongoing statement of account errors in some of the country’s biggest companies, the South African Payroll Association (SAPA) is set to meet with the South African Revenue Services (SARS) acting head Mark Kingon later this month.
 
SAPA board chairperson Arlene Leggat explains that when large organisations submit their EMP201 to SARS, it indicates how much it has deducted from their employees’ pay for tax purposes. The deductions would subsequently be paid over to SARS, clearing an organisation’s account with the revenue collector.
 
“The problem is that SARS compiles all this information into journals. There are no particular reasons for these journals and no-one in SARS can explain what they are for. The figures that are journalised are invariably not related to any payment or EMP201 on the account,” Leggat notes.
 
She further explains that these journals often result in an accounting error, and subsequently an underpayment reflecting on a particular company’s statement of account. “Although this might not seem like a significant issue, it can lead to further damage to the country’s economy,” Leggat warns.

If an organisation reflects an under-payment at SARS, they are deemed non-tax compliant, and therefore cannot receive tax clearance from the agency. “If a company does not carry tax clearance, it cannot do business – it really is that simple. This issue is affecting the ability of organisations to function, grow and create those jobs we so desperately need. Surely, this is something we really need to fix. It is stemming from utter incompetence within SARS.”

Although Leggat cannot give an absolute answer as to how many companies are being affected by erroneous statement of accounts, she states that it is a large majority of the country’s biggest companies, including construction companies and a hospitality groups.

Action Plan
Through its meeting with Kingon, SAPA says it would aim to set a committed team or point of contact in place at SARS, who will deal with any statement of account issues that may arise. “We will be highlighting the issues received from our members and requesting resolution from SARS,” says Leggat.
 
Further, SAPA is seeking commitment from SARS to resolve these long-standing issues.
“We would like to have a process from SARS in how to approach all of these issues – something that is clearly defined and has an expected time-frame and outcome. This will give SAPA and the employers a means to query and escalate unresolved issues within a certain time-frame, instead of continually being fobbed off.”
 
Taking it to the next level
Leggat points out that if no resolve is made through the meeting with Kingon, SAPA will have no choice but to take the matter further. “If a company has tried to resolve its issues with SARS, but it has proof, case numbers, and correspondence; then it is time to go to the Tax Ombud who will further assist in obtaining final resolution,” she says.
 
ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@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

If you have signed an employment contract that specifies something different to the Basic Conditions of Employment Act (BCEA), this will supersede what’s outlined in the Act provided that there is agreement between the parties and the conditions specified are not less favourable than the BCEA, warns Cathie Webb, member (and prior executive) of the South African Payroll Association (SAPA).
 
The BCEA is committed to regulating fair labour practice for both employers and employees in South Africa. It clearly explains what needs to be done when notifying an employer that you are leaving and what the employer needs to do when it comes to final salary payments. The Act also covers a multitude of additional issues and challenges that could face the business or the employee in the workplace, providing clear guidelines that are upheld by law.
 
However, when it comes to calculating remuneration during termination periods, there are some complexities that need to be addressed, which may not be covered by the BCEA.
 
The BCEA states that the notice period must be four weeks (for someone who has worked for more than 6 months with the company).  Many companies, though, require a calendar months’ notice. If the signed contract is for a calendar month, then the employee and payroll have to adhere to this timeline. Generally, the terms and conditions outlined in a signed contract will trump those outlined by the BCEA and employees need to be aware of this from the outset.
 
“That said, an employment contract may not offer working conditions worse than the basic conditions specified in the BCEA,” says Webb. “Employees do need to check their contracts before signing them to avoid unpleasantness. It is exciting to have a new job lined up, but the time to negotiate your employment terms is before you start, not after.”
 
Payroll needs to know
“It is critical that payroll be aware of what’s outlined in an employees’ contract to avoid any confusion when the person resigns,” adds Webb. “For example, many companies do not allow you to take annual leave in your resignation period, but situations may arise that make taking leave during this period a necessity.  This possibility needs to be planned for, so that both the employer and the employee know how this would be dealt with, and what is to be paid out in the final payslip.  Clarity from both sides is essential.”
 
