6-STEP GUIDE TO MANAG­ING A PAY­ROLL

Your Family - - Create A Second Income -

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.

UIF REG­IS­TRA­TION

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.

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