{"id":572,"date":"2018-06-11T12:25:43","date_gmt":"2018-06-11T10:25:43","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-za\/blog\/?p=457"},"modified":"2026-02-04T18:11:44","modified_gmt":"2026-02-04T16:11:44","slug":"payroll-guide","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/payroll-guide\/","title":{"rendered":"Guide to payroll for African businesses"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-za\/blog\/category\/people-leadership\/paying-people\/\" class=\"entry-header__link\">Paying people<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tGuide to payroll for African businesses\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2018-06-11T12:25:43+02:00\">Jun 11, 2018<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Guide to payroll for African businesses\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-za\/blog\/payroll-guide\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author\">\n\t\t\t<div class=\"co-authors\">\n\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-za\/blog\/author\/abiolaadegbite\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/Abiola-Adegbite-Sage-1-350x350.jpg\" class=\"entry-author__image\" alt=\"Abiola Adegbite\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/Abiola-Adegbite-Sage-1-350x350.jpg 350w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/07\/Abiola-Adegbite-Sage-1.jpg 512w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Abiola Adegbite<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p>Payroll is one of the most important business operations. It refers to several activities related to paying your employees on time, while also sending the correct tax to the authorities. Governments across Africa \u2013 including in Nigeria and Ghana \u2013 are clamping down on businesses that fail to fully declare their dues. So, ensuring your payroll is efficient and error-free is doubly important.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-paye\">What is PAYE?<\/h2>\n\n\n\n<p>Pay as You Earn (PAYE) is a system of personal taxation, where the employer deducts tax from employees\u2019 payslips, before sending this to the relevant tax authorities.<\/p>\n\n\n\n<p>It requires you or your accountant to calculate the exact amount of tax each employee should pay, depending on their circumstances and gross salary.<\/p>\n\n\n\n<p>PAYE makes it easier for governments to collect income tax revenue. Without PAYE, all individuals would have to complete their own annual tax returns. This would give governments less regular income and creates potential for human error and fraud.<\/p>\n\n\n\n<p>PAYE systems vary from one country to the next, and reflect the different tax bands set by their governments. In some countries, there is no tax on initial earnings, while others don\u2019t have any tax-free allowances. In Ghana, for instance, the first 3,132 GH\u00a2 are not taxed, but you will pay tax on all earnings above that amount. By contrast, Kenyans pay 10% tax on their first 1,298 Shillings, then 15% on the next 11,587 Shillings, and so on.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-making-sense-of-your-payslip\">Making sense of your payslip<\/h2>\n\n\n\n<p>Payslips can be confusing, with their curious codes and unexplained figures. Often, employees are unsure as to why certain deductions were made. &nbsp;Here are common details found on most payslips:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Gross pay:\u00a0<\/strong>This is your initial pay before PAYE deductions.<\/li>\n\n\n\n<li><strong>Net pay:\u00a0<\/strong>This is your \u2018take home\u2019 pay \u2013 the money you receive after tax.<\/li>\n\n\n\n<li><strong>Payroll number:\u00a0<\/strong>Your company issues everyone with a payroll number.<\/li>\n\n\n\n<li><strong>Your tax code:\u00a0<\/strong>Authorities will assign you a tax code. This depends on your employment situation and other factors (like how many jobs you have, your marital status, etc).<\/li>\n\n\n\n<li><strong>Deductions:\u00a0<\/strong>This is a list of all tax collected by your employer on behalf of the tax authorities.<\/li>\n\n\n\n<li><strong>Sick pay and other leave:\u00a0<\/strong>Sick pay and maternity\/paternity leave.<\/li>\n\n\n\n<li><strong>Other benefits:\u00a0<\/strong>Bonuses, overtime, company perks, and other benefits.<\/li>\n\n\n\n<li><strong>Exemptions and reductions:\u00a0<\/strong>In some countries, various exemptions and tax relief may be noted on your payslip. In Nigeria, for instance, reductions for costs like dependent family, children, or medical allowance reflect on payslips.<\/li>\n<\/ul>\n\n\n\n<p>If in doubt, ask your company\u2019s accounting department.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-payroll-accounting\">What is payroll accounting?<\/h2>\n\n\n\n<p>Payroll accounting is the process of recording all your employees\u2019 compensation and the tax you pay to the authorities.\u00a0Good payroll accounting means you have a clear \u2018paper trail\u2019 of salaries, expenses, and bonuses you pay to staff. It also means that you can provide all information required to government auditors, should they request it.\u00a0Payroll accounting also involves noting all payments in your general ledger to ensure your books balance.<\/p>\n\n\n\n<p>Payroll accounting is typically done monthly, but it can also happen more (or less) frequently. It involves tasks such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recording gross wages, salaries, and bonuses;<\/li>\n\n\n\n<li>Deducting taxes and sending these to the authorities; and<\/li>\n\n\n\n<li>Calculating exemptions for employees.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-do-i-need-a-payroll-management-system\">Do I need a payroll management system?<\/h2>\n\n\n\n<p>Small businesses and start-ups may be able to get by with running payroll through spreadsheets and manually producing their employees\u2019 payslips. However, this is hugely time consuming and, as a business grows, it\u2019s more effective to use an automated system that can do most of the calculations for you. Immediate benefits include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Significantly reduced risk of data entry errors;<\/li>\n\n\n\n<li>Rapid processing of payments;<\/li>\n\n\n\n<li>Automatic calculations of relevant deductions;<\/li>\n\n\n\n<li>Frequent updates to make sure you comply with the latest legislation;<\/li>\n\n\n\n<li>Easy-to-use and secure software, and<\/li>\n\n\n\n<li>Digital payslips.<\/li>\n<\/ul>\n\n\n\n<p>If your company is growing, a modern payroll system can make the process of paying staff and authorities less painful. Find out how&nbsp;<a href=\"https:\/\/www.sage.com\/en-za\/sage-business-cloud\/payroll\/\">Sage\u2019s HR and Payroll software<\/a>&nbsp;can help make your payroll processes fast and efficient.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Sage Business Cloud Payroll<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Pay your people with confidence, even if you&#8217;ve never run payroll before.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-za\/sage-business-cloud\/payroll\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-622\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>See how easy it is<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-627472163_super-1064x810.jpg\" class=\"single-cta__image\" alt=\"Florist\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-627472163_super-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\t\t\t\tA payroll system helps pay your staff the right salary while also collecting government tax via PAYE. This guide will tell you all you need to know about payroll, PAYE and the details found on a payslip.\t\t<\/p>\n","protected":false},"author":801,"featured_media":495,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[40],"tags":[201],"business_type":[2,5],"lilypad":[],"context":[],"industry":[],"persona":[6,15,16],"imagine_tag":[51,100,85],"coauthors":[425],"class_list":["post-572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-paying-people","tag-hr-payroll","business_type-small-business","business_type-accountants"],"sage_meta":{"region":"en-za","author_name":"Abiola Adegbite","featured_image":"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-619403886.jpg","imagine_tags":{"51":"Accountants","100":"Payroll software","85":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice South Africa","distributor_original_site_url":"https:\/\/www.sage.com\/en-za\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/users\/801"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/comments?post=572"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/572\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media\/495"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media?parent=572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/categories?post=572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/tags?post=572"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/business_type?post=572"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/lilypad?post=572"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/context?post=572"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/industry?post=572"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/persona?post=572"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/imagine_tag?post=572"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/coauthors?post=572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}