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1 March tax year-end filing: EMP501 guide
The Annual EMP501 Reconciliation Submission period is from 1 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 Helpdesk for additional information.
Stop filing employee paper records- paymaster offers electronic filing!
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.
The New Tax year – starts 1 March
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.
Here are five things that will make your life easier:
1) Check that your employees details are complete
Check that all the information required by the Receiver is correct and complete for all employees. To do this, you need to draw a report from your payroll system listing the following:
- Address of the employee.
- Banking details of the employee.
- Identity, work permit or passport number.
- Tax reference number.
2) That all reconciliations are done – payroll deductions to Emp 201 submitted and paid to SARS
Reconcile all Emp. 201 payments made to SARS to the figures declared on the monthly Emp. 201 form submitted to the Receiver. These must balance. (If not, correct the issue as soon as possible – or make a note of why there is a difference, so you can explain it on your annual submission).
The best way to check the balances is the EMPSA from SARS. This shows the actual payments that have been recorded for the year, and can be compared with the year-to-date totals from your payroll system. If this balances then the Emp.501 reconciliation on Easyfile should not be a problem.
3) Confirm all submissions to SARS
Check to make sure that SARS has received all your EMP.201 submissions and that there are no outstanding issues that need to be dealt with. It is ALWAYS a good idea to keep up to date with SARS documentation.
4) Remind company car and travel allowance holders
Remind all your employees who have company cars or car allowance to record their millage 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.
5) Resolve any outstanding issues
Make sure that all the earnings and deductions are listed under the right payroll codes. In addition, make sure you have all the information for any retirement annuity and medical aid tax deductions you have made.
It is a useful exercise to run a test IRP 5 upload, since this can show you any faulty issues, such as negative 3601 income or negative retirement funding income which can be corrected in the February payroll. It will also give you any area of incomplete or missing information. These all have to be corrected before Easyfile will accept the upload file.
Guide for codes – employee tax certificates 2023 (click here)
List of registered bargaining councils (click here)
If this feels to overwhelming, consider joining the many happy Paymaster clients. Contact our Helpdesk for additional information.
Understanding Payroll for small businesses
Part 1
What is Payroll?
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Because Payroll is the biggest expense of an organisation, attention to detail is vital. Employees deserve to be paid accurately, and on time.
To add to the pressure, the Payroll department is responsible for legislative compliance, as stipulated in the Income Tax Act (managed by the South African Revenue Service). Also, company policies must be enforced. For instance, regarding Leave rules and Onboarding Procedures. This would also include adherence to reporting requirements for payroll funds, such as Medical Aids and Retirement Annuities.
To aid the planning of payroll functions, it is essential that a company’s Payroll requirements are clearly understood. Incorrect or late payment of employees is inconsiderate and will result in an unhappy workforce. This, in turn, may lead to high staff turnover or cause a strike. The incorrect payment to employees may also result in the incorrect employee taxes being withheld, resulting in tax penalties and interest. Ultimately, the incorrect or late payment of employees may have a negative effect on the business’s bottom line.
There are various factors that impact payroll planning and processing. These include legislative requirements, company policies, and employee contracts. This is where a reputable payroll company such as Paymaster is indispensable in keeping your small business compliant.
1. The Payroll Process
The payroll process can run in a weekly, bi-weekly, or monthly payroll cycle, taking annual requirements into consideration. From employees being recruited to submitting the Annual Employer Reconciliation Declaration, each of these processes will be unpacked and explained. Here is an introduction to the process:
1.2 The Recruitment of employees
Organisations identify positions in the company that will work towards achieving the strategic goals and targets set by the decision-makers.
The recruitment department will advertise the available position on
various platforms such as LinkedIn, Facebook or on their websites, to name a few. Applications are evaluated and suitable candidates are invited for an interview.
1.2 Employment Contract
When Human Resources and the Head of the Department identify a suitable candidate employee, the prospective employee is offered an employment contract.
The Law of Contracts, Basic Conditions of the Employment Act (BCEA) and bargaining councils stipulate the minimum requirements for the employment contract.
