The South African Reserve Bank has decided to decrease the repurchase rate (repo rate) by 25 basis points, effective from 19 July 2019.
The official interest rate used for calculating the fringe benefit on low or interest free loans to employees is set as 100 basis points above the repo rate. This means that the interest rate used for calculating the fringe benefit on employer loans decreases from 7.75% to 7.5%, effective 19 July 2019.
If you’re a SimplePay user, you do not need to take any action to implement the new interest rate, as we have already updated our system to reflect these changes. Therefore, all payslips dated and finalised from 19 July onwards will use the new interest rate. If a payslip dated after 19 July was finalised before the 19 July (i.e. it was finalised in advance), you will need to unfinalise the payslip and then finalise it again for the changes to take effect. As we have built our system to be intuitive, the previous interest rate will be used if you are still preparing payslips dated before the 19 July, regardless of what date you physically finalise the payslip.
If you are unsure of how to capture employee loans or calculate the fringe benefit on them, refer to our help page here.
We are happy to announce the release of a new feature that allows you to override payslip end dates in bulk. This feature is used to extend or shorten the payment period for a specified payslip.
This feature is particularly useful for companies that have an annual shutdown and pay their employees upfront for the period that they are on leave. If an employee is paid upfront for their leave period and the payslip end date is not changed to reflect this, then it is likely that the employee will overpay tax. This is because an employee’s year-to-date income earned and the length of period in which it was earned is used to calculate tax. Therefore, payslip dates must accurately depict the period for which the income is earned to ensure that the tax calculation is accurate.
Of course, overriding payslip end dates in bulk is not exclusively for annual shutdowns and this feature can be used in various contexts.
For more information on how to use this bulk action, refer to our help articles:
Please take note of the following issues and other matters regarding SARS eFiling:
(1) Consolidated Profiles
SARS is consolidating profiles where payroll administrators or individuals have more than one profile on eFiling.
For payroll administrators, SARS is now authenticating all existing users and migrating them to one single profile.
Individuals with multiple profiles will be required to choose a primary login from a list after logging into eFiling with any one of the profiles. Once the primary login is chosen, the indivdual must link the other logins as “Portfolios” to his/her profile.
The role in which you act is referred to as the SARS eFiling Portfolio. Only Tax Practitioner and Organisation portfolios can have multiple tax entities loaded on SARS eFiling, while Individuals cannot. Therefore, if you are a SimplePay client that does payroll for multiple firms, you should use the Organisation portfolio.
The 3 types of Portfolios referred to above can be defined as:
Individual: A person acting on his/her own behalf for his/her own taxes
Tax Practitioner: A Tax Practitioner that is registered with a recognised controlling body, acting on behalf of another tax paying entity and authorised by a signed Power of Attorney.
Organisation: A person acting as a representative of a tax paying entity, either as a representative taxpayer or as an appointed representative with a signed Power of Attorney.
(3) Tax Certificates not Pre-populating for Individuals
An error occurs on SARS eFiling under certain circumstances when an individual completes his or her ITR12 (Income Tax return):
When completing an ITR12, the tax certificate information is pre-populated in the annual return. However, when the individual saves the return and then requests a calculation, the “Creation wizard” defaults the “Unemployment” questions as YES, and the tax certificate that was linked is unlinked and is no longer available.
SARS is working on this issue. The workaround to re-link the tax certificate is:
The user must set all questions relating to unemployment as NO in the “Creation wizard”
SAVE the return, and then
REFRESH the DATA.
However, this will have the effect that the user must complete all the relevant information.
Sometimes small changes make a big difference, so you may spot some modifications that we have made to leave.
A new report
We have added a new report called Leave Days Report. This report shows the specific days that employees have taken/will take leave for the specified leave type and period. It complements our current Leave Report, which shows you the total number of leave days taken during the period, made up of the individual days shown on the Leave Days Report. This added leave report will simplify your payroll duties, as you can confirm leave dates with employees or managers. It is also useful in the management of employees and communication with other departments.
