In South Africa the employer-employee relationship is often strained due to a lack of clarity regarding rights and obligations. The Basic Conditions of Employment Act (BCEA) sets out minimum standards for working conditions and governs all aspects of the employment relationship. But navigating the complexities of the BCEA can be a challenge for both employers and employees. This often leads to misunderstandings and disputes.
Skillmaster’s HR Law series covers all Acts (including the BCEA) to empower you. From knowing ordinary hours of work to managing leave pay and sick leave policies, our course provides clarity and practical solutions.
Unsure about your rights when it comes to taking leave?
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Understanding the BCEA will help you manage leave entitlements and build a positive employer-employee relationship.
Unfair working conditions impacting your job satisfaction?
But how do you navigate the complex workplace laws?
Skillmaster’s HR Law series helps you understand all the Acts – including the Basic Conditions of Employment Act (BCEA), which addresses working conditions in South Africa.
Our BCEA module covers topics such as:
Ordinary hours of work
Annual Earnings Threshold
Temporary employment services.
Who would benefit from this course?
Those struggling to balance their workload within ordinary hours.
If you’re worried about meeting the Annual Earnings Threshold for fair pay.
Are you confused about your rights as a temporary employee?
Empower yourself with knowledge!
Contact Skillmaster today and enroll in our HR Law series.
Your first step to creating a more equitable workplace environment.
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The Annual EMP501 Reconciliation Submission period is from1 April 2024 – 31 May 2024.
Employers are required, twice a year, to reconcile their IRP5 / IT3(a) tax certificates; the EMP201/EMP501 statements; and the actual payments made to SARS, by using the e@syFile software provided by SARS. The February EMP501 reconciliation will reconcile the values for the entire tax year of 1 March 2023 – 29 February 2024 and will generate tax certificates for all employees on eFiling.
Please note that the Paymaster’s csv file is only compatible with e@syFile and not eFiling.
1 March is the day
From 1 March, you will be rolling over into the new tax year. Most payroll systems now “lock down the old tax year” and you can no longer change any of that information. So sort out any issues before the tax year-end. You really don’t want to start having to open the payroll to change earnings or deductions or add information once 7 March has come. Remind all your employees who have company cars or car allowances to record their mileage first thing on 1 March. Make sure all the details of the vehicle are recorded on the payroll. They will need to upload their log book or make sure that the logbook is complete for the tax year.
8 Steps to Complete the EMP501Submission
How to reconcile
Reconciliation involves matching all tax due (liabilities) with all tax paid and checking these against the total value of all tax certificates issued. These three (3) amounts should all be equal. The reconciliation process only relates to the tax paid and not additional tax, penalties or interest.
Reconciliation steps for employers:
Step 1
Before completing the EMP501 (for interim and annual submission), determine the total income of each employee for that year, and recalculate the tax based on that amount. IRP5/IT3(a) certificates should reflect the income, deductions and tax as calculated at this point.
Step 2
If the recalculated liability according to the tax certificates is different to the EMP201s previously declared, it will need to be determined in which month(s) these differences occurred.
Step 3
Capture all the relevant demographic information in the Business Information and Contact Details sections.
Step 4
Capture all the monthly liabilities for PAYE (before ETI deduction), SDL and UIF using these revised figures in the Financial Particulars section on the EMP501 (i.e. where different, the liabilities inserted on the EMP501 should be the final calculated liabilities rather than the liabilities declared on the EMP201).
Step 5
Capture the total monthly payments made in respect of PAYE, SDL and UIF but excluding payments made in respect of interest and additional tax. These are the actual payments made to SARS throughout the year – no recalculations are needed.
Step 6
Calculate the totals and difference fields (If using e@syFile™ Employer simply click on the self-assess button in order to populate all the totals and difference fields for you).
Step 7
Employers must calculate the SDL and UIF totals and capture the values. If the SDL and UIF contributions are not on the certificates this value must be calculated and completed.
Step 8
When settling any shortfall reflected in the reconciliation, the payment must be allocated to the period(s) in which the shortfall occurred. If the relevant period cannot be determined, the payment should be allocated to the last active period within the transaction, which is August (interim) and February (annual).
Make sure to check out our helpful EMP501 submission video guide to assist you throughout the reconciliation process and ensure a smooth tax year submission.
We can handle the entire submission process on your behalf
We simply will require the following from you :
A breakdown of all of your PAYE, SDL and UIF payments per month between March 2023 and February 2024
Contact Paymaster for expert help.
If this feels to overwhelming, consider joining the many happy Paymaster clients. Contact our Helpdeskfor additional information.
Compliance concerns? Fair Labour practices in your workplace? Facing workplace disputes, or struggling to navigate the dynamic legal landscape? Considering training to meet these challenges?
Skillmaster Online HR Law courses are tailored to address HR compliance, fair labour practices, employment contracts, basic conditions of employment, and handling CCMA disputes. They offer valuable insights and practical solutions.
The courses cover a range of topics crucial to ensure compliance with
employment laws and regulations
employment equity
discrimination
harassment
dismissal procedures
labor union rights
Our online courses offer flexibility, allowing participants to study at their own pace and schedule.
Demonstrate your commitment to ethical conduct, legal compliance and employee well-being by investing in online courses with Skillmaster.
STOP filing employee paper records – paymaster offers electronic filing!
Tired of sifting through stacks of paper to find an employee’s records?
Paper records go missing or get misplaced!
Eeek! Can you afford the risk of losing important employee information?
And inefficiencies in your HR department?
Struggling to keep track of leave balances, attendance records, or performance evaluations?
Worried about the security of your paper records?