1.3. Payroll Preparation
Planning annual, monthly, bi-weekly and weekly Payroll requirements will ensure employees are paid accurately and timeously. This should include identifying a Payroll processing closing date, which is then clearly communicated to all colleagues in the business. All payroll input documents should reach the Payroll department by the communicated date to allow sufficient time for payroll reconciliation.
1.4 Payroll Processing
The payroll processing checklist includes:
- Prepare all the input documents for Payroll processing
- Verify the Payroll processing period
- Make the applicable changes to the Payroll
- Onboard new employees
- Process financial information
- Record leave transactions
- Reconcile payroll input
- Pay Employees
- Distribute payslips
- Provide the various divisions with required payroll reports
- Instigate monthly statutory requirements
- Fulfill annual statutory requirement
1.5 Payroll Reports
The reports are printed after the payroll processing is finalised, and the payroll closed for further input. This provides the Financial and Human Resources departments with the required information to complete journals and ledgers and helps them make informed business decisions.
These reports also supply required information during internal and external audit processes. (Here information is verified and investigated.)
1.6 Third Party Payments
After employees are paid and the period-end Payroll and HR reports are printed by Paymaster, third parties should be paid and then notified of the member payment or contribution.
There are various types of third party payments that can be recorded on the payroll, such as:
- Retirement Funds
- Medical Aids
- Vitality
- ITA88 Notice (Agent
- Appointment Notification)
- Garnishee orders
1.7 Monthly Statutory Requirements
The Monthly Employer Declaration (EMP201) Report printed by Paymaster will display the Pay-As-You Earn (PAYE) amounts withheld, Unemployment Insurance Fund (UIF) withheld and contributed. Employment Tax Incentive (ETI) calculated amounts for qualifying employees employed by a qualifying employer are included on the EMP201. Skills Development Levies (SDL) contributed by employers for employees are also represented on the EMP201 Report.
The amounts are paid to the South-African Revenue Services (SARS) by the 7th of the following month and the monthly return information submitted electronically through eFiling. The UIF submission is automated on Paymaster, and the required information submitted to the Department of Labour.
1.8 Annual Statutory Requirements
Legislation requires employers to submit annual reports to government organisations such as the South African Revenue Service (SARS), Department of Labour and the Sector Education and Training Authority (SETA). Here are a few types of annual statutory reports:
- Annual and Bi-Annual Employer Reconciliation Declaration (EMP501)
- Occupational Injuries and Diseases Report (OID)
- Sector Education and Training Authority Reports (Skills Development Reports)
- Employment Equity Reports
Part 2
2. The Recruitment Process
For optimal business growth, and to achieve strategic goals,it is crucial to employ the best candidate for the available position.
Each company’s Human Resources department has a unique process that is followed to recruit employees. Download the organogram on Paymaster to indicate the positions or roles required for the business to function successfully and achieve business objectives (this is a paid extra).
Here is some of the information that is important for the applicant:
- Job Title
- Purpose of the position within the organization
- What the expected outcomes of the position are
- Minimum qualifications and experience
- The date that the position needs to be filled
- Remuneration
- Any special requirements (such as proof of qualifications) must be attached with the application, or if the position was earmarked as a BBBEE position
- Closing date for applications
2.1 The Interview process
The Human Resources division will sift through the applications, or make use of software applications, to identify the best suitable candidates to be interviewed.
The interview process varies according to the position, and company requirements. For more skilled positions the process is:
- Initial interview with Human Resources, to determine if the candidate employee will be compatible with the company’s culture. The interview can be hosted at the office, through a virtual meeting or telephonically.
- Applicants may be required to complete assessments such as:
o Personality assessments
o Information processing assessments
o Assessments on the ability to learn new concepts
o Brain profiling assessments. - The next interview is held if the assessments indicate that the candidate employee would be a suitable fit within the organization. This interview will include the Human Resources department, Head of department, and reporting manager. For some roles the CEO will also be present in the interview.
The presence of the Human Resources department in the final, or panel interview, is to ensure questions posed to the candidate employees are fair, and that similar questions are asked of all candidate employees. The HR department will assist management to make an informed decision so that the best possible candidate is appointed.