Visual tweaks to entitlement policies
We have made it clearer to see whether or not an employee is on the default company leave policy. When going to an employee’s profile and clicking on Leave > Entitlement Policies > Edit, (company default) will now display next to the leave policy if the employee is on the company’s default policy. In addition, we have updated the heading to display as Active Entitlement Policies.
You can still see the company default policy by going to Settings > Leave > View (next to the leave type) and scrolling to the bottom. However, we have changed the heading to Active Entitlement Policies (company defaults) to align with the changes made in the employees’ profiles.
We hope that these small changes will make a big difference in your payroll experience. If you need any help with leave management, refer to our help page here. For more information on reports, click here.
The 2019 tax season officially starts on 1 August 2019. However, if an individual makes use of eFiling or the MobiApp to complete their tax return, they are now able to do so, as filing opened on these platforms on Monday 1 July 2019.
Legislation requires that all employees receive a copy of their IRP5/IT3(a) after the tax year ends in February. This should now have been done, whether in digital or hard copy format. Employees can retrieve their tax certificates themselves via self-service on SimplePay, if this function has been made available by the payroll administrator. For more information on this, refer to our help page here.
Individuals should also take note of the following information:
SARS has revealed a new look eFiling website, which will hopefully improve the filing experience. For an optimal experience with eFiling, SARS recommends that a web browser should not be older than the following: Chrome v41, Firefox v55, Edge v13, Safari v10 or Opera v55
This year, if an individual meets ALL of the following criteria, then they do not need to submit a tax return:
Total income from employment for the year before tax is less than R500 000. This was raised from R350 000 last year.
Employment income should be received from ONE employer for the full tax year, and NO OTHER EMPLOYER.
There should be no other form of INCOME earned (e.g. car allowance, business income, and rental income, taxable interest or income from another job)
The individual doesn’t have any additional allowable tax related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).
If there is uncertainty about whether a tax return is required, this can be checked using this SARS tool.
We are happy to announce that we have increased our bulk actions functionality to include bulk actions for once-off payslips. If you have multiple employees with once-off payslips and need to add items to these payslips, you can now do so in bulk by going to Employees > Bulk Actions.
From here, you can select either Payslip Inputs or Clocking Imports. Then click on Switch to once-off payslips and capture your data accordingly. Please take note of the following:
Payslip Inputs: As always, only once-off items (i.e. no regular items) can be added to once-off payslips.
Clocking Imports: Only custom items with Payslip Inputs are supported for this method.
To read more about these functions, the following help pages are available:
The 2019 Employer Annual Reconciliation filing season will soon be opening on 17 April 2019 (it is usually 1 April but has been delayed due to system upgrades at SARS). You have until 31 May 2019 to submit your Annual Reconciliation Declaration (EMP501) for the period 1 March 2018 – 28 February 2019 to SARS.
SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS and these are available under the Filing section of the menu. Submissions of your EMP501 can be done via eFiling or the [email protected] application. You may need to update your [email protected] application to the latest version, 6.9.4. This can be done here. Please remember to back up your current information on your computer before installing a new version of [email protected]
For more information about the bi-annual filing process, refer to this help page. We also have a useful guide to take you through it step by step. The guide contains an important checklist which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]
As always, please feel free to contact us at [email protected] if you have any questions.
As of 1 March 2019, all contributions made by employers to funds provided by Bargaining Councils should be treated as a fringe benefit and are therefore subject to tax. These funds include, but are not limited to sick and holiday funds for employees that belong to the Bargaining Council. Note that if the fund administered by the Bargaining Council is a retirement fund, the taxation rules for retirement funds that are effective from 1 March 2016 (and that provide for a tax deduction to reduce the taxable benefit value) are applied.
In some instances, both you (the employer) and the employee contribute to the fund. The taxable fringe benefit is equal to your contribution and should now be reported on the IRP5/IT3(a) under the following new codes:
4584: Employer contributions to a Bargaining Council Fund
3833: Taxable benefit iro Employer contributions to a Bargaining Council Fund
Employee-paid contributions do not impact PAYE (they are not tax deductible) and therefore are not reported.
What action do you need to take?
If you set up these contributions using a Custom Employer Contribution item, you need to update this custom item on your payroll or Bargaining Council template to a