Payroll needs to know and understand the rules of the 3rd parties who are paid from employee deductions / contributions.  Medical aids run from calendar month to calendar month, and contributions are usually made in arrears.  This means that the final deduction from payroll pays for their final contribution to the medical aid.  Pension and provident funds may work differently, with their month running from the 16th of one month to the 15th of the next.  This may mean that, in a company where a 30 day notice period applies and an employee resigns before the 16th of the month, they do not contribute to the fund in their final month, while if they resign after the 16th, there will still be a deduction.
 
Other pay elements like final commissions, travel claims and re-imbursements, shift allowances, etc., should also follow what has been stipulated in the contract of employment. 
 
Employees are also not aware that quite often they are not paid on the 25th of their last month.  Companies have been burned by employees leaving the moment they receive their final salary, and not working the last 5 or so days of their final month.  So companies may have a policy to pay employees who are leaving on first day of the following month. This must be outlined in the contract and will affect the employee if not clearly communicated when they resign.  This may result in an employee having to make special banking arrangements to deal with debit orders which may be set to be processed towards the end of the month.  Payroll can make this process a lot smoother.
 
“The BCEA also outlines how much notice is required according to how long a person has worked at a company,” says Webb. “If you have worked for less than six months it is one week’s notice, if for more than six months it is two weeks’ notice, and if it is more than a year it becomes four weeks’ notice.”
 
Webb emphasises that payroll plays a vital part in ensuring that both employee and employer finish their last month amicably.  
 
“Things need to be maintained by both payroll and HR so that when a person leaves all elements are calculated correctly and comply with the conditions outlined by the BCEA,” 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

If you’re like most South Africans, your favourite day of the month must be payday! Bills get paid, the freezer gets filled and, budget permitting, a few luxuries may be indulged in. But have you stopped to think about the many payroll professionals who make payday possible?
 
Yet, according to Lavine Haripersad and Cathie Webb, both Executives of the South African Payroll Association (SAPA), there’s so much more that payroll does. “It’s time to recognise the many contributions payroll professionals make,” says Webb. “That’s why, on 15th August, SAPA launched its annual National Payroll Week, a campaign already celebrated religiously in the UK, US and Canada.”
 
The initiative will raise awareness of the important role payroll plays in the economy, business and people’s lives. This year, Payroll Week falls over the dates of SAPA’s national conference: 10th - 11th September for the Johannesburg event, 13th September in Cape Town and 14th September in Durban. The official slogan for National Payroll Week South Africa is “We Pay it Forward.”
 
Payroll’s contributions
“In most companies, payroll is seen as a back-office support service,” says Haripersad. “During National Payroll Week, we aim to celebrate and highlight how payroll professionals benefit their companies or the clients they service.”
 
A good payroll team motivates workers to be productive because they know they will be promptly and correctly remunerated for their labour. They also offer a human face to employees who need advice on the complicated calculations that determine their take-home pay. Plus, through voluntary deductions, payroll helps employees manage their money and reach their financial goals. In addition, they keep their organisations compliant with hundreds of ever-changing laws regulating income, taxes, information protection and more.
 
At the same time, payroll acts as a strategic advisor, providing management with information to better plan their workforce needs and control labour costs. Then there’s the economy. “A little-known fact is that payroll contributes 37.2% of the country’s total revenues,” reports Webb. It also ensures that financial planning services, like medical aids and retirement funds, are paid on time. However, that’s just the tip of the iceberg. Other payroll experts, like consultants, service providers or software producers, all contribute to a system that works reliably every month.

Celebrating the week
Making National Payroll Week successful starts with the payroll professional. “We’re asking our members to get creative and find unique ways to draw attention to the occasion and their services,” says Webb. They can hang posters on department notice boards, have colourful balloons in the office, or send electronic flyers announcing the event to everyone they deal with. To build awareness, they should share their photos or fun facts on social sites like Facebook, Twitter or LinkedIn, being sure to use the hashtag #PayrollWeekSA.

​They can also reach out to local news reporters, radio, bloggers or electronic news outlets to highlight their celebrations. Finally, National Payroll Week is about education, so they could hold workshops to help employees understand how their payslips are calculated.
 
SAPA asks organisations and the public to support payroll during National Payroll Week. “And next time you open your payslip,” asks Haripersad, “please remember the hardworking people behind it.”
 