2.2. The Offer of Employment
Once a suitable candidate employee is identified, the Human Resources department will present the candidate employee with an offer of employment. Legislation requires minimum information to be recorded in the proposed employment contract.
The candidate employee can accept, or negotiate the offer of employment. After the Human Resources department receives a signed copy of the accepted employment contract, all other candidates are informed telephonically or through email, that their application was unsuccessful. It is considered good business practice to encourage these candidates to apply again for other available positions. Providing constructive feedback to the unsuccessful candidates can also give them with the necessary guidance in future applications.
2.3. Employee On-Boarding Process
The Human Resources department may inform the successful applicant of the expected schedule for the first day, or first week. On the commencement date, after the employee is welcomed by the Human Resources team, they will receive induction training. In this training session, important information about the company is shared with the new recruit.
As part of the onboarding process, the employee will complete forms and provide information to the HR department that will impact the payroll. This will include personal employee details such as:
- Certified copy of identification
- Residential and postal address
- Emergency contact details
- Banking details
- Tax number and tax office
- Selected medical aid plan and beneficiaries
- Retirement fund contribution and beneficiaries
Part 3
3. Payroll Processing
Paymaster supports Payroll and HR departments (especially for small businesses) to process information swiftly and accurately.
Payslips
For every payment from an employer to an employee, a payslip must be provided to the employee. Employees can be paid weekly, bi-weekly or monthly.
For Example:
The Company pays nett salaries on the 27th of the month, and commission on the 10th of the following month. The employee will receive two payslips, as two payments are made.
The Company pays their annual bonus on the 15th of December, and monthly salaries on the 27th of December. The employees will receive two payslips in December. The first payslip will be for the bonus payment and the second payslip for their salary.
Employees have an obligation to verify information printed on their payslips as specified in legislation, including the authentication of PAYE and UIF amounts.
Ignorance of the law is no excuse.
Employees can check hourly or daily payments (such as overtime) when the hourly rate and additional working hours are printed on the payslip. Printing information such as loan balances for company loans or annual leave days due, will provide information to employees and result in fewer queries to the Payroll and HR departments.
Paymaster makes payslips available electronically for employees to download and print from their Employee Self-Service Accounts. Employees always have their historical payslips available and can download the historical payslips to submit for use when applying for a loan, for instance.
Leave information that is available on Employee Self-Service:
- Annual leave due at the beginning of the payment period
- Annual leave allocated during the payment period
- Annual leave taken within the payment period
- Annual leave due at the end of the payment period
PAYMASTER PAYSLIP SLIP EXAMPLEhttps://www.paymaster.co.za/wp-content/uploads/2023/01/Presentation12-1024×576.png
Terminology
Refer to the below table for definitions and examples of Payroll terminology.
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Statutory Deduction: Pay As You Earn
Paymaster will calculate the employee PAYE accurately and as specified by the Income Tax Act. Various factors impact the tax calculation of an employee. Therefore, it is vital to record accurate details when employees are added to the payroll.
Statutory Deduction and Contribution: Unemployment Insurance Fund (UIF)
Employers must pay Unemployment Insurance Fund contributions (2% of the value of each worker’s remuneration )every month. The employer and the worker each contribute 1%.
Contributions are paid to the Unemployment Insurance Fund (UIF) or the South African Revenue Services (SARS) by the 7th of the following month.
The Unemployment Insurance Act and Unemployment The Unemployment Insurance Contributions Act applies to all employers and workers, except for:
- Workers that work less than 24 hours a month for an employer;
- Learners
- Public servants;
- Foreigners working on contract;
- Workers who only earn commission
Paymaster calculates the amounts automatically and will exclude the applicable employees from the calculations as indicated by legislation.
Statutory Contributions: Skills Development Levies (SDL)
The SDL company contribution is imposed on companies to encourage learning and development in South Africa. The SDL contribution is only paid by the employer. Paymaster will calculate the Skills Development Levy based on the taxable remuneration of the employee.
Part 4
4. Payroll Reports
Payroll reports executed from Paymaster assists the payroll and hr division to reconcile payroll processing that contributes to accurate employee payment. Payroll and hr reports are sent to the financial division to complete journals and ledgers.
