A 13th cheque works like a bonus that rewards employees for their hard work. Many companies use it to say “thank you” at the end of the year.
A 13th cheque equals one extra month of pay. Most businesses give it in December, but some pay it on each employee’s work anniversary. The important part is that the company clearly includes it in the employment contract or policy.
When the contract mentions it, the company must pay it. If it doesn’t, the company can choose to offer it or not. Always check every contract and policy early so everyone knows what to expect. Clear information prevents confusion and keeps trust strong.
Payroll system setup for bonus processing
Once you know who qualifies, set up the 13th cheque in your payroll system right away. Careful setup keeps your records clean and your team happy.
First, update your payroll software so it runs smoothly. Then, create a new earning type called “13th cheque” or “bonus.” Keeping it separate from normal salaries makes tracking simple.
Next, apply the correct tax settings. Because the 13th cheque counts as income, you need to calculate tax correctly under SARS rules. Test the calculation before payday to catch any mistakes.
Keep detailed records for every employee — who qualifies, how much they’ll earn, and when they’ll get paid. Good records save time during audits and help you spot problems early.
Finally, schedule payments early. A little planning now saves you stress later and makes payday smooth for everyone.
When and how to communicate with employees
Communication builds trust. Employees appreciate knowing when and how they’ll receive their bonus.
Send a friendly announcement before the payment date. Use an email, a meeting, or a staff notice. Explain who qualifies, when they’ll receive it, and how it appears on their payslips.
If your business can’t afford a 13th cheque this year, tell employees early. People value honesty. Being open keeps your team’s respect, even with tough news.
Also, remind employees about taxes. Explain that deductions might make the bonus smaller than expected. When everyone understands the process, you avoid confusion and build positive morale.
Aligning with employment contracts and policies
Before paying bonuses, check that your plan matches your company rules. This step ensures fairness and compliance.
Read every employment contract carefully. Confirm whether the 13th cheque is guaranteed or performance-based. Then, compare those details to your HR policy and fix anything that doesn’t match.
If your company doesn’t have a policy yet, write one now. Include who qualifies, how to calculate the amount, and when to pay it. Clear rules make life easier for both managers and employees.
Finally, ask your HR or legal team to review everything. They can confirm that your setup follows labour and tax laws. Getting this right now prevents legal issues later.
