5 Steps to Achieve Professional, Efficient, Payroll Immortality

Accurate efficient and deadline driven. Words that should make you feel challenged and confidant at the same time. This is the foundation for all payroll people and departments. Without these three words we cannot hope to become or remain relevant. In fact, if we are not accurate, efficient and deadline driven we will not survive the new era .
1.Communicate your expectations to line management
Line management have a reputation for ‘Forgetting” that the payroll department requires information. It is not unusual, as you know, to have to beg management for information. So, set up meetings, walk the floor, use your e mail, start a payroll department Facebook page and/or sms them the day before (some payroll programs have this built in). Just keep on talking to your customers about what you expect from them to enable you to deliver an outstanding service.
2. Agree deadlines in writing
I know this is obvious but you need something ( a contract or agreement) to make sure that the information arrives on time. Remind them gently when they miss they deadline. A funny e- mail or text showing a snail for example. In the same way reward those that are on time. (create a honor board on Facebook or send a chocolate)
3. Plan your workload
We know when we will be really busy, so plan what needs to be done , when. As the plan comes together so the monthly routines fall into place. As these routines start to become effective, and the payroll department develops a reputation for excellence, so everybody wants to make sure that the routines and procedures work. Nobody will want to be the person who does not follow procedure.(or receives the snail mail)
4. Prepare for the unexpected
Always make time, leave time to deal with the unexpected. It will happen and It will always be at the worst time. So leave yourself some time to deal with the employee who nobody knows about, or the time and attendance system not recording properly, or the unpaid leave documents that suddenly appear on your desk. to maintain your sanity, don’t take these interruptions personally.

5. Check Your Work

Lastly reconcile and balance. Make sure you have totals to balance to, and do the last month versus this month variation report. Check and investigate those funny numbers before releasing the payroll to management for approval.

Next week: Payroll automation – how that can save us from extinction.

The budget and payroll – some important things.

In this year’s budget there are some interesting changes that we need to understand and implement. Once we have understood and implemented the changes, then we have to be able to communicate all the changes and make sure that all the policy documents and contracts are up to date. So what are these changes.

 

1)      The tax threshold is now R 63 556.00 per annum or R 5230.00 per month.  If your employees earn less than that then you will not be required to deduct PAYE from the salary.

2)      The official interest rate is still 6,5% per annum.   No changes there

3)      Reimbursive travel allowance has been increased to R 3,16 per kilometre. The maximum in terms of kilometres per year remains at 8000km

4)      There have been some movement on the tax tables but these will be supplied/downloaded by your payroll service provider or you can download them from SARS

 

There are two major changes that need to be dealt with:

A)    Medical aid deductions.

In the past we have been used to deducting the medical aid benefit from the employees income and then calculating the tax to be paid. A so called tax deduction. This reduced the taxable amount of the employee.

From the first of March you can no longer do this. There will now be a tax credit. What this means is the employees earnings are not reduced and the tax is calculated on the full amount. Only once the tax has been calculated is a tax credit passed. This will reduce the amount of tax to be paid.

You will be entitled to a tax credit of R 230 for the main member and spouse and R 154 for every additional member.

This is seen as a more equitable way of dealing with the medical aids benefit and is also step one for the new NHS.

 

B)    Tax on fringe benefits

From 1 March all Group risk benefits (disability and death) need to be taxed as Fringe benefits. This means that they need to be separated out from the normal retirement funding and taxed accordingly.

If you are in any doubt please speak to your financial advisor or pension fund advisors.

 

 

Download 2012/2013 pocket guide here