PAYE

PAYE – Who Should Register for PAYE in South Africa?

PAYE stands for Pay-As-You-Earn.

It is compulsory for all businesses that employ people and pay them a monthly salary to register for PAYE.

If any of the employees in the business earn more than the minimum threshold for PAYE taxpayers, then the business must adhere to the requirements for PAYE registrations.

What Is The Minimum Salary Threshold?

The minimum salary threshold is R91 250 if you are younger than 65 years.

If you are older than 65 years but below 75, the threshold is R141 250.

For those who are 75 years and older, the threshold is R157 900.

PAYE is calculated monthly and must be paid to SARS per month. Whether earnings are weekly or fortnightly.

How To Register For PAYE?

You can register for PAYE on the SARS eFiling website, or you can visit your nearest SARS branch.

However, should you have difficulty with your application, we offer PAYE registration services. Contact us to find out more.

What To Do After You Have Registered?

The business owner will need to deduct the appropriate UIF and PAYE amount off the employee’s salary, using the tax tables on SARS’s website.

UIF is calculated as 1% for the employer and 1% per employee. Therefore, a total of 2% per employee per month needs to be paid monthly.

The limit for UIF deduction’s is R297.44 per month.

If you do not earn above the threshold, then you do not need to be registered with SARS for PAYE. However, UIF must be paid over to the labour department if the employees work more than 24 hours per week.

What If PAYE Is Not Paid To SARS?

Unfortunately, if PAYE has not been paid over to SARS, the employee can be held liable even though it was the employer’s duty. And you will receive a 200% penalty. YIKES!

Therefore, we recommend outsourcing payroll services. Avoid the risk of incorrect payment amounts by hiring professionals in the industry. Thus, the IRP5’s generated and EMP501 reconciliations will be correct. 

(EMP501 is a report of all staff and their earnings. It is a requirement by SARS. EMP501 must be submitted twice a year before an IRP5 is issued.)

(IRP5 is an employee’s tax certificate that is issued at the end of financial. It details all related incomes, deductions, and taxes. Employees need IRP5 to complete their income tax return.)

We can assist with EMP501 and IRP5 submissions as well.

Contact Outsourcing Solutions today. We will assist you with Pay-As-You-Earn, UIF, EMP501, IRP5 and monthly submissions.

Tax Filing

Tax Filing Season 2022 – What All You Need To Know To File Your Tax For 2022

Tax filing season is here again! And we have put together some brief information that may be beneficial to you to know.

SARS has announced that taxpayers will be able to file their tax return as of 1 July 2022. The final day to submit your tax for 2022 is 24 October 2022.

The tax threshold for the 2023 year of assessment is:

  • R91,250 if you are younger than 65 years.
  • If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) is R141,250.
  • For taxpayers aged 75 years and older, this threshold is R157,900.

If you earn below these amounts, you are not liable to pay tax.

What Income Is Liable For Tax?

Herewith a breakdown of some of the different kinds of income that you can be taxed on:

  • Income From Employment (Salaries, Wages, Bonuses, Overtime, Taxable Benefits (Fringe Benefits) And Allowances)
  • Severance Benefits.
  • Certain Lump-Sum Benefits.
  • Income From a Business Or Trade.
  • Profits From an Individual Being A Beneficiary Of A Trust.
  • Fees From Companies or Close Corporations For Services Completed.
  • Investment Income (Interest, Foreign Dividends And Dividends From A Real Estate Investment Trust (REIT))
  • Rental Income.
  • Income From Royalties.
  • Annuities.
  • Pensions.
  • Certain Capital Gains.

Tax Filing – What Documents Are Required?

  • IRP5 Employee Tax Certificate.
  • IT3(B) And (C) Certificates From Financial Institutions In Respect Of Interest, Dividends And Capital Gains.
  • Retirement Annuity Fund or Pension Fund Contribution Certificate.
  • Medical Aid Certificate.
  • Travel Logbook (If Travel Allowance Was Received)

Can Outsourcing Solutions Help Me With My Tax Return?

Yes! We most definitely can. Contact us at info@outsol.co.za or vanessa@outsol.co.za and we will send you our tax submission fee.

Outsourcing Services

Outsourcing Services – The Future Of Outsourcing 

Outsourcing services has been a hot topic over the last few years. And it has every reason to be! Outsourced services has revolutionized how business operate. Especially since the COVID pandemic, business have had to act quick in order to adapt to the new world of living and working.

The industry of outsourcing has become a key business strategy for business of all shapes and sizes, globally.

Top 5 Advantages Of Outsourcing Services:

The advantages for outsourcing vary according to what service is in question. However, the benefits include the following:

  1. Cost Saving
  2. Increased Efficiency
  3. Increased Focus On Core Tasks In The Business
  4. Access To New Skills Or Resources
  5. Increased Flexibility To Meet Changing Business And Commercial Conditions

 Of course, there are always a list of cons when speaking of pros.

Risks Involved When Considering Outsourcing:

  • Risk Of Slower Turnaround Time
  • Lack Of Industry Knowledge
  • Cultural Barriers Or Differences
  • Lack Of Control

How To Select A Service Provider

This can be a difficult decision as no one outsourcing specialist is going to be an exact fit to your requirements. There will be trade-offs such as cost, limited services, slow turnaround time, closing hours etc.

Firstly, articulate what you want from the outsourcing provider in question. This is important to figure out before going ahead with any outsourcers. The company will most likely come in with their own ideas based on their own capabilities and strengths so be sure to outline what YOU require. This will assist you to make an informed decision and not leave you with unrealistic expectations.