Lost or stolen documents put sensitive employee information at risk.
With Paymaster’s system, you can keep all your essential and valuable employee-records online (safely and securely stored in the Cloud).
Paymaster’s automated online HR administration system streamlines record-keeping processes – allowing easy access and management of employee information anywhere, anytime!
Read our article to know what records to keep, when and in what format – Employee Record Keeping
Stay compliant and organized…keep all your employee records at your fingertips with Paymaster.
Still printing out paper payslips for your employees?
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You can download payslips from Paymaster
Administrators can automate payslip emailing every month
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Why should you consider a retirement annuity (RA) to prepare financially for retirement?
They offer:
Tax advantages
a Disciplined way to save enough to invest for growth
In Part 1 of this series we started exploring why Retirement Annuities are an excellent option to prepare you financially for retirement. We continue that here: Part 2…
Some complex details should be considered when investing through a retirement annuity.
6. Your over-contributions will roll over
Your tax-deductible premiums are limited to 27.5% of your taxable income per year (up to a maximum of R350 000).
But you may invest more since over-contributions towards your RA will be rolled over to the following year – where they can be used for tax deduction purposes in that year.
The advantage – these over-contributions will enjoy investment growth (even though the tax benefit will only be gained in the following year).
7. The funds in your RA are not subject to estate duty
Funds invested in an approved retirement fund (such as an RA) are not part of a deceased estate.
So its value is not taken into account when calculating estate duty.
RAs can be used effectively to reduce estate taxes.
8. Use your RA to reinvest your tax refund
Consider reinvesting the tax refunds you receive from Sars.
At the end of the tax year, you’ll need to submit your IT3 certificate to Sars as part of your e-filing, providing proof of the contributions made towards your RA in that tax year.
When you receive your tax refund from Sars, you can invest the money back into your RA as an ad hoc contribution, further boosting your retirement savings.
9. You can stop contributing to your RA – no penalties
A feature of LISP-based RAs is that they are transparent, flexible investments.
They allow investors to completely customise their contributions.
This means that you can choose to contribute monthly, quarterly, bi-annually or annually.
Plus the option of making ad hoc contributions when circumstances allow.
10. Your RA death benefits are distributed in accordance with the Pension Funds Act
The funds held in your RA will be distributed among your financial dependants in the event of your death as per the provisions of the Pension Funds Act.
This Act places a duty on the retirement fund trustees to establish the identity of your financial dependants (at the time of your death) and to allocate the benefits accordingly.
While Retirement Annuities are an excellent, tax-efficient option to save for your dream retirement, Paymaster advises that you consult a registered financial advisor to discuss the best way you can invest and prepare for this season in your life.
*LISP – an administrative platform – registered with FSCA – that packages, distributes and administers a range of investment products. (Linked Investment Service Provider).
To prepare for your retirement, see what other retirees have to share –
In conclusion, Part 2 of our ‘Retirement – Dream or Nightmare!’ series explores critical aspects of Retirement Annuities (RAs). Discover why considering an RA is essential for your financial future. If you haven’t read Part 1, catch up now to make informed decisions about your retirement journey.
Why should you consider a retirement annuity (RA) to prepare financially for retirement?
They offer:
Tax advantages
a Disciplined way to save enough to invest for growth
However, some complex details should be considered when investing through a retirement annuity.
1. You can transfer your insurance RA to a unit trust platform
A traditional, insurance-based RA policy can be transferred to a unit trust platform
Check with your insurer if they charge any cancellation fees for this
The transfer process can take some months to complete
Ask your financial advisor to prepare a cost-benefit analysis to help you make an informed decision about making a transfer. There are no expensive upfront commissions paid to your financial advisor, (as in the case of an insurance RA) – instead, your advisor earns an advice fee -charged per annum -as a percentage of your invested capital.
2. RA vs preservation fund (how to preserve your retirement benefits)
A preservation fund – is one way to save employer-sponsored funds
– when you retire, you stop paying into this fund
– you can make a full or partial withdrawal before age 55
retirement benefits in an RA structure – you can continue to pay into the fund after retirement (regularly or ad hoc).
– An RA will not allow you to access the funds before the age of 55.
3. You can invest in as many RAs as you like
You are permitted to invest up to 27.5% of your taxable income on a tax-deductible basis towards an RA (one or more approved retirement fund)
But there is no tax advantage to having more than one RA
If your RA is invested on a LISP* platform, you can fully diversify your investment (subject to the limitations of the Pension Funds Act), within a single RA
So additional RAs will not mean extra investment diversification
4. RAs are more tax-efficient than TFSAs (Tax-free savings accounts)
RAs and TFSAs – no tax payable on any dividends or interest earned
No capital gains tax consequences
The major difference – your contributions towards an RA are tax-deductible up to 27.5% of taxable income – and your contributions towards a TFSA are made with after-tax money
So consider TFSAs once you’ve maximised your tax-deductible contributions towards an RA
5. The funds in your RA are protected from creditors
Your RA funds are protected from your creditors in the event of insolvency
BUT certain monies can be deducted from your pension fund money, including money owed to SSARS and amounts payable under the Divorce Act and Maintenance Act.
To prepare for your retirement, see what other retirees have to share –
As we conclude Part 1 of ‘Retirement – Dream or Nightmare!’ exploring the intricacies of Retirement Annuities, stay tuned for Part 2 on our website and social media platforms, where we continue unraveling the remaining essential insights to help you craft a secure and prosperous retirement plan.
*LISP – an administrative platform – registered with FSCA – that packages, distributes and administers a range of investment products. (Linked Investment Service Provider).
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