Running a successful business isn’t just about making sales and increasing profits; it’s also about complying with all the relevant legislation.
Accurate financial record-keeping is therefore imperative, as is making deductions according to your legal obligations.
This can be a seemingly overwhelming process, especially if you’re running a start-up or a limited company. But it needn’t be. Remember that all these processes are in place to keep your business healthy: On the one hand, you’ll be on the right side of the law, and on the other, your employees will always feel secure because they’ll be informed.
Clarity is also vital for running a successful business, and your payroll system needs to be as clear as possible. So, here are five tips to make that happen.
Keep a record of payments to employees
It’s vital to record all salaries and payments and to ensure that every employee receives a payslip.
Remember that you are responsible for registering for PAYE and UIF with the South African Revenue Service (SARS). Your employees are responsible for registering for income tax with SARS, and providing you with their income tax reference number.
Payslips must detail specific information, including gross and net amounts. This means that all salary deductions must be calculated correctly, including amounts for UIF, PAYE, contributions to retirement funds and medical aid.
Once this is done, you must report all payments and deductions to SARS when submitting your various tax returns.
Make sure your employee records are up-to-date
Employee records change all the time, and it’s your responsibility to keep them up-to-date. Implement a system in your company that allows you to regularly review any changes of address, and bank account details. If you don’t, you run various risks.
Know the law
South Africa has some of the most stringent tax and labour law policies in the world. It’s important to have a general understanding of the relevant laws. If you’re not sure, spend some time on the SARS website to get some of the information you need, or hire an accountant who can help you.
Comply with SARS
SARS requires different kinds of information from you throughout the tax year, depending on the size of your business.
Your duty to the Revenue Service is to make sure that all submitted information is correct. If there are errors, you may be asked to pay more than you owe, or you could incur a fine.
Have technology on your side
Lastly, one way to ensure that all your information is correct, is to implement the right payroll software. Integrated software that can handle multiple operations will go a long way to ensuring that you’re compliant.
Your software should be able to onboard new clients easily, create pay cycles and process payroll, generate payslips, and calculate all SARS requirements.
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