Questions To Consider Asking Yourself Before Making A Final Decision Could Be:

  • Are you looking for expertise or more broad capabilities?
  • Do you want fixed costs, monthly rates, variable prices based on hours worked etc.
  • Is time saving more important to you than what the outsource provider will charge?
  • Will you require 24/7 365 support?

So, The Golden Question – Is There A Future For Outsourcing?

YES! Despite perceived negative aspects, outsourcing has only continued to grow. It has provided businesses with access to specialized skills and knowledge. Thus, saving businesses time and effort (and sometimes money), which can all be channeled into other more important areas of the business.

For more information on our payroll and business outsourcing services, email us at info@outsol.co.za or vanessa@outsol.co.za

Payslips

Why Are Payslips Important?

Payslips. First off, what is a payslip?
A payslip is an important employment document. It’s a document that breaks down an employee’s income and deductions. Additionally, it serves as proof of employment. 

Employee payslips are a legal requirement. In terms of Section 33 of the Basic Conditions of Employment Act, employers must provide their employees with the following information, in writing, when they are paid:

  1. The employer’s name and address;
  2. the employee’s name and occupation;
  3. payment period;
  4. the employee’s remuneration in money;
  5. the amount and purpose of any deduction made from the remuneration;
  6. the actual amount paid to the employee; and
  7. if relevant to the calculation of that employee’s remuneration-
    1. the employee’s rate of remuneration and overtime rate;
    2. the number of ordinary and overtime hours worked by the employee during the period for which the payment is made;
    3. the number of hours worked by the employee on a Sunday or public holiday during that period;
    4. if an agreement to average working time has been concluded in terms of section 12, the total number of ordinary and overtime hours worked by the employee in the period of averaging.

Employers often do not meet these basic requirements.

Payslip Distribution

Employees can receive their payslip in one of two ways:

  • Printed Payslips.
  • Secure email portal, or even SMS.

Employers must understand their employee’s requirements when it comes to payslips. Whether it is a basic payslip or detailed employee statement.

Keeping Your Payslips On Record

There is no need to keep payslips for any longer than 6 months. Many people prefer to keep them for longer, but it is not necessary. If you are applying for credit, financial institutions usually require 3 months’ worth of payslips.

Since many businesses now provide digitally secured payslips, it’s easier keep record of them.

However, payroll providers need to keep copies of payslips for three years from the end of the tax year.

Payslip Service

Outsourcing Solutions offers a range of professional, pre-printed payslip stationery for your business that is convenient and ready to use. Our payslips match the payslip templates available in Pastel Payroll. At a glance, your employees can see their gross and net pay amounts as well as total deductions, company contributions and fringe benefits.

For more information, get in touch with our expert team today – info@outsol.co.za

Payroll South Africa

Payroll in South Africa – Lets Talk Payroll

Payroll in South Africa is not processed the same as other countries. Each country is unique in their payroll systems, processes, deductions, and laws.

There’s a long list of requirements and submissions that a business must comply with in order to avoid penalties. Sadly, these penalties come from both SARS and the Department of Labour.

Some business owners believe that having a professional payroll process is only necessary if you employ multiple people. This is not the case at all. In fact, it is this very belief that gets business owners into trouble with SARS as they do not submit or pay the necessary fees. Even if you are a one man show at your own company, the legislation in terms of payroll in South Africa applies to you as well.

All Registered Businesses in South Africa Should Comply With PAYE, SDL and UIF Requirements.

We have put a list of FAQ revolving Payroll that we believe will be beneficial to you and your business:

Is PAYE and Income Tax the Same Thing?

No. PAYE is the name of the method of collecting income tax that applies to your earnings. Employees earnings are taxed directly from their pay. This is PAYE.
An employer is responsible for deducting and paying PAYE income tax on the employees’ behalf.

How Do You Do Payroll?

Payroll can be simplified by saying it is a list of employee payments. However, it also includes tax deductions, payment dates and more.

Additionally, the employer must offer their employees payslips each month. This must be part of your business payroll service.

Payroll also includes the calculation and the payment of PAYE and other contributions. Therefore, PAYE tax needs to be accurately deducted.

This is payroll simplified.

What Is The Best Way To Run Your Payroll?

There are a few ways you can do your payroll. You can either outsource payroll to a specialist, run it by hand, or use a specialized payroll software.

Outsourcing payroll to a specialists is the most expensive, least time-consuming method while learning how to do it yourself by hand is the least expensive but most time consuming.

What Is UIF?

UIF stands for Unemployment Insurance Fund. It provides short-term relief to employees and employers who may become unemployed or can no longer work.  All employees, as well as their employers must contribute to UIF.

The UIF contribution that employers must deduct from employees is 1% of their total earnings, excluding commission.

Can I Pay Employees By Cash?

Yes, it is not illegal. However, you might come under scrutiny if you do. Paying employees cash is associated with avoiding taxes and deductions. Therefore, we don’t advise it.

If you pay employees in cash, take out taxes and deductions before giving them their nett salay/wage. Additionally, keep accurate records and submit to your accountant and/or payroll provider immediately.

Contact Our Payroll Specialists in South Africa

Our team at Outsourcing Solutions not only handle your payroll processing and payroll administration. Additionally, we ensure your business is compliant with all South African laws, taxes and requirements. Furthermore, we:

  • Record employee lave (sick leave, annual leave, family leave etc.)
  • Automatically incorporate all legal revisions in your payroll system.
  • Provide payroll back ups.
  • SARS – EMP 201 submissions
  • Prepare electronic tax certificates
  • Employee payslips
  • IRP 5 and IT3 certificates
  • UIF Declaration and file submission
  • Tax Directives
  • Advice on PAYE matters

Let’s chat today and we will assist you with any questions or queries you have regarding payroll in South Africa.

info@outsol.co.zavanessa@outsol.co.za