Quality Payroll Services

Payroll Processing

 

The prime purpose of processing a payroll is to ensure that employees are paid accurately, on time every time.

 

Simple? Not so – even if you employ only one employee – you now have a payroll function added to the many other things that are required to run a successful business.

 

The Payroll function in any business is no longer just a matter of paying an amount into an employee’s bank account at the end of each pay period. Employers now have a host of functions associated with the paying of employees, ensuring compliance with;

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• SARS – Payment of PAYE, SDL & UIF on a monthly basis

• SARS August & Tax Year End submissions and balancing

• Issuing of Tax Certificates (IRP5’s and IT3a’s)

• Department of Labour for UIF – monthly electronic update regarding staff

• Depart of Labour for COIDA (Compensation of Injuries & Diseases Act) – Annual Return

• Employment Equity requirements – storing of information for this application

• Workskills Plan – storing of training details for this return

• SA Statistics – should a company get selected to complete this return, then quarterly returns are required detailing staff headcounts, salaries, overtime etc.

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In addition to the above statutory information – the following information is also required:

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• Payment of 3rd Parties e.g. Medical Aid & Retirement Funds (Pension or Provident Funds) and supplying of supporting documentation

• Paying across Garnishee payments and maintenance of the balances

• Keeping accurate leave records – unrecorded leave can cost a company plenty!

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All of the above erode into time required to run a core business – let us at QPS do our core business – Your Payroll!

 

Payroll Processing is Simplified with Payroll Outsourcing

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Payroll processing in growing companies can be a bit troublesome for employers. More employees mean that more work is involved in administering human resource functions. Payroll outsourcing is the solution to this problem, and can even benefit a company financially.

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The Benefits of Payroll Outsourcing Payroll processing refers to the processing of weekly or monthly payrolls to ensure that employees get paid on time, and the amount they are due. It might sound like an easy enough job, until you look a bit closer. Below are some of the most common frustrations of employers, and the accompanying benefits associated with payroll outsourcing:

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Payroll processing takes a lot of time. Payroll outsourcing provides the benefit of saving time. No longer does the employer have to take a day or two to go through all the timesheets, calculate and verify what every employee is due. All these time consuming functions are performed by the outsourcing company, thus freeing the business owner, and increasing the overall productivity of the business.

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Tax matters during payroll processing are complicated. Payroll outsourcing provides employers with the benefit of taking care of all taxation issues during each pay run. Staff members of payroll processing companies are up to date with regards to the newest regulations from the South African Revenue service, and can ensure that all necessary taxes are paid correctly right down to the last cent.

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Dealing with SARS is time consuming and complex. A related benefit of payroll outsourcing is that the payroll processing company relies on close contacts with individuals with the South African revenue service to facilitate the speedy and efficient resolution of any tax related matters. This further frees up the employer (and other staff), thereby enabling the company to be more productive.

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Business payroll processing is unique to the business. The payroll processing company is all too well aware that each company, like its employees, are unique. As such their solutions are tailor-made to accommodate the nuances associated with each company’s corporate structure and employees. This ensures that the pay run occurs smoothly, efficiently and punctually each and every month.

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To ease the minds of security conscious employers, payroll processing by a payroll processing company is usually done in strict confidentiality and with rigorous security measures in place. The only thing you might have to spend a little time on is to find a payroll outsourcing company that you can rely on, and that will assist you without fail for years to come.

 

COIDA Returns

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The COIDA return is done each year at the end of February. Each industry is given a percentage that has to be calculated on employee earnings.

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Earnings to be included in the Return are:

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• Regular Overtime.

• Bonuses of a regular nature e.g. (Annual Bonus)

• Commission of a regular nature.

• The cash value of food and quarters provided to employees as part of their remuneration package.

• Cash value of fringe benefits – company car, accommodation, reduced rates etc.

• Earnings / Drawings paid to working Directors of a Company or Members of a Close Corporation

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When completing the return the following information is required by month;

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• Actual earnings for the month, head count (Directors & Members in separate column).

• Project earnings and head count for the coming year.

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The return has to be completed and returned to The Compensation Commissioner by 31 March each year.

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Payroll Administration

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Quality Payroll Services will administer and maintain your payroll function, we will:

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• Set up the company, create all the required profiles, infotypes and parameters pertaining to the company.  Capture all company information on the system.

• Capture all employees into the payroll system.

• Test the payroll and run parallel runs and compare with your existing payroll.

• Process monthly, fortnightly & weekly payrolls

• Capture all payroll changes e.g. Leave, Sick, Provident Fund, Overtime, loans etc.

• Print Paysheets on A4 paper or pre printed stationery.

• Electronic Payment of Nett payments into employee bank accounts

• Electronic Payment of all third party payments and providing third parties with documentation relating to the payment.

• Submission of EMP201 & Payment thereof

• Management of loans and maintenance of the outstanding balances

• Provide client with electronic reports i.e. variance report – showing differences between the current and previous pay period, listing of all earnings & deductions, Medical Aid and Retirement fund reports, Unions, SARS etc. ( available to be e-mailed)

• Maintain all leave, Sick and Absence records.

• Handling all payroll queries for staff and management

• Balance and submission of August & Tax Year end certificates to SARS

• Create Tax Certificates for employees at tax year end.

• Monthly Electronic submission of UIF records to Department of labour

• Creation of electronic GL to interface with most accounting packages

• Industrial Council Reports

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Just give us the information and we will process your payroll.

