SARS has come to realise that one way of tightening controls over the collection of employees tax is through their annual and bi-annual PAYE reconciliations (EMP501 process). This has led to greater emphasis being placed on payroll systems and their current reconciliation even asks which payroll system is being used. There are numerous software applications available today, but, there can be no doubt that keeping such records in the cloud is the way to go. At The Tax Shop we strongly recommend PayrollPRO.
Apart from this, the regular advantages for any employer of having a sound electronic payroll system in place are many:
- Keeping record of the largest expense in most organisations is critical to the functiong of the organisation.
- Payroll systems enable employers to produce valid payslips, often needed by employees for various reasons.
- Payroll systems ensure that proper tax, UIF and SDL is withheld for each employee.
- Payroll systems ensure that statutory leave e.g. annual leave, sick leave and family responsiblity leave are properly accounted for in terms of the Basic Conditions of Employment Act.
- Payroll systems cater for the storage of important documents such as employment contracts.
- Good online payroll systems allow employees to apply for leave, download their own payslips, IRP5s, etc. making administration of the HR function alot easier.
- Advanced payroll systems provide analytical tools to employers which genuinely empower the employer to manage employees alot more effectively. Examples of such analytics is the production of a report which reflects employees who regularly call in sick after a weekend or who take leave at critical times.
A great system we recommend is PayrollPRO which easily caters for all of the above.
In conclusion, whether an employer has 1 or 1000000 employees, we strongly advise the implementation of a recognised payroll system.