Paymaster automatically sends the reports to the required division as soon as the payroll closed. The General Ledger information can be exported from Paymaster and imported into the applicable accounting software. The import file is a time-saving utility and eliminates typing errors.
Reports are used for internal and external audit processes to compare and investigate payroll processing information.
Payroll Processing Reconciliation
Payroll reconciliation reports are used to compare payroll input for the current pay period and must be generated before employees are paid to confirm the information processed reconciles with the various input documents.
The table below indicates the types of reports that can be printed from Paymaster to assist in reconciling payroll input/values.https://www.paymaster.co.za/wp-content/uploads/2023/01/Component-Variance–1024×624.pnghttps://www.paymaster.co.za/wp-content/uploads/2023/01/Component-Report-1024×668.png
Payroll period end reports
The payroll processing reconciliation is completed with the payroll reports balance with the input documents received. After employees are paid and the payroll closes the payroll reports for the payment run are automatically emailed to the specified divisions.
Paymaster allows users to print historic reports from the current pay month, this feature is of great value during internal and external purposes. As a cloud-native payroll, the data is always available to the approved Paymaster users.
The below table includes examples of these reports:
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Should you have any questions regarding this, please feel free to get in touch at 021 712 7333, or email us at help@paymaster.co.za.
Hat 5 – The responsibility of “What if”
When management wants to know how changes will affect staffing costs, or staff expenses, the Payroll department is their “go-to” for these answers. We are trusted to give accurate information, so they know they can rely on our reports, projections and opinions to make decisions. Decisions which could have far-reaching consequences for the company. Therefore a great responsibility rests on us to provide accurate historical reports ( usually a print out from Payroll) or even to offer a projection. And on these management will base their decisions. This is Payroll’s chance to shine, to make their mark…and be sure to get it right!
When asked for a projection, it’s Payroll’s opportunity to be centre-stage. You may be asked to “run the numbers, maybe run 5 different scenarios, with 3 different minimum wage options. We would like to see how it all works out.”
What if we introduced a pension fund…. What would it cost at 5% ,7% or 9%?
What if the government increases the minimum wage? To R 4500 or R 5000 or R5500?
Could we survive?
What if we gave everyone an extra day of leave…. what would it cost?
The payroll department are the “go-to people” to answer all the” what if” questions.
We do the forecasting and scenario planning. We take the data from the payroll and manipulate, and number crunch, before presenting management with a couple of scenarios to work with. If we are respected, we may even be asked to venture an opinion as to what we think the best option is.
How to live up to this responsibility
Make sure you have a payroll system that can extract data in a format that you can use. It is great when you can get the report in excel, and then work from there. If the payroll software can do the analysis and “what if” planning, even better.
Make sure your payroll data is up to date, and that you are working in the right month.
Make sure the software can provide you with the right base information so that you do the projections using the correct data.
Test your understanding of what is required. Stop, plan and then act.
Test the data before the “what if” analysis begins. Make sure you have taken into account all the variables.
Test the final conclusions for reasonableness.
Present the results in an easy-to-understand format. For instance, graphs work well. Perhaps consider a “bottom line” summary, then one can dig down if necessary.
And what to do if you are not asked…?
BE PROACTIVE! Analyse your Payroll, and look for trends. Look out for possible savings. Watch the news, so that you are up-to-date with new legislation. Do reports and present them to management, even before they ask.
Do a monthly analysis of what’s happening that could impact your payroll. Then include these in your monthly reports. Maybe add a small “Heads up” section.
For example, consider the changes in retirement funding in this country. How will it impact your payroll? Will you communicate to management the change in taxation? How will the payslip look now, since the provident fund contribution is no longer taxable?
There is a huge responsibility for us in these “ What if” scenarios. But also a huge opportunity to enhance the reputation of your payroll department. Grab them with both hands!
Hat 4 – Communicators of change
Th 5 effective strategies –
The payroll department is often tasked with the responsibility to communicate the changes agreed on by management and the unions regarding conditions of employment or changes to legislation, that impact employees. This usually means interpreting the changes and making them real and meaningful to all customers. (This may also include sending out the actual notices announcing the changes.)
