The Payroll Professional is driven by Legislation.
Accountable Payroll professionals do nothing unless it is prescribed by LAW. Based on Legislative prescriptions, they will calculate basic pay, overtime and sick leave. Everything they do should be guided by legislation.
As the world increases its’ reliance on Automation Software, it is touted as the solution to all our problems. And this is largely true. Modern Payroll Software programs “hard code” what legislation requires. Such as tax deductions tables and many other statutory deductions.
While good software is essential to an efficient payroll department, there are exceptions where automation is unable to solve the problem. In this instance, a Payroll professional needs to interpret and implement delicate nuances embedded in legislation. For this reason, we strongly promote the skill and knowledge of the Payroll professional, who can make all the difference.
For example, when legislation requires an exception, resulting in a change to the payroll, the Payroll professional needs to check, and double check the new calculations being used. After this, they should explain the changes to their management team. They are now better prepared to implement and create earnings-and-deductions calculations. These must be in line with the most accurate interpretations of the legislation governing these calculations. Now the payroll is ready to be signed off, at the end of each month.
Payroll professionals are rightly held accountable for accurate interpretation and implementation of legislation relating to the employer/employee relationship.
6 Laws that Govern the Employment Relationship
In South Africa, there are 6 laws that govern the employment relationship, and more than 700 Department of Labour (DOL) inspectors that visit businesses to ensure full compliance with every aspect of these laws. When a DOL inspector arrives at a business premises, they are most likely to visit the payroll department first. Payroll administrators will be asked to produce the following records:
- that show the company complies with the Basic Condition of Employment Act (ie. leave days, working and lunch hours, overtime, notice pay, etc.)…
- that prove they comply with Industrial Council Agreements (ie. minimum wages, provident/pension funds and medical aid deductions).
- that the company has records of the prescribed monetary deductions for UIF, and that these deductions are submitted, on time, to the Receiver of Revenue (SARS). And not forgetting the monthly report that the DOL requires.
- that the company produces and keeps records of all employees’ work contracts, and that payments to all workers are accurate. The company must also produce records of required authorisations and instructions relevant to the processing of these employee salaries.
- that the company double checks relevant Skills Development Levy (SDL) deductions.
- that the company is fully compliant with all provisions of the Employment Equity Act (and that these records are kept by the Payroll department).
South African Receiver of Revenue (SARS)
In this country, SARS requires the following:
- All Emp201 submissions are accurately calculated and processed – ON TIME!
- There must be records that show the company’s bi-annual and annual submissions, that prove to SARS that they are adhering to, and implementing all relevant laws that govern tax deduction.
- The accurate interpretation and implementation of all laws relevant to car allowances, pension funds, medical aid tax credits, and employment tax incentives.
Payroll Professionals – the Implementors of Legislation!
The Payroll professional carries the responsibility to ensure that the payroll is set up, and managed correctly. If called upon by management, or outside organisations, they should be able to prove that their company is “legal” and complies with all aspects of SARS and other relevant employment legislation. Non-compliance CANNOT be blamed on Automation Payroll Software. The onus is on the Payroll professional to ensure that by using all their expert knowledge and experience, the payroll they manage is fully compliant with the laws of the land.