Tag Archive: PAYE


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.

All designated employers who employ 50 or more employees or whose turnover value exceeds the annual thresholds must submit Employment Equity reports this year.

Employers may deliver printed reports to their nearestLabour Centre before 01 October 2013. Manual submissions may not be emailed, faxed or sent via regular post.

Employers who choose to submit electronically will not only enjoy the convenience of capturing and submitting the EEA2 and EEA4 forms online but they will also have until 15 January 2014 to make sure their Employment Equity reports for 2013 are submitted.

The purpose of the Employemnet Equity Act is to Advance Economic Development, Social Justice, maintain peace and the democratisation of the workplace by fulfiling the primary objectives which are promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination. In addition the Employment Equity Act is  implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups to ensure their equitable representation in all occupational categories and levels in the workforce.

Philip Meyer, technology director at Sage Pastel Payroll & HR says that it makes sense to submit online. “Employers should rather opt to register online at www.labour.gov.za to ensure they have enough time to prepare and submit their annual Employment Equity reports. Online users have the luxury of capturing information and saving their data online until the report is complete and ready to submit.”

Meyer adds that the EEA2 and EEA4 forms have to be submitted together or the Department of Labour will reject and return the submission. Employers who cannot submit their Employment Equity reports must let the Department know in writing. Employers who make use of payroll and HR software solutions should find it easy to complete the annual Employment Equity reports. Technology allows companies to capture data once and only tweak employee data and numerical goal plans when changes occur. They can also generate the EEA2 and EEA4 returns in the correct format with the correct information already collated and categorised.

Once submitted, the forms cannot be changed or amended in any way but guidance on how to complete the forms correctly is available on the Department of Labour website, according to Meyer.

Copies of the forms have to be retained for company records and to present to Department of Labour inspectors should they visit the company to check on compliance.

To read more about designated employers, go to http://www.southafrica.info/services/rights/employmentequity.htm

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

 

All RSA companies are required to submit their SARS interim PAYE reconciliation that is due from 01 September – 31 October 2013, including their employee tax certificates and EMP501 reconciliations for the period 01 March to 31 August 2013.

Employers also need to ensure they make use of the latest SARS e@syFile software release, which they can download from the SARS website, www.sars.gov.za. Without downloading the software companies will not be able to successfully submit their interim PAYE reconciliations and transfer the data electronically to SARS.

Philip Meyer, technology director at Sage Pastel Payroll & HR, says legislation dictates that each and every employee in a company must be registered on the SARS database with their own tax number. Therefore individual income tax reference numbers must be reflected in the SARS interim PAYE reconciliation. If one or more tax certificates do not include the tax reference number, companies will receive an error notification in e@syFile and will be penalized.

Companies using an automated payroll software solution can obtain employee tax reference numbers via bulk ITREG functionality and the e@syFile Employer system to simplify the reconciliation.

Another important requirement for companies is to comply with new legislation pertaining to employees making use of company vehicles leased by their employer. Meyer says the fringe benefit value is the rental contract plus the fuel cost for the month. However, the rental contract must be classified as an operating lease.

“New source codes were also introduced in the event that the employer pays a lump sum to the family of a deceased employee. The first R300 000 of the lump sum is tax free but the portion exceeding R300 000 is taxed by way of a SARS directive and the lump sum must be reported against code 3922 and the PAYE on the lump sum must be allocated to code 4115.

Meyer adds that companies can receive step-by-step assistance from a SARS Contact Centre agent through the SARS Help-You-eFile, a service innovation introduced by SARS to give companies access to SARS contact centre agents online.

“Use of a reputable payroll software system will result in a smooth interim PAYE reconciliation, as the software will automate the reconciliation process for the company. Some payroll solutions require only that users load their employees’ information and payslips. Therefore no manual calculations are required so that companies simply upload the file to e@syFile.”

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

The bi-annual company tax return season opens on 1 September 2013 and it makes sense for companies to prepare their mandatory information in August to avoid SARS e@syFile rejections and late submission penalties.

All South African companies are required to reconcile and submit PAYE, UIF, SDL contributions for the period of 01 September 2013 – 31 October 2013.

“Companies have about four weeks to prepare their submission information and update their payroll systems before performing their last payroll run in August,” says Philip Meyer, technology director at Sage Pastel Payroll & HR.

“It is critical for companies to ensure that they download and install the latest version of SARS e@syFile before reconciling.  Companies are advised to backup their current information on their computers prior to installing a new version of e@syFile Employer, as the installation may delete the current information.

Another important requirement for companies is to comply with new legislation pertaining to employees making use of company vehicles leased by their employer. Meyer says the fringe benefit value is the rental contract plus the fuel cost for the month. However, the rental contract must be classified as an operating lease.

Income tax reference numbers are another important element in returns. Companies can only submit tax certificates to SARS if each employee has an income tax reference number. Submissions in which one or more tax certificates do not have the mandatory individual income tax reference number specified will not be accepted by SARS.

Companies using an automated payroll software solution can obtain employee tax reference numbers via the bulk ITREG functionality and the e@syFile Employer system to simplify the reconciliation.

Attention should also be paid to new source codes in the event that the employer pays a lump sum to the family of a deceased employee. The first R300 000 of the lump sum is tax free but the portion exceeding R300 000 is taxed  by way of a SARS directive and the lump sum must be reported against code 3922 and the PAYE on the lump sum must be allocated to code 4115.

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

Softline Pastel, South Africa’s leading developer of business and accounting software, today launched a portal for its range of online applications. The platform, known as Sage Pastel Online, provides the entrepreneur on-the-go one central location to access the company’s bouquet of cloud-based business tools, making running a small business a little easier.