 

Payslips

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A Payslip is a record detailing the remuneration given to an employee at the end of each pay period.

Ideally a payslip should reflect the following information:

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• Company Name and Details

• Employee Name and Clock Number

• ID Number

• Tax Number

• The Tax Period Worked i.e. August would be period 6

• The Pay Date

• The Cost Centre (Optional)

• The Pay Point (Optional)

• Bank Account details

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Other non-compulsory details:

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• Employee Address

• UIF Number

• SARS – PAYE Number

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Payslips should be divided into 5 sections:

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• Earnings

• Contractual Deductions

• Voluntary Deductions

• Company Contributions

• Year to Date Figures

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Earnings: These will be made up of earnings due to the employee i.e. Basic Salary, Overtime, Travel Allowance, Reimbursive Travel, Shift Allowances, and Standby Allowances.

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Contractual Deductions: are deductions that have been agreed to as per the letter of appointment, these include Medical Aid & Retirement Fund Deductions, PAYE, UIF

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Voluntary Deductions: these are deductions that an employee has agreed to and given signed permission to the company to deduct. These include Canteen Deductions, Union Subscriptions, Loans, Advances.

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Company Contributions: These are contributions that form part of the employee’s fringe benefits e.g. Company Contribution to a Retirement Fund, Company contribution to Medical Aid etc.

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Year to Date Figures: A total of the individual elements either earnings or deductions for the current Tax Year. At the end of the Tax Year, the figures on the final payslip will tie up with the figures on the Tax Certificate.

 

Payroll Audits

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It is vital that the payroll is correctly checked and signed off by a responsible person each month.

The following information should be checked:

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• The opening Head Count at the beginning of a month

• The closing head count at the month end – After payroll has been processed. – to ensure that no ghost employees are on the payroll

• Any new engagements – check the documentation for start date, salary, correct leave allocations, if an employee starts after the start of the month, check pro-rata salary.

• Discharges – check termination date, that leave has been correctly paid out and that the number of days paid out are correct.

• Check all other payroll changes – process an audit trail of all changes and ensure that there is documentation for all changes.

• Check bank account changes – must have written, stamped and signed confirmation from the bank

 

Once all changes have been checked, sign audit trail and date.

An excellent report to process and keep with the audit reports is a variance report – this will advise of any variances from the previous month, and any variances need to be explained and signed off

Quality Payroll Services offer a service to audit payrolls and give detailed audits

 

Annual Leave and Sick Leave

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Leave is money – strict control should be maintained of all leave records.

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Quality Payroll Services will manage your leave, entering all leave taken and accruing monthly leave entitlements.

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Leave Provision: – this is the leave movement for the month. On 15 days leave per annum, an employee will accrue 1.25 days per month. The leave provision for the month is 1.25 multiplied by and employee’s daily rate of pay. (As per BCEA – the leave is calculated on basic salary, any permanent allowance, Overtime & Commission over the last 13 weeks and company contributions to Medical Aid or Retirement Fund).

 

Leave Liability: This is the actual value of the leave for an employee. For example if an employee has 10 days leave – then the leave liability is the value of the daily rate of pay multiplied by the 10 days leave.

 

Failure to maintain leave records could cost an employer dearly

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Sick Leave: A five day worker is entitled to 30 days over a three year cycle and a six day worker is entitled to 36 days over a three year period.

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The following leave types do not alter the leave balances but a control needs to be kept.

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Family Responsibility Leave – only for death of spouse, child, grandparents, adoptive parents, parent, siblings – ill health of a child that is fully dependant on the employee

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Sports Leave – 2 days provincial (must have confirmation from the necessary sporting body) – 3 days for National (must have confirmation from the necessary sporting body)

 

Study Leave – has to be in the field of work

 

Union Leave

 

Unpaid leave – this will impact on the salary and records of the days need to be kept.

 

Quality Payroll Services will take the hassle out of the SARS August & February Tax Year End Submissions. We will ensure that your new employees (i.e. new to the job market) are registered with SARS and will get their Tax Numbers.

We will balance the August & Tax Year End Submissions against the payments made and ensure that your submission is uploaded to SARS.

 

UIF - Unemployment Insurance Fund

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UIF or Unemployment Insurance Fund payments are compulsory for all employees, even domestic workers who were incorporated into this scheme from April 2003.

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UIF is calculated on the Taxable earnings of an employee.

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Commission earnings do not attract UIF – if a salesman earns a basic salary plus commission, he will then only pay the UIF on the basic salary.

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UIF cannot be claimed on a monthly pension or a disability grant from the state.

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If a contributor resigns from a position – UIF will not be paid (unless it is constructive dismissal)

 

UIF benefits include:

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• Illness

• Maternity

• Adoption

• Dependants

• Unemployment

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At present the earnings limit is R14,872 (effective 1 October 2012) – the employee pays 1% and the employer 1% – anyone earning above the limit will only pay the maximum of R148.72 ( and the employer pays R148.72)

 

Employment Equity Returns

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As part of our payroll service to our clients, we will ensure that you have all the information required to complete the Employment Equity Returns each year.

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Companies with less than 50 employees do not have to report for Employment Equity unless their turnover is over exceeds or equals the amounts in Schedule 4 of the EEA – or who has been declared a designated employer in terms of a collective agreement