What are the essential reports needed to generate for the Annual EMP501 Submission?
To ensure a smooth Annual EMP501 Submission (IRP5) for the period 1 April 2024 to 31 May 2024, it’s essential to have the “Essential Reports needed for Annual EMP501 Submission”.
These submissions generate employee tax certificates for the period 1 March – 29 Feb 2024.
A guide to the reports needed for the IRP5 submissions:
Note: The report examples and directions provided are specific to the Paymaster Payroll system.
Step 1:
Balancing EMP201 and EMP501 Reports: Key reports for EMP501 submission
To begin, generate the EMP201 Report and EMP201 Breakdown Report from Reports > Reports > Standard (Classic) > Legislative. Additionally, generate the EMP501 Report for the selected tax year.
Step 2:
Identifying Discrepancies between EMP201 and EMP501: Key reports for EMP501 submission
Next, identify discrepancies between EMP201 and the consolidated EMP501 by generating the following reports: For ETI imbalances, navigate to Reports > Reports > Standard (Classic) > Legislative and generate the EMP501 ETI Breakdown Report and ETI Take On report. For Tax, UIF, & SDL imbalances, navigate to Reports > Reports > Standard > Payroll and generate the Component Variance Report and Payroll Reconciliation Report. For employee biographical information, navigate to Reports > Reports > Standard > HR and generate the Dynamic Employee Details and New Engagements and Terminations reports.
Step 3:
Generating Test and Live CSV Files: Key reports for EMP501 submission
Once EMP501 reconciles with monthly EMP201s, generate Test and Live CSV Files per frequency for the correct submission period. Navigate to Reports > Tax Certificate Run to generate the Test CSV File. Upon successful validation, export the Live CSV File accordingly.
These reports will streamline the EMP501 reconciliation process and ensure accurate submissions.
Check out our VIDEO on how to reconcile the submission on PAYROLL and EASYFILE. Click Here
Payroll is the biggest expense of an organisation, and attention to detail is essential. Employees also deserve to be paid accurately, and on time. So, if peace of mind and happy employees is a high priority for you. If your company doesn’t have the expertise or administrative resources to achieve accurate payroll runs, you should consider OUTSOURCING your payroll.
Let’s look at some other reasons to consider Paymaster to outsource your payroll:
With payroll taken care of, employers often have more time to focus on other initiatives important to growing their business, such as product development, customer service and sales
Minimize payroll errors
Payroll companies (such as Paymaster) automate most of the labour-intensive aspects of payroll, thereby reducing the mistakes that commonly result from manual calculations and data entry.
Improve security
Outsourcing payroll to a reputable provider that invests in state-of-the-art technology (with redundant backup and multiple server locations) can help employers safeguard their confidential data.
Payroll providers stay informed regarding changing government regulations. This means employers don’t have to. Paymaster will take the lead in filing the paperwork necessary for compliance.
Integrate data
When payroll is fully integrated with time and attendance systems (see Timemaster), benefits and other HR applications, it improves data accuracy and makes it easier to access information through single sign-on.
Facilitate employee self-service
Paymaster Outsource services allows employees to view their pay information, log their hours and manage their deductions – all from a mobile device.
Reduce costs
Payroll providers charge fees, but when compared to the cost of the fines and penalties as a result of mistakes or non-compliance, outsourcing payroll should actually save businesses money. Paymaster offers various options from a fully outsourced service to self-help.
Signing up with a reputable payroll provider such as Paymaster can help smooth the transition, minimize disruptions for employees and preserve peace of mind. Before you do this, make sure to determine what your company’s requirements are, so that you get the best package for your needs.
Paymaster has a 23-year history of accurate, compliant payroll services. We use the latest software available and are constantly innovating to improve our offerings. Your company and employees deserve the best, so contact Paymaster today.
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:Â
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
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:Â 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:
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.
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