6-STEP GUIDE TO MANAGING A PAYROLL
Another crucial area of owning and running your own business is paying your employees and ensuring you’re on track with all the legal and tax requirements that come with being an employer. According to Itweb.co.za, there are six important steps to consider:
EMPLOYER REGISTRATION FOR PAYE
Your first act as an employer should be to inform SARS you are registering as an employer and will be submitting PAYE (pay as you earn) tax. SARS requires you to register as an employer by completing and submitting the EMP101 form no longer than 14 days after becoming an employer.
PAYMENT OF PAYE TAX
You’ll be required to pay the PAYE tax collected from your employees to SARS by or before the seventh day of each month, and submit a completed EMP201 return.
A monthly contribution is made to employees’ unemployment insurance fund (UIF). The UIF is intended to provide your employees with an income if they find themselves unemployed, made redundant or on maternity leave. Employees and employers will each contribute an amount equal to 1% of an employee’s salary to the fund.
As an employer, you need to register for UIF with the Department of Labour by completing the UI-8 form, after which you’ll be given a registration number. You must also register for UIF with SARS within 14 days of becoming an employer. As well as making monthly UIF payments, you’ll also be required to declare these contributions, which can be done either electronically via your payroll system or by submitting a paper-based UI-19 form.
ISSUING TAX CERTIFICATES
As an employer, you’ll be responsible for issuing tax certificates (either IRP5 or IT3A forms) to your employees at the end of each financial year. These tax certificates must be issued so that you can complete your employer reconciliation submissions (EMP501) and declarations (EMP201), which must be submitted to SARS at the end of each tax year. If your payroll system is automated, producing and printing tax certificates should be as easy as pushing a button. You’ll also be able to automatically upload the certificates to the SARS online returns systems.
SKILLS DEVELOPMENT LEVY (SDL) REGISTRATION
A 1% skills development levy (SDL) is imposed on the payroll by the government to encourage learning and development within the company. The SDL is applicable when salaries paid by the company amount to a total greater than R500 000 – if this is true for your company, you’ll need to register for SDL with SARS no later than 14 days after becoming an employer.
STREAMLINE YOUR BUSINESS WITH AUTOMATED PROCESSES Running an automated payroll system makes integrating your internal payroll processes with your SARS submissions fairly straightforward. SARS’S electronic submissions applications integrate fully with automated payroll systems, so you should be able to file returns and interact administratively with SARS from your office at any time of day.