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

Forward-thinking companies put in a concerted effort to empower payroll professionals to take on the role of educating and supporting employees with regards to their benefits and remuneration packages. Employees that get paid on time are also more engaged, which has proven to increase employee productivity.
 
“When staff are paid the right amount on time every month, they are happy. Happy employees are more productive, which makes companies more profitable. Professional payroll services essentially lead to higher customer metrics, lower absenteeism, and a lower turnover of staff,” Lavine Haripersad, an executive at the South African Payroll Association (SAPA) points out.
 
SAPA 2018 Conference
To talk more on this cardinal role of payroll professionals, experts and thought leaders in the industry will be presenting at SAPA’s upcoming annual conference. The conference is set to take place across three South African cities. The Johannesburg leg will take place on 10 – 11 September, then the event moves to Cape Town on 13 September and Durban on 14 September.
 
“We have an exciting list of speakers presenting at this year’s conference. Two of the presentations will be dedicated to international payroll, which is a hot topic among payroll professionals this year. Winners of the 2018 SAPA Awards will also be announced on 10 September at the Johannesburg leg of the conference,” says Haripersad.
 
Dumisa Sihawu, Senior Tax Manager at Deloitte, will be discussing what payroll professionals need to know about expatriate payroll; Kelly-Anne Joubert, Payroll Manager at Ericsson Sub Saharan Africa, will be discussing the future of payroll professionals; Rob Bothma, Master Principal Consultant at Oracle, will explore the impact that Artificial Intelligence will have on Human Capital Management and payroll; and Eldert Bongers, Product Manager at Sage, will look at the latest technology in the industry, among other noteworthy speakers.
 
Representatives from financial institutions such as FFG and Old Mutual will also cover topics such as advanced retirement planning and how the pinch in payroll departments can be reduced.
 
“For this year’s conference theme, SAPA’s executive committee came up with the theme ‘Power’ due to the great responsibility and influence that payroll professionals have. Not only does an effective payroll department ensure that staff are paid on time, but it has the power to reshape the experience that staff has with the company,” says Haripersad.
 
Celebrating National Payroll Week 2018
This year, National Payroll Week falls on the same dates as the SAPA conference and it was established to raise the profile and awareness of payroll and help demonstrate the impact that payroll has on the economy.
 
“In many companies, payroll is seen as a back-office support service. During National Payroll Week, we aim to celebrate and highlight how payroll professionals benefit the companies where they work or the clients they service,” says Haripersad.
 
From strategic decision making to monthly rewards and remunerations, organisations rely on their payroll staff for myriad services.
 
“SAPA is encouraging all payroll professionals to put the spotlight on the value they add to their businesses. Not only does the service these professionals offering help companies find new growth opportunities and boost employee morale, but they also work tirelessly to ensure that the companies they work for comply with all the relevant legislation. During this week, I hope our members can pause to think about the important work payroll professionals do each month to make payday a buzzing day,” concludes Haripersad.
 
To attend SAPA’s annual conference, please click here: http://www.sapayroll.co.za/Events/Conference.aspx and view the programme here: http://www.sapayroll.co.za/Events/Conference.aspx#8260426-programme
 
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 increase in industrial action over the past two years has heavily stressed the need for a well-defined and well-understood remuneration policy in the event of a strike.
 
According to the Department of Labour’s Industrial Action report, workers involved in strike action during 2017 lost R251 million in wages compared to R161 million in 2016. This represents an increase of almost 56%.
 
The number of workers involved in strike action increase by almost 39% from 2016 to last year. According to the report strike action increased by 8% over the last two years and is the highest since the department started monitoring strike action.
 
The Labour Relations Act allows for the “No work, No pay Principle”, however it is not as simple as the mere loss of wages for the time employees are not at work. SAPA executive Lavine Haripersad says a company’s policy or practice note must be quite specific and detailed around the payment or suspension of benefits during the strike period.
 
The Policy
The impact on benefits such as medical aid cover, pension contributions and risk cover are seldom considered when the “No work, No pay Principle” is applied. In terms of the act the employer is not obliged to pay the employee during the strike period.
 
