STOP filing employee paper records

Stop filing employee paper records- paymaster offers electronic filing!

by with No Comment ArticleEmployee record keepingPayrollPayroll advicePayroll Tips

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.

Contact us for more information at 021 712 7333 or ian@paymaster.co.za.

Which employee-related records must I keep in order to sleep peacefully at night?

by with No Comment EmployeesEmployersLatest Payroll NewsPayrollPayroll AdministratorsPayroll TipsUncategorised

An organisation has a legislated obligation to keep employee-related records

South African legislation makes it very clear that you, the employer, have an obligation to keep employee-related records. You need to make sure that the paperwork is accurate, on time, and available to your employees, to you company-representatives, and to any government representative who may request these during an inspection/audit.

Therefore, knowing exactly where everything is filed (whether it be manually or electronically filed), no doubt makes prudent company sense.

Two methods of filing exists: the ‘old-fashioned’ manual filing method, and the more contemporary electronic document filing method.

Allow me to proceed by discussing which employee-related records need to be filed, and who may request audit-access to these filed documents that ought (at all times) to reside in your organisation’s secure document archives.

What needs to be filed: BCEA-related?

A good start is to to turn to the Basic Conditions of Employment Act 75, of 1997 (BCEA), which informs us of the statutory requirement to have a written contract of employment. This contract ought to include the following details:

  1. the full name and address of the employer;
  2. the name and occupation of the employee, or a brief description of the exact type of work/duties which the employee was hired to perform;
  3. the place of work, and, where the various locations where the employee is required (or permitted) to perform his/her duties;
  4. the date on which the employment contract commenced;
  5. the employee’s ordinary “hours of work” and “days of work”;
  6. the employee’s wage (alternatively, the contract to stipulate the rate and method to be used in order to calculate his/her wages);
  7. the rate/s of pay for overtime work;
  8. any other cash payments that the employee is entitled to;
  9. any payment ‘in kind’ that the employee is entitled to, as well as to clearly state the monetary equivalent-value of this ‘in kind’ method of payment;
  10. how frequently remuneration will be paid (i.e. frequency of payment intervals);
  11. any deductions to be made from the employee’s remuneration;
  12. the exact categories/types of leave which the employee is entitled to;
  13. the period of notice required in order to terminate the employment contract, or if employment is for a limited/specified period of time: the date upon which employment contract ceases;
  14. a description of any bargaining council or sectoral determination that governs further regulations specific to the type of business/organisation which the employee works at;
  15. any period of employment (with a previous employer) that may need to be factored into the employee’s new employment contract;
  16. a list of any other documents that form part of the contract of employment, whilst also indicating where the employee may (reasonably easily) access a copy of each of these documents.

Once an employee’s service with the organisation ends, record of his/her contract of employment must be archived for a period of three years after their leaving.

More filing needed: all hours worked and remuneration paid?

The organisation is compelled to keep a comprehensive set of records of all employees’ monthly hours worked and full details of remuneration paid to each and every employee:

  1. the employer’s name and address;
  2. the employee’s name and occupation;
  3. the period for which the payment is made;
  4. the employee’s remuneration in money; (e) the amount and purpose of any deduction made from the remuneration;
  5. the actual amount paid to the employee; and
  6. if relevant to the calculation of that employee’s remuneration
    • the employee’s rate of remuneration and overtime rate;
    • the number of ordinary and overtime hours worked by the employee during the period for which the payment is made;
    • the number of hours worked by the employee on a Sunday or public holiday during that period;

This aforementioned information must appear on each employee’s payslip. Every single employee must be given a copy of their payslip (which may be done during working hours or within 15 minutes after the employee’s shift has ended).

The organisation is compelled to keep archival record of these documents for a period of 5 years.

Lastly, an inspector (that has been legally and duly appointed in terms of the BCEA) may enter the organisation’s premises at any time, without a warrant or notice, and proceed with a compliance audit. It is incumbent upon the organisation and its representatives to prove that all employment-related records are accurate. Dependent upon the type of contraventions that may be discovered by the inspector, the BCEA provisions for a punitive fine of up to R 500 per employee (and/or a period of imprisonment for up to three years).

[tweetthis remove_twitter_handles=”true” remove_hidden_hashtags=”true” remove_hidden_urls=”true”]No filing records: contraventions discovered by an inspector, may attract a fine of up to R 500 per employee… [/tweetthis]
Consequently, prudence seems to lie in preparedness: Paymaster recommends that you ensure that your employee-related records are always duly filed (manually, or electronically) and are in order for possible inspection/audit.

