Archive for December, 2013

Some of the major challenges facing small to medium enterprises (SMEs) in South Africa are limited sales, access to finance, managing cashflow and competition from large businesses.

Laurica Kok, general manager of Sage Pastel Payroll and HR, says the business arena is increasingly going mobile with Cloud computing and big data both structured and unstructured. This is driving payroll and HR industries to provide affordable and online solutions as well as self service and connected services offerings to businesses and business partners alike.

“Users will buy if they are given what they need. As business increasingly embraces mobile technology we endeavour to stimulate our business partners and their vendors to change their mindset and meet the mobility challenge head-on. Mobile solutions are in demand in the South African market.”

Kok adds that mobility, affordability and accessibility any time anywhere for business-to-business or business–to-consumer are the future and futurist applications are the way to make your personal and business life easy.

Connected Services enables SME companies to extend their desktop payroll with an online solution that eases the growing burden of HR managers and payroll administrators.

The solution includes a web-based self-service tool that enables employees to manage and maintain their own information online, thereby carrying some of the overall HR administration responsibility. They are able to make online applications for leave, loans, bursaries, travel claims, view their payslips and update personal information no matter where they are so long as they have an internet or smartphone connection.

At the click of a button the online applications of employees can be updated to the desktop application, providing a beneficial application for employees and business owners, payroll administrators and HR managers.

With connected services, the payroll desktop solution provides users with the best of both worlds (desktop and online), by making use of frictionless automated update technology. Frictionless updates enable traditional desktop applications to seamlessly update over the internet with minimal intervention from the end-user. Businesses no longer need to download and install updates from a website or use CD versions to manually update their software. The software now does it all for them, directly from their payroll software – as long as businesses have an active internet connection.

Another component of connected services is RSS Feeds. Payroll administrators, HR managers, business owners and business partners can view RSS Feeds directly on their desktop payroll system. This allows the business to receive information, notifying it of legislative and tax changes as well as new system software releases, ensuring the business stays on the right side of the law.

Sumay Dippenaar, marketing manager at Sage Pastel Payroll & HR, said a company’s logo is no longer its brand. “According to futurist Pieter Geldenhuys, customers and employees are the brand. It is all about credible recommendations. Consumers know an advertising message may not be accurate and is purely aimed at encouraging people to buy a product. Traditional media are likely to be seen as less credible advertising mediums. In a recent survey only 3% of respondents said the advertising message is seen as very accurate.”

It is important that business partners build their personal brand and use it as a vehicle to generate more sales. An affordable marketing discipline to build a business partner’s personal brand is public relations, complemented by general online visibility such as suitable social media platforms, to name but a few.”

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The Employment Tax Incentive (ETI) initiative devised by the Minister of Finance as part of the Wage Subsidy proposed in 2010, is being promulgated and will become effective from 1 January 2014.

Developed with the objective of increasing employment for young people aged 18 to 29 years, the legislation will allow employers to claim a rebate on their PAYE liability provided their PAYE accounts with SARS are up to date.

Philip Meyer, technology director of payroll and HR software specialist Sage Pastel Payroll & HR says the ETI claim will be based on the remuneration of employees aged between 18 and 29 who were appointed on 1 October 2013 or later nd have a legitimate SA ID number or asylum seekers permit.

The calculation of the ETI claim may only be applied to a monthly salary or wage that is in line with the specific industry’s prescribed minimum wage rates.

“If the industry has no formal set minimum wage, then the qualifying employee needs to earn a minimum of R2 000 a month to be considered for the rebate calculation.

The incentive is calculated at a higher rate for the first 12 months after an employee qualifies. The maximum amount companies may claim per employee is R1 000 for each of the first 12 months,” said Meyer.

During the second 12 month period, the maximum claim is halved to R500 per month.

“However, an ETI claim based on remuneration exceeding R6 000 a month will have a zero incentive value.”

The first phase of the Employment Tax Incentive initiative will require employers to submit their first claims with their January PAYE return which is due on 7 February 2014.

To simplify the requirements and calculate an accurate claim, employers should approach the legislation as a 4 step process:

• The first step is to determine whether the employer is eligible to claim the incentive for the current month.
• Secondly, determine which employees qualify to be included in the claim.
• Step three is to calculate the amount to be claimed against PAYE for the month.
• The final step is to submit the ETI claim as part of the monthly PAYE return.

The amount of administration that is required for substantiating an ETI claim will place an additional burden on payroll administrators as SARS will require more detailed information if they decide to query your calculations prior to allowing your claim. It therefore makes sense to make use of automated solutions to apply the correct calculations and generate the required reports in the format SARS prescribes.

Employers must make use of the opportunity to benefit from the Employment Tax Incentive as the legislation is set to expire on 31 December 2016.”

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn. To read more about the Employment Tax Incentive Bill Seminar, click here.