Any registered South African company who has 1 employee or more, must subscribe to the many pieces of legislation which are applicable when a company becomes an employer. At the same point, it is critical for the company to ensure that they adhere to the rules and regulations which come into effect when paying their employees. Most of the pieces of legislation applicable to companies with employees, of which there are 10, are complex and must be properly understood and implemented to ensure compliance. Governed in most part by the Department of Employment and Labour in conjunction with South African Revenue Service (SARS), employers have a long list of items to comply with so as to avoid attaching the cost of fines, penalties and increased interest to their already tight budgets.
Managing a payroll is a cost which some employers may be tempted to circumvent in favour of self-administering. Employers who understand that this would be a risk to their business, value the services of outsourced payroll providers who can assist companies of all sizes with their employee and SARS payments and being a cost worth budgeting for. As well as the many legislative requirements and the various institutions which will require payment monthly, employers are subject to different applications of the law under certain circumstances.
Examples of this being those employers who fall under a collective bargaining structures; the industry in which the employer operates, which can dictate how the business must proceed; companies which do not fall under The Basic Conditions of Employment Act (BCEA) (being companies with employees who do not work more than 24 hours a month, Members of the South African National Defence Force, National Intelligence Agency and South African Secret Service and those unpaid volunteers who work for a charitable organisation. Knowing this type of information is important to employers because of the impact it can have on their business. It is the function of the payroll provider to know and understand your company and the industry in which you operate, so as to provide you with guidance which is legal and compliant.
The Basic Conditions of Employment Act (BCEA) stipulates that all employers must provide their employees with a written contract of employment. The contract must include certain employment conditions such as notice period, annual leave and pay rates.
Partnering with Pay Solutions will enable your business to run smoothly ensuring the correct levies and taxes are being paid and all statutory requirements needs are maintained. The list of daily, weekly and monthly functions linked to payroll, is a long one. Monthly declarations consist of Tax, Unemployment Insurance (UIF) and skills development levies which are paid through to SARS. These payments must be submitted by the 7th of each month and are tendered in conjunction with a completed employer declaration (EMP201). There are no exceptions or extensions allowed for the SARS deadline and any late submissions are liable to a fine of 10% of the total outstanding amount.
Outsourcing these functions provides employers with the peace of mind that their employees will be paid correctly and on time and that the company is protected from insuring any fines or penalties which are attached to being found non-compliant. All this as well as decades of experience of the staff at Pay Solutions, are some of the benefits which an employer can enjoy from Pay Solutions.