Payroll is the only department able to explain how the changes will affect the employees’ take-home pay, or their benefits (eg. leave days or pension deductions). We have a unique opportunity to interact with the employees, and make sure there is a complete understanding of how the changes will impact each one personally. What a privilege!
Here is an example. In March 2016, changes in retirement legislation were announced in South Africa. If you were including life insurance or disability in your one tax-free deduction, this could change, and now become tax deductable. This would reduce the employee’s take-home pay. And of course, the payroll department is the first stop when explanations are needed around this.
Five strategies to communicate change effectively
1. Use face-to-face meetings
Nothing is as powerful as sitting across the table from your employees (or customers), and explaining in detail how the changes will impact them. Use a dummy payslip (and alternative if you have them) as a visual example of the changes, and their impact. And be ready, and patient, to answer questions and concerns. This way they will be prepared for their changed payslip.
2. Identify champions
One champion has the power to convert many. Identify a leader ( shop steward, supervisor, line manager or senior manager), and make sure they have a thorough understanding of the changes. They can be the first line of explainers, and answer the basic questions. A detailed and clear question-and-answer sheet will be very useful. Speak to management for advice, if necessary, to approach these leaders, or be proactive and cultivate relationships with the leaders in the company.
3. Language and medium of communication
Important (and obvious), is the fact that home language is much more powerful for effective communication, compared to a 2nd language. Visual aids (eg. pictures) and simple explanations are always better than long, complicated and wordy descriptions. Ensure any hand-out pamphlets/documents are concise, and clear, and that the information is correct. Communicating the wrong facts is difficult to undo, and will negatively affect the organization and your reputation.
4. Honestly explain the benefits and downsides
It always pays to be 100% truthful, and convey ALL the facts, even if this might mean anger and outrage ( not your fault, you are only the conveyor of the facts). When explaining the benefits, do it in detail, and be sure NOT to oversell the upside. Be realistic. And in the same vein, don’t minimize the downsides.
5. Have an Action Plan
Make sure you have a clear action plan before starting the communication process. Decide WHO will communicate WHAT, and WHEN. Who will be available to answer questions, and when? Make sure everyone is up to date, and in the loop on what is to be implemented, and when. And what documents need to be signed, and by whom…
Coming next… Hat 5: The responsibility of What if?
10 Hats worn by payroll professionals
10 Hats worn by the payroll professional: 10-week series by Paymaster
#proudpayrollprofessionals #Hat
Week 1 day 1
A few months ago, while talking to a group of Payroll people I was asked, “what will the future payroll administrator look like” and “what will be doing”
I must confess that I am biased. I love being in Payroll, I love serving my customers(employees ) and helping Management wherever I can. I am proud of what we do. BUT I am saddened by the image we have, the feeling that we are only noticed when things go wrong.
Anyway let’s start this series:
We are not
- Retreaded staff with nowhere else to go
- Payroll is not the last step before retirement
- We don’t all have our hair in a bun and a scary frown on our face
- We don’t like being stuck away in corners
- We are not data captures.
- We are not there to bend the rules because you messed up and now don’t want to face the consequences.
What are we:
- Proud employees who have chosen administration as a career
- We love getting things right – it is in our nature
- We think about influencing strategy and understand what the company remuneration policy is and how it impacts strategy and results
- We are open and friendly but can be tough at times
- We love doing analysis, what if calculations
- Trusted – you have no idea of the secrets we keep – “especially when we like you”
The 10 HATS:
Over the next 10 weeks we will be looking at the hats we wear and the challenges we face.
- Interpreter of the law
- Accurate keeper of information
- Gatekeeper of compliance
- Communicator of changes
- The responsibility of “What if” questions
- Trusted confidant/employee
- Financial counsellor
- The problem solver
- Moral compass
- The interpreter of company policy
We will use five key words (one every day of the week) to focus your attention on subsections of HAT (the subject at hand)
The 5 key words are :
Information – what does this topic mean
Inspiration – why is this topic important for me
Education – what do I need to know, (policy procedures, knowledge or consequence
Community – a place where you can tell your story
Survey – let’s find out what we all think.
Join me on this journey of discovery and adventure. We will all learn something.