This also applies to the payment made by the employer on behalf of the employee for certain benefits.
 
“If these payments are suspended during the strike, it means employees are not covered when they at their most vulnerable. They could be injured, or someone might even die and their families are left exposed.”
 
Other payroll considerations relate to the impact on leave and bonus payments when employees participate in industrial action. Haripersad says a bonus payment will have to be made pro rata to adjust for the days the employee was on strike.
 
It is also general practice that there will be no leave accrual during the time workers are on strike. According to the Department of Labour’s 2017 Industrial Action report most strikes lasted around 11 working days, which translates into around half of the month’s possible leave accrual.
 
The Agreement
If there is an agreement between the union and the employer that the payment of benefits will continue during a strike, it is important that the policy states clearly how the money will be recouped at a later stage from employees.
 
Statutory payments will take precedence – this includes Pay-As-You-Earn (PAYE) and contributions to the Unemployment Insurance Fund (UIF). During strike actions the Human Resource Director and Executive Management are focused on the strike and in trying to ensure that the business is not affected negatively.
 
There is then little time to consider payroll issues. If there is a clear and well-understood policy and agreement, it is one thing less to worry about.
 
The System  
Most companies will have a system which can accommodate the calculations of pro-rata payroll and alignment to the policy to manage the impact of industrial action.
 
It is critical to keep accurate time records to know when the employee was absent from work to ensure that payroll is adjusted accordingly. Employers are legally required to keep these records during strike periods.
 
Another issue is when the strike continues from one tax year into the next and the adjustment of payroll. In some instances, it may be necessary to go back to the previous tax year and adjust payroll to ensure that the tax records reflect correctly, notes Haripersad.
 
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 challenges that small businesses in South Africa face are unique and often complex. South African Payroll Association (SAPA) Executive, Arlene Leggat, says there are several things that small business owners should keep in mind regarding their payroll system, and their obligations to ensure they comply with the law, and set their businesses up for success as they grow and expand.
 
“Many times, a small business’ payroll evolves organically. When a company starts out, its payroll may consist of just a handful of employees. Only after the first person resigns or an employee gets dismissed do problematic pitfalls in a small and haphazard payroll system lead to major problems,” says Leggat.
 
Responsibility towards employees and SARS
A small business needs to register their business with SARS and all the relevant legislative bodies even if it is not yet paying tax. It may seem more efficient to simply pay employees from the company’s bank account without having to deal with all the administration involved with printing pay slips and deducting UIF, but this approach can lead to run-ins with the law.
 
“All employees are required by law to receive a payslip, and to contribute to UIF. This may be an onerous task that seems unnecessary in the beginning, but if a dismissed, retrenched or disgruntled employee tries to claim UIF and can’t, there are serious repercussions for the business owner. Business owners who neglect to do this can be served with penalties and fines,” says Leggat.
 
Small business owners also need to make sure that whatever deductions are made to employees’ salaries are paid over to SARS. It can happen that a new or growing company runs into cashflow issues and neglects to pay the tax that has been deducted from workers to the revenue authority.
 
“Ignorance will not protect you against the law and neglecting to pay an employee’s tax to SARS constitutes fraudulent activity,” says Leggat.
 
When to consider outsourcing
While she doesn’t believe that outsourcing payroll and accounting duties is a sustainable solution for all businesses, Leggat believes it does make sense for many small companies who are either just starting out or growing.
 
“If your business is still new, then outsourcing your payroll needs to an accredited and experienced professional is advisable. This way, you have the peace of mind that comes with knowing someone is dealing with the authorities on your behalf, making sure your employees’ tax certificates are completed and submitted on time, and that a knowledgeable person is staying on top of everything for you,” says Leggat.
 
Instead of entrusting your payroll to a friend or acquaintance who only has limited knowledge of payroll systems and accounting, rather enlist in a course to upskill yourself on what your responsibilities are as a new business owner.
 
“There are many one-day courses offered by government institutions that are aimed at empowering entrepreneurs with the knowledge they need to set up their businesses and comply with South African legislation. Payroll and accounting may not be your core competencies, but your business is your responsibility and you need to be driving your payroll strategy correctly from the very beginning,” concludes Leggat.
 
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