Thankfully, Paymaster (after many years of professional service to its clients) has gained the experienced capacity to help make your organisation’s record-keeping an easy, effort-free enjoyment. With an automated payslip process, Paymaster keeps all your essential and valuable employee-records online (safely and securely stored in the Cloud). These records are readily and easily available (at the click of a button) at any time.

Sleep easy at night, without worrying about that BCEA inspector’s ‘knock on the door’!

Further great news: you may elect to process your payroll, Paymaster can do it all for you, on your behalf — a fully outsourced and comprehensive solution for your organisation.

Whatever you decide to choose, be assured that Paymaster has your organisation’s employee-related record-keeping needs fully covered. Ultimate peace-of-mind for you!

Become the centre of the Human Resource/Payroll network in your organisation

by with No Comment EmployersLatest Payroll NewsPayrollpayroll professionalsRecruitmentRemunerationWorkflow

Artificial intelligence  and automation to make payroll process redundant

Last week I wrote about the demise of the payroll process position.

In this article, allow me to emphasise that in 5 years time, I do believe that artificial intelligence (AI) and automation will result in the position (of payroll clerk) being made redundant. Instead, this employee’s role with increase in scope: he/she will become a ‘gatekeeper of policy’ and the ‘analyser of information’ within the organisation. The newly evolving role that he/she will fulfil is that of the Process Manager. As such, the process manager will become the centre of the human resource/payroll world! If you manage the software, you manage the world!

This newly-evolving position is becoming more and more apparent within the human resource fraternity of professional practice: i.e. the position of ‘systems manager’ or ‘traffic controller’.

[tweetthis remove_twitter_handles=”true” remove_hidden_hashtags=”true” remove_hidden_urls=”true”]This newly-evolving position is becoming more and more apparent …that of HRIS ‘systems manager’… [/tweetthis]

The role of the systems manager

What does a systems manager do?

Plainly stated, the systems manager ‘manages’ each and every human resource process. They make sure that the human resource information system (HRIS) is correctly set up, that it is receiving the correct information, and that it is being used correctly.

Next, let us consider some examples of roles fulfilled by the systems manager:

Ensuring that the parameters within the HRIS system are correctly configured

The systems manager, for example, will ensure that the correct organisation-chart is reflected on the system, or that correct skills and competencies/qualifications are linked to correct positions. HRIS setup may also focus on the recruiting process by allowing the systems manager to determine which set of core questions job candidates will be presented with. This is critical to keeping the HRIS software up to date.

Controlling the accuracy of information in the HRIS system

The systems manager monitors changes in job descriptions and updates the HRIS system accordingly. She/he will also make sure that information inputted into the HRIS system makes sense — e.g. such as analysing feedback from an interview, or details of a training programme.

Controlling the flow of information

Upon receiving a request for a new employee to be recruited, the systems manager will configure (i.e. “set up”) the online adverts, the recruitment-questions, the screening mechanisms, etc.

A further critical task involves ensuring that the entire HRIS system is optimally configured. Liaising with line-mangers—regarding details of the human resources process—involves the setting-up of interventions or appointments, which incidentally, is a key focus-point.

Another primary task may involve ensuring that when line-managers log-in, that correct processes and information is available to them — for example, by the setting up of recruitment interviews and making sure that candidates’ CV’s are available online (inclusive of the core questions and scoring-sheet being available and ready for use).

Monitoring line mangers’ use of the software, …and assisting where required

My favourite example—to emphasise a real benefit of the HRIS system—is this: training managers use the system to get the information they want.

A further example includes how to request a report or compare payslips so that line managers are indeed seen to be helping their subordinates. The systems manager is also able to request an audit report, in order to see what the organisation’s line-managers are doing. By facilitating this, the systems manager enables line-managers to automate routine tasks. Consequently, within the organisation, the systems manager certainly will be making a (significant) difference.

Assisting with reporting and analysis

The HRIS system software itself allows you to demonstrate your specialised skills, by assisting line-mangers with important analyses of their payroll and human resources information. PS — …in addition to line-managers being able to gain information from regular reports which the system provides. This is where the systems manager gets to demonstrate that she/he knows how to operate the system, thereby enabling him/her to provide relevant details quickly and efficiently.

[tweetthis remove_twitter_handles=”true” remove_hidden_hashtags=”true” remove_hidden_urls=”true”]The HRIS systems manager demonstrates that she/he knows how to competently operate the HRIS system…[/tweetthis]

So, what do you need to know in order to do this?