Coming up…Hat 1: The Payroll Administrator as implementer of Legislation
Find the HATS videos on our YouTube channel today!
Payroll Professionals: the capstone human resource in an organisation
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Latest Payroll NewsLeadersMotivationMotivationalPayroll Administratorspayroll professionals
Do you desire to be known as the ultimate payroll professional?
Do you wish to be the ultimate ‘go to’ person in the payroll department? Similarly, do you dream of being that ‘one particular person’ within your organisation, that is truly indispensable to the running of the business?
This is possible and it ought to be an achievable reality too.
Payroll professionals need to boldly step up to the plate. The payroll professional is an essential component within the smooth-running operations of most enterprises. Long gone are the days where the payroll clerk merely occupies desk-space, punching numbers (whilst apologising for getting in the way of the other business functions).
The time has arrived for the payroll professional to be recognised! All too often, in the past, the payroll clerk was only ever noticed when mistakes were made. But not anymore! The payroll professional is the much-needed capstone human resource within many types of organisations.
3 building-blocks: relevance, indispensability & being pro-active
The primary building-blocks of any payroll department comprises its relevance, its indispensability and its ability to be pro-active when business challenges arise. Without these building-blocks, the modern payroll department will not survive the contemporary era of automation and process-driven payroll operations.
Relevance
In everything you do—as a proud payroll professional—strive always to make your contribution relevant. Be sure to have accurate, correct facts and figures at your fingertips. Be ready to highlight the relevant challenges being faced (and how to possibly address these challenges):
- Alert management to increasing overtime spends, particularly if it is leaning towards becoming a trend.
- Raise an early white flag when you sense that labour-turnover rates are starting to look problematic.
- Sound the alarm bells when new legislation stands to impact an organisation and its employees.
In order to make a relevant contribution, line-management oftentimes inadvertently forgets that the payroll department requires a wealth of rich meaningful information. The payroll professional should never have to repeatedly beg for information from other departments within the organisation. To be relevant, you need information — make sure you get the relevant information, on time, all the time.
Indispensability (your absolute necessity) to the organisation
Work towards gaining a thorough personal understanding of the human resource production line, right from the very beginning through ‘til the very end — from preliminary planning phases, to recruitment processes, …right through ‘til possible termination phase. This fosters and entrenches your indispensability to the organisation.
Importantly, don’t settle for only knowing how to operate your payroll software, but strive to master your use and understanding thereof. Once you’ve mastered this, you naturally become the central resource (information-hub) which others will feel drawn towards. For example, make it your primary speciality to know exactly how to set up a new employee record, …how to create an interview appointment, …or, how to issue the query for that complex management report.
Remember this: the line-management function prefers to manage. Intricacies and details of the payroll system is not their forté or interest — it’s yours, the payroll professional. Make sure that your indispensability comes from your special expertise.
Be Pro-active
The ability to be a pro-active payroll professional takes nothing more than a little well-considered thought and the ability to think ahead (i.e. planning).
Some common-sense examples include, the setting up of regular (and ad-hoc) meetings, …provide feedback on changes, …‘walk the floor” and/or engage others via e-mail, …start your own departmental Facebook Page, …use instant messaging to communicate with your employees (nowadays a standard built-in function with many payroll software packages).
Pro-actively build relationships with your various customers. Be sure they know what you expect from them. Remind them of what you consider to be your definition of outstanding service delivered to them.
Pro-active payroll professionals:
- Expect to see the consequences of today’s actions, materialising sometime in the near or distant future.
- Are expected to prepare management reports before being asked to prepare them (an automated feature which payroll software is easily able to do).
- have forward-looking, forward-thinking minds, particularly when it comes to planning for public holidays and unexpected work stoppages.
- Always think about next month (and next year) while processing the current payroll.
- Are always anticipating the unexpected to happen — if the unexpected does indeed happen, it’s bound to be at the worst time. The pro-active payroll professional knows this.
- Always double-checks their outputs/work — …“always reconcile and balance” is their trusted motto.
The payroll professional truly is (and always ought to be) the capstone human resource within the organisation.
Bottom line: The payroll professional actively works towards wanting everybody in the organisation to confidently say, “To be sure, let’s ask our payroll professionals first”.