Pastel Accounting launched South Africa’s first online accounting program, My Business Online, in May 2009 and since then has brought several online innovations to the local SME market.

“Times have changed,” says Steven Cohen, managing director of Pastel Accounting. “We have entered an age where technology is pervasive, allowing us more mobility than ever – and business has to be part of the revolution to remain competitive.”

The portal can be found at www.sagepastelonline.com and offers online accounting, payroll and marketing services – allowing business owners the freedom to run their businesses at any time from anywhere. Additionally, Pastel’s BEE one-stop-information-hub, BEE123 and brand new free-to-all-users personal finance applications are also available in the same location.

Pastel My Business Online is a full-function accounting program, designed specifically for the small business owner. All accounting lingo has been changed to simple English, so even the layman can manage the business’s books. It’s a multi-user system with dashboards, graphs and drill-downs to source transactions that provide a bird’s eye view of the business. The system allows users to manage customers, suppliers and inventory items and keeps track of sales and purchases. It comes with a comprehensive list of reports so that month-end management packs are quick and easy to create.

Pastel My Payroll Online is a simple payroll solution that allows SME owners to pay their employees anywhere, anytime.  It’s a SARS compliant system aligned to even the most complex legislation, including PAYE and UIF. Users can also process leave online with leave types already defined according to the BCEA requirements. Like, My Business, My Payroll contains no confusing jargon.

Did you know 70% of SMEs don’t have a website, or at least one with limited marketing capabilities or integration with smartphones and social media. Pastel My Webspace is an online marketing engine for SMEs with an HTML5 website builder designed for optimal marketing and e-commerce capabilities. In addition My Brand will manage users’ search engine optimisation, and mobile and social media integration. My Brand effectively integrates everything for the user and provides an all-in-one e-marketing service with analytics, social media insights, and creating and mailing a fully dynamic newsletter with marketing feedback.

“Moving your business applications online is a must for anyone who wants to ensure that they remain at the cutting edge of service delivery,” said Cohen at the launch event that celebrated the mobile business of the future.

As part of Pastel’s drive for business mobility, it has also formed a relationship with Samsung Enterprise Mobility. Selected Samsung devices will now come preloaded with the My Business Online Android app and Pastel is a reseller of Samsung’s SIII, Note and Tablet devices; all preloaded with a year’s free access to Pastel My Business Online. The devices will be available for purchase via the Pastel Webstore.

The submission for manual tax returns has now passed. The deadlines for efiling submissions is the 23rd of November 2012 and in this post we’ll be exploring why it is sometimes necessary to seek out professional advice with your tax return.

There are many examples of incorrect tax returns which have ended in large sums of money being owed to the South African Revenue Service, and even court proceedings.  A recent article on the Moneyweb news website states that in one such case, the tax court in Pretoria had to consider an objection by a tax paying company against assessments issues by a SARS auditor. Of course, SARS had issued this assessment based on the tax return submitted by the company and their accompanying financial statements.

Despite many arguments from the company on if they were suitably qualified to be submitting tax returns on behalf of the business, and other issues, SARS won the case. The court ultimately found that the company had underpaid tax on several fronts and was now liable to pay the outstanding tax as well as the interest on the aforementioned amount.

This is just further proof as to why businesses, large and small, should seek the assistance of professional tax consultants when it comes to that time of the year. The help of a professional might cost far less that the penalties involved in an incorrect tax return.

SARS - SME companies should brace themselves for the interim PAYE reconciliation that is due from 01 September 2012 to 31 October 2012. Employers are required to fully reconcile and submit their employee tax certificates and EMP501 reconciliation for the period 01 March to 31 August 2012, by the end of October 2012.

Employers need to make use of the new SARS e@syFile software release, e@syFile V 6.1.0. to successfully submit their interim PAYE reconciliations. If they don’t, they will not be able to transfer their data electronically as the new software release will not recognise the old format.

“Companies have no choice,” says Philip Meyer, technology director of payroll and HR software developer Softline Pastel Payroll, part of the Softline Group and Sage Group plc.

Legislation dictates that each and every employee in a company must be registered on the SARS database with their own tax number. Therefore individual income tax reference numbers must be reflected in the interim PAYE reconciliation. If one or more tax certificates do not include the tax reference number, companies will receive an error notification in e@syFile and with effect from 01 September 2012 companies will be penalised.

“New legislation that took effect in March this year means that medical aid contributions are no longer allowed as a tax deduction for employees under the age of 65. The medical aid capped amounts have also been replaced with Medical Aid tax credits. If companies did not make use of the medical aid tax credit method, their submission will be rejected and they will be required to manually recapture the details on e@syFile”, adds Meyer.

A new IT3(a) reason code for tax certificates has been introduced by SARS for non-deduction of PAYE  and must be applied on interim tax certificates. Code 08 will indicate a zero PAYE liability due to medical aid tax credits applied. There are also new source codes for fringe benefits and tax deductions that must be applied to interim tax certificates, replacing the consolidated values SARS required prior to the 2012 tax year. Most automated payroll software systems already cater for these codes.

Companies can receive step-by-step assistance from a SARS Contact Centre agent with Help-You-eFile. Help-You-eFile is a new service innovation from SARS which gives companies access to SARS Contact Centre agents online.

For a smooth interim PAYE reconciliation, opt for a reputable payroll software solution that can automate the reconciliation process for the company. Some automated payroll software providers require that users only load their employees’ information and payslips. Therefore no manual calculations are requires and companies can simply upload the file to e@syFile.

For further assistance with the interim PAYE reconciliation season, companies can attend the SARS interim submissions seminar, hosted by Softline Pastel Payroll.  Make contact on +27 11 304 4390 or go to seminars@pastel.co.za