  • Most importantly, know and understand/work with a HR/Payroll system that offers this functionality (Allow me a quick punt: paymaster.co.za does indeed offer all of these features and functions).
  • A comprehensive knowledge of human resource practices.
  • A thorough knowledge of the organisation and its policies and procedures.
  • A full understanding of how the HRIS software operates and which functions it integrates with.
  • In terms of organisational mission, vision, goals and objectives, be sure that you know (exactly) in which direction your organisation is headed
  • Acquire a thorough working-knowledge and in-depth understanding of the needs of line-managers: i.e. determine what their wants and needs truly are

Do all this and you will become the centre of the HR/payroll hub in your company

The competent professional who will be managing this HR/payroll (HRIS) hub, not only needs to understand human resources well, but would need to understand the HRIS system too. She/he needs to know exactly how to optimally configure many HRIS processes, as well as how to keep line-mangers motivated during their own use of the HRIS system.

PS — the reader of this article would do well to recognise that (ideally) this is a full-time position.

Further good news is that for smaller organisations’ needs, this entire process may be outsourced — it is a comprehensive service which Paymaster offers.

 

Looking towards the distant horizon — the dedicated payroll department to possibly be ‘extinct’ within the next 5 years

by with No Comment Latest Payroll NewsMotivationalPaymasterPayrollProductivity


At the present moment you may well be thinking that the payroll department is the centre of the corporate universe.

Perhaps too, you are certain that organisations that rely on human capital, rightly consider their payroll department to be its primary axis.

These days most organisations simply cannot function without their dedicated payroll administrators sitting behind their personal computers, balancing countless figures whilst also faithfully keeping all the organisation’s human resource records in perfect order.

Stop. Reality Check!

Stop. The reality check is this: whilst the preceding introductory consideration may well be an accurate assessment of the current status quo in most organisations, the time has arrived for the (sensible) strategic thinking human capital professional to look towards the distant horizon, in order to consider the strong likelihood that the dedicated payroll department (as we know it), may well be ‘extinct’ within the next 5 years.

With that distant horizon fast-approaching, let us consider what the future of the payroll department might involve by highlighting 5 specialised services that it (in all likelihood) may need to offer the organisation in the not too distant future.

Provisioning of an all-inclusive Human Capital Management (HCM) solution

Market-leading HCM-solution software offers the fullest, most inclusive spectrum of operational functionality. Suppliers of preferred HCM software solutions are increasingly beginning to ensure that they cater for the broadest range of HCM functions that a successful and profitable organisation requires: from workforce acquisition, to workforce management, to workforce optimisation.

For example, software functionality is likely to include the facilitation of cutting-edge recruitment best-practices, inventive application of face-to-face and online training tools, optimal leveraging of automated skills-evaluation tools, the implementation of progressive performance evaluation controls, the rolling out of comprehensive digital document cloud-storage, and options to make constant software-adaptations to payroll management processes.

[tweetthis remove_twitter_handles=”true” remove_hidden_hashtags=”true” remove_hidden_urls=”true”]Seemingly, we are fast-beginning to see the end of purposed payroll-only software solutions. [/tweetthis]

Consequently, we are seemingly fast-beginning to see the end of purposed (i.e. isolated) payroll-only software solutions. On the rapidly approaching distant horizon, we are already beginning to see suppliers of ‘all-rounder’ HCM solutions claiming the traditional purposed/isolated payroll solution space.

Facilitating technical compliance with the utmost of ease

Nowadays, easily implementable software-development tweaks easily caters for additional HCM parameters to be built into software products. For example, consider your organisation’s ever-increasing need to speedily respond to ever-changing tax-table formulae. In a case such as this, the discerning human capital professional needs to procure a HCM solution that offers the fullest scope for manifold legislative requirements to be amended and managed with the greatest of ease (without experiencing any upgrade downtime either).

Empowering line-management

Progressive HCM executives (inclusive of their functional management teams) ought to be excellent all-rounders. The HCM function make a truly relevant contribution towards the realisation of line-management’s operational contribution to the organisation. After all, this is what the organisation’s executive management team expects — nothing less.

For example, innovative HCM-solution software allows line-management to authorise all payroll-related documentation. Consequently, in most cases, not only does the line-manager take usual accountability for production processes and outputs, but he/she now also takes a (shared) accountability for the employees working in his/her department.

At Paymaster Payroll, some of our clients (whom we provide our HCM-solution to) are beginning to (confidently) allow their line-mangers to process the full payroll-run for their respective department/s. For example, line-management is empowered with the management of additional cost-incurring overtime hours and takes responsibility for making changes to employees’ basic salary settings. The Paymaster Payroll HCM-solution ingeniously encourages line-management to take empowering accountability for the safe-keeping of relevant documents and files — in an extremely safe, secure and risk-free environment, if the supplementary online cloud-server storage is used.

Additionally, further empowerment of line-management is made possible when, for example, a line manger personally manages the full interview process: from the reviewing of CV’s/resumés, right through to the online cloud-capture of the interviewers’ notes, comments and recommendations.

Thus, as demonstrated in the aforementioned examples, it’s clearly evident that there is no longer any need for the dedicated payroll department to manage these HCM processes. Further, from an auditing control/oversight perspective, at the very end of the ‘production line’, the financial manager simply ‘signs off’ (i.e. approves) the payroll-run. Thus we see that, in this case, a dedicated payroll department is indeed unnecessary.

 

Distributed accountability through employee self-service tools

It is becoming increasingly popular (and practical) for employees to be entrusted with the accountability of maintaining their own biographical data, submitting and administering (online) their own leave applications (which is also ‘online-authorised’ by their line-manager). Immediately thereafter, all leave records are automatically updated.

By employing this process of ‘distributed accountability’ employees are given access to self-service tools that smartly facilitates the submission of their own overtime claims, …the input of their own subsistence and travel-allowance claims, …and the facilitation of numerous other (ad-hoc) employee-specific claims — all processed via the integrated self-service functionality of progressive HCM-solution software.

Employee self-service tools may also be programmed to allow unrestricted access to an employee’s personal payslip and tax certificate archive — which is (most) conveniently stored on your organisation’s dedicated secure servers, or online in a secure (shared) cloud-server environment.

Easy access to data analysis and exception reporting tools

In the present business-era where real-time decision-making is becoming increasingly necessary and (perhaps even) desired, HCM-solution software must possess a reporting-ability to enable managers (at various levels within the organisation) to instantaneously gain access to meaningful reports that facilitate informed (and accurate) management decisions.

With progressive HCM-solution software, skilled and informed financial mangers no longer require reams of printed documents in order to get a glimpse of what’s happening in his or her department (or within the entire organisation for that matter). With a single login instance, a request for a report, accompanied with the shortest of waiting periods, will allow a comprehensive payroll-run for thousands of employees to be authorised (without worrying that multiple errors may result).

With exception reporting and approval processes, the era of individual-entry verification and interim payroll-run verification checks is fast coming to an end.

Responding to the challenge — prepare for change

Should the reader of this article be suitably convinced that we may well be seeing a future where the dedicated payroll department may well be ‘extinct’ within the next 5 years, here are a few suggestions on how you may respond to the challenge by suitably preparing for imminent change:

— Make a critical analysis of what kind of HCM-solution software that your organisation will need in order to adequately prepare for a future that has no dedicated payroll department.

— As a payroll professional, periodic personal introspection is crucial to your career growth and success within the HCM field of expertise. Constantly consider what new skills you may require in order to remain employable and, (more importantly) to remain relevant once employed.

— From an organisational perspective, adequate training (at various levels) coupled with progressive change-management practices, needs to take place on a regular basis. In this regard, be sure that you do your homework thoroughly.

— Always consider your relevance factor. By setting a time-constraint to your medium-term career planning, constantly assess how you are you going to reinvent yourself (particularly within the next 5 years), in order maintain the highest ‘relevance factor’ that you are capable of.

[tweetthis remove_twitter_handles=”true” remove_hidden_hashtags=”true” remove_hidden_urls=”true”]Strategic-thinking HCM professionals take proactive, decisive steps to transition to what the future promises to be.[/tweetthis]

Concluding thoughts

This article presumes the almost inevitable arrival of a future where the dedicated payroll department is fast on its way towards becoming ‘extinct’ within the next 5 years. As this distant future horizon fast-approaches, a prudent planning approach—to be taken by the discerning strategic thinking Human Capital Management (HCM) professional—will see him/her taking proactive and decisive steps towards transitioning to what the future (almost certainly) promises to be. Be sure to source HCM-solution software that not only keeps your HCM function relevant, but guarantees that you maintain (or improve upon) your HCM relevance factor too.

Is your payroll as efficient as it can be?

by with No Comment Payroll

6 strategies for payroll best practices are…

“Best payroll practices are important to ensure that the employees are paid correctly, that the payroll is run efficiently and that the payroll department is seen as a contributor to the efficiency of the company. This is one reason that many companies prefer to outsource their payroll to companies that have perfected the science of efficient accurate payroll management.” says Ian Hurst, owner  Paymaster.

Compliance and addressing statutory requirements.

Companies need to prepare for imminent new SARS legislation and reporting requirements expected to come into force next year, or face compliance issues and an administration nightmare if their payrolls are not geared up for compliancy. SARS are requiring employers to report on payroll matters more frequently (twice next year, quarterly the year after and monthly in due course) to ensure that they are aware of defaulting employers much earlier. If an employer does not properly comply with these SARS requirements they could be in line for the hefty new penalties that have recently been legislated, including a penalty equal to 10% of the total PAYE that they should have paid in a tax year. Another good reason to leave the payroll processing to the experts.

Streamlining business systems

Streamline your business systems to help you build efficiency and improve your business’s ability to focus on its revenue generating activities. In these deteriorating economic times, improving the efficiency of business procedures (including payroll) becomes a necessity.

Integrating payroll with other systems

Integrating payroll with other systems and migration to the web – Integrating all computer systems in an organisation with each other saves manual effort in extracting data from one system and then inputting that data into another accounting system. Paymaster on line integrates into all your systems giving you the access you need to efficiently import all your payroll data into your company administration systems

Customised payslip

Customised payslip collection and employee self service removes the burden of administration from management and empowers the employee to control their own information. Online leave applications and approvals make leave management a pleasure.

Weighing up the pros and cons of outsourcing your payroll.

Smaller employers in particular will find in possible to use sophisticated software made available by Paymaster on line to access all their human resource and payroll data while leaving the processing and compliance to the experts.

Building effective reporting and analytics

Building effective reporting and analytics into payroll systems – The reports available from many payroll systems are poorly designed and virtually unintelligible to the recipient. Professional looking reports (including payslips) which are easy to understand improve employees’ perceptions of their employer. Modern payroll programmes make the writing of reports to meet your needs as easy as picking the information you want and the reports are available in a host of formats including excel.

In-House Or Outsourced Payroll? How to choose

by with No Comment Payroll

Deciding whether to process payroll in-house or outsource to a payroll provider is a big decision. The choice can cost tens of thousands of Rands. With such a big decision, there are a lot of questions you need to ask yourself before finalizing your choice. To help you with the decision-making process, this article will guide you in how to addressing the top questions you should ask yourself before choosing whether to go with in-house payroll or outsourced payroll.

How much Control do you want over the Pay Process?

If you’re looking for control over the aspects of your payroll such as its timing, and the flexibility to make changes more easily, then in-house payroll may be your best option. With in-house payroll, you have greater control over each aspect of the pay process, giving you the most flexibility. It can also be much cheaper and easier to make updates, changes, and adjustments when they are needed. If you have collective bargaining agreements or other rules that change frequently, in-house payroll may be preferable.

On the other hand, by outsourcing payroll, you give up some control over the payroll process but you no longer have to worry about doing the payroll process. Some of the steps, like gathering time and absence information, would likely need performing. And you will still need to double check information before you send it off, and checks after processing, as last minute changes or adjustments may be harder to do with outsourced payroll.

How frequently do your Employees get paid? Do different Groups of Employees get paid at different Intervals?

Paying people at different intervals such as bi-weekly, weekly and monthly, means frequently sending batches of pay to a third-party for processing. If you have multiple groups of employees who need to be paid at different intervals, it can be easier to use an in-house payroll solution instead. If you have only one pay cycle to administer, then outsourcing becomes less complex.

How often do you have to give out Last Minute Pay Cheque Changes? Process off-cycle Payments?

Maintaining payroll in-house gives you the ability to quickly process a last minute paycheque or, make an off cycle-payment. When outsourcing payroll, last minute pay may not be processed in time or it may cost you more to be expedited.

Additionally, with outsourced payroll you usually pay-per-employee payment so each additional off-cycle or last minute payment may cost you more. With an in-house payroll solution, you usually pay a license fee based on the number of employees every year. This means you can process as many additional last minute and off-cycle payments without paying more or running the risk of being unable to deliver them on time.

How Complicated is your Payroll?payroll cons=fused

How many…

  • Benefit and deductions
  • Time codes
  • Earning codes
  • Allowances

Does your company have?

 

 

If your organization has complicated payroll, processing data before creating payments is your largest and most complicated step in the payroll process. For many companies, they must do all the gross earnings or the gross to net calculations themselves, before submitting final payment amounts to their payroll service bureau. If you are in this situation of processing most of the data yourself before handing it over to a third party, an in-house payroll system could save you money without increasing workload much beyond what you have now.

Software solutions like Paymaster, provide the payroll assistance your business needs. Contact a consultant and find the right solution for your business.

adapted from an article by:

Louise Coatta
LOKI Systems

Employee Engagement and Retention Improved by Modern Payroll Solutions

by with No Comment Payroll

When it comes to discussing how Human Resources can make improvements to the twenty first century workplace, topics such as increased leave or fancy desks with free coffee machines receive short-term interest and excitement. But many experts will tell that the real way to ensure employee engagement is found in far less exciting but areas such as the very important payroll system.

Eye on Engagement

Employee engagement may be the most important thing that your company isn’t watching out for: A recent study in the US recently showed that only 29% of American employees were truly “Engaged,” in the sense that they are working at 100% capacity the majority of the time and working with and for the company’s overall goals. The majority — 55% — are considered Not-Engaged, and a troubling 16% fall under the heading of Actively Disengaged, meaning that they are working against the company’s stated objectives and goals, and generally adding a negative atmosphere to the workplace itself. Simply put, engaged employees result in a more efficient and productive workplace, and investing money in employee engagement in the short-term yields significant gains for the future.

Simple is Better

There are a variety of reasons for why an employee may feel disengaged or actively disengaged from a company, but sometimes simplifying the most basic aspects of work — like getting paid — can be the first important step to improving transparency and trust within your workplace. Over the last few years, the world of payroll went from being entirely paper-based to digital, and yet often the technology associated with paperless pay stubs, time sheets, or sign-in logs still isn’t as accessible, customizable, or as comprehensible as it could be.

Countless employee benefits go unused year after year because employees are either unaware of what’s available to them, or else are confused about how to go about claiming those benefits from their employer. A similar issue is often at work with payroll, particularly when an employee feels that something as simple as clocking in for a shift or checking their pay stub is a time-consuming process

Keeping Up to Date

Outdated technologies which require employees to jump through countless hoops just to access their own information can be a huge driver in employee disengagement as it creates a sense of frustration with the primary role that the Human Resources department serves. Moreover, it negatively impacts one of the most fundamental reasons for working in the first place: getting paid.

But with cloud-based software that allows an employee to quickly and easily access their schedule, vacation hours, pay stubs, and other important working information, much of that confusion and frustration is abated and employees have more time to complete the work itself — instead of chasing down documents they should have immediate and clear access to in the first place

Giving & Investing

Improved technology does more than just ensure that people receive their paycheck accurately and on time; more and more companies and services make it easy for employees to donate to a charity or contribute to investment programs through their employer. These benefits are also another way for an employee to feel that they are building something more with their employer — whether it is a philanthropic effort, or their long-term savings and retirement.

Customization is key here, however. An employee is unlikely to feel engaged if their money is being pledged toward a charity they didn’t choose, or if the rate of contribution to an RRSP or TFSA is not one that they are comfortable or happy with. Sites like Chimp (for charity donations) and Wealthbar (for investments) make it easy for an employee to choose the package that suits them best, and both sites are easily comprehensible and accessible, avoiding any unnecessary confusion. Paysavvy’s platform is unique in the sense that our software allows the ability to integrate with these types of services.

HR Engagement & The Big Picture

Finally, it’s important to remember that the employees working within Human Resources need to be retained and engaged as well. When payroll, charity, and investment contributions are easy, the men and women of HR also have more free time and peace of mind to pursue bigger and better projects, to do their job well, and to interact harmoniously with their co-workers.  Understandably, Human Resources personnel are happier and more engaged when working with a company that makes their job more efficient and allows them to execute initiatives that excite them.

So even if simplified payroll and contributions may not sound as enticing as zen rooms and wellness packages, the amount of time saved, frustration prevented, and engagement increased as a result of improving this one basic but vital aspect of working life, the better for everyone involved

At Paymaster we like to make things easy for Payroll and HR –  try us out and experience Error Free Payroll today

SA small business should automate HR solutions to compete globally

by with No Comment Latest Payroll NewsPayroll

Head of Sage HR Africa, Gerhard Hartman says that South African small business should implement automated payroll and HR solutions to keep pace with global competition and more stringent labour and tax laws.

“Without an automated payroll solution, most businesses will find it difficult to perform accurate calculations and file tax submissions on time,” Hartman says in a recent press release. “With African governments putting more focus on governance and tax compliance than ever before, responsible companies must have robust and accurate ways to capture and report on payroll and HR data.”

According to a Sierra-Cedar 2014–2015 HR Systems Survey White Paper, 97% of companies worldwide have adopted payroll applications. Moreover, 50% of the respondents were planning on increasing their spending on HR tech the year ahead. “This shows that African businesses that don’t modernise their environments risk falling behind the trend,” says Hartman.

This is especially the case for African companies finding themselves competing against multinationals that have established IT infrastructures, and as governments throughout Africa put in place more stringent labour and tax laws.

“Without an automated payroll solution, most businesses will find it difficult to perform accurate calculations and file tax submissions on time,” Hartman says. “With African governments putting more focus on governance and tax compliance than ever before, responsible companies must have robust and accurate ways to capture and report on payroll and HR data.”

An automated solution will take care of calculating the complex formulas, generating the relevant compliance reports, and keeping accurate records, sparing the person responsible for the payroll reams of manual paperwork, Hartman says.

Once a robust payroll solution is in place, organisations can start looking at features such as Employee Self-Service, which enables further efficiencies and helps companies to improve engagement with their employees, says Hartman. New technologies such as the cloud mean that it can be surprisingly quick, affordable and easy for companies to roll out electronic HR and payroll processes that transform their businesses.

by Nur Bremmen

 

Equal Pay: How the South African government is addressing pay discrimination in the workplace

by with One Comment Latest Payroll NewsPayroll

Equal Pay is a frequently discussed topic:

Is it unfair to pay two different employees a different wage or remuneration for the same work? It may seem like an obvious YES, but the answer is actually no. No, it’s not unfair to remunerate employees differently for the same work, but – and here’s the caveat – as long as these varying wages are not based on discrimination.

An amended law to protect employees
Towards the end of 2014, The Employment Equity Amendment Act 47 of 2013 and the Employment Equity Regulations, 2014 came into effect and subsequently, the Minister of Labour, Mildred Nelisiwe Oliphant, published the Draft Code of Good Practice on Equal Pay for Work of Equal Value (No. 38031).

The objective of the code is to provide practical guidance to employers and employees on how to implement equal remuneration for work of equal value. It also promotes the elimination of unfair discrimination with regard to pay, especially if the discrimination is based on gender, race, or disability.

The criteria examined to determine equal value

It’s all good and well to assume that work of equal value should be remunerated equally, but what criteria are applied to reach the conclusion of equality? In Section 5.3, the code lists the criteria used to evaluate job value, which include:

  • the responsibility demanded of the work, including responsibility for people, finances and material;
  • the formal and informal skills and qualifications required to perform the work;
  • the physical, mental and emotional requirements of the work.

The code also recommends that employers take into consideration the conditions under which the work is performed – these include physical and psychological conditions, as well as geographic location (although these specific criteria won’t be applicable to all assessments).

The factors that justify pay differentiation

In section 7, the code lists the factors that determine or justify why different employees are remunerated differently. These include:

  • the individuals’ seniority or duration of service;
  • the individuals’ qualifications, skills, and their potential above the minimum acceptable levels required for the job;
  • the individuals’ performance, which includes both their quality and quantity of work. This factor is based on the condition that employees are equally subject to the employer’s performance evaluation system and no discrimination is applied during grading;
  • where an employee is demoted due to company restructuring (or other legitimate reason) without a reduction in remuneration (and the employee’s salary is fixed at this level until the other employees in the same job category reach the same level);
  • where an individual is employed temporarily in a position in order to gain on-the-job experience or training, and is subject to different employment terms and conditions compared to full-time employees;
  • where there is a shortage of the relevant skill in a particular job classification;
  • any other relevant factor that does not unfairly discriminate.

How do employers evaluate jobs for the purpose of equal pay?

The code provides some guidelines with regard to evaluating various jobs to determine whether employees are being subjected to equal remuneration; how to determine which jobs should be evaluated; how to ensure that the evaluation process is not discriminatory; and what to do should remuneration be found to not be justifiable.

However, while the Draft Code of Good Practice on Equal Pay for Work of Equal Value is as specific as it is succinct, the process of determining equal pay for equal work is a complex one. Done wrong, it can result in costly and unpleasant consequences, which will affect your business’s finances and legal standing, team morale, company reputation, and even employee turnover.

This Post first appeared on Pastel Payroll

New rules applicable to income protection policies

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New rules applicable to income protection policies

BY: ROB COOPER | 22 JUL 2015 06:44
As of the latest tax year, companies are still struggling to come to grips with the consequences of the changes to the rules in respect of premiums paid to income protection policies for their payroll administration and payroll systems.

Income protection policies provide cover against the death, disablement (temporary and permanent), illness or unemployment of an individual. This individual could be the direct policyholder or employed by a company that holds the policy on his or her behalf.Up until 28 February 2015, premiums that employers paid into employer-owned income protection policies were regarded as a fringe benefit of the same value as the premium. This fringe benefit was deemed to be a premium paid by the employee and the total premium paid by the employee (including any employee-paid premiums) was allowed as a tax deduction. Annuity or lump-sum pay-outs from income protection policies were fully taxable.

New rules

As of 1 March 2015, new rules that are essentially the opposite of the old ones came into effect. Now, an employer’s payment into an income protection policy is treated as a fully taxable fringe benefit, while any payments the employee makes into an income protection policy of his or her own is not tax deductible.

Should the employee need to claim from the policy – perhaps due to illness, disability or unemployment – the pay-out (irrespective of whether it is a lump sum or a monthly annuity income) is not taxable.

Here’s where some confusion comes in: monthly annuity income from an income protection policy has changed from being taxable (i.e. remuneration) to being not taxable (i.e. not remuneration) from 1 March 2015.

This creates some unexpected difficulties in the administration of temporary disability since most of the Employment Acts rely on the payment of remuneration to define an employee. If no remuneration is paid, the individual is no longer an employee.

Booked off

If an employee is booked off from work for the reason of temporary disability, and the annuity pay-out from an income protection policy is the only income he or she receives during this time, the annuity income is no longer remuneration. But not being defined as an employee must not be confused with the individual’s employment status.

Prior to the temporary disability period, the individual was an employee, and employment can only be terminated by either the employer or the employee for reasons specified in labour law, and after following proper procedures. The individual remains employed, even though he or she is no longer an employee by definition.

What does the rather contradictory situation of a person not being an employee but still being employed mean in practice? Let’s consider this by means of an example.

Temporary disability scenario:

  1. An employee is booked off from work for six months from 1 June 2015 until 30 November 2015.
  2. During this period, the employee does not work and no remuneration is paid or payable to him or her by the employer.
  3. The insurance company pays monthly annuity income to the employer under the terms of an income protection policy.
  4. The employer essentially acts as an administrative agent for the insurance company by paying the monthly annuity to the individual.

In this scenario, the company should treat the temporary disability layoff period as a form of unpaid leave. Employers should apply the various employment laws as follows:

Basic Conditions of Employment Act (BCEA)

1. BCEA Annual leave

Section 20(2) states that an employer must grant an employee at least one day of annual leave for every 17 days “…on which the employee worked or was entitled to be paid;…”. This individual is not entitled to annual leave accumulation because he or she did not work and was not entitled to be paid.

2. BCEA Sick leave

The individual is entitled to sick leave in terms of section 22(1) that refers to the sick leave cycle of “…36-months’ employment with the same employer…”. Employment did not come to an end; therefore the entitlement over the 36-month period remains valid. However, sick leave cannot be taken concurrently with the temporary disability layoff period.

3. BCEA Family responsibility leave

The individual retains his entitlement to family responsibility leave under conditions specified by the BCEA. Again, it cannot be taken concurrently with the temporary disability layoff period.

Income Tax Act (Fourth Schedule)

  1. The person is not an employee as defined by the Fourth Schedule for the temporary disability period.
  2. The person remains in employment for the temporary disability period.
  3. The employee will be taxed on the six months of remuneration paid during the three months of work before and after the temporary disability period. This income will be reported on the tax certificate in the normal way, and on assessment will be spread over the 12 months of the tax year.
  4. The six months of non-taxable annuity income from the income protection policy must be reported as code 3602 on the tax certificate.

In other words the individual must be kept on the payroll during the six-month temporary disability period because there is still an employment relationship and because the annuity income must be reported on the tax certificate.

If the six-month temporary disability period had started on 1 December 2014, then the annuity income for the last three months of the 2014/15 tax year would have been taxable (code 3601), and the annuity income for the first three months of the 2015/16 tax year would have been not taxable (code 3602).

Unemployment Insurance Contributions Act (UICA)

  1. The person is not an employee as defined by the UICA for the temporary disability period.
  2. The person remains in employment for the temporary disability period.
  3. No contributions are paid because the individual is not an employee, and there is no remuneration on which to calculate the contribution.

Unemployment Insurance Act (UIA)

  1. In terms of section 56(4) of the UIA, the employer must declare the individual to the Unemployment Insurance Commissioner on a monthly basis during the six-month temporary disability period.
  2. 2. The following code values must be used while declaring an employee who is on temporary disability:- Code 8280 (Employment Status code) = 10 (Illness leave).
    – Code 8290 (Reason Code for Non-Contribution) = 06 (No income paid for the period)

ABOUT ROB COOPER

Rob Cooper is a tax expert and director of legislation updates and proposed legislation of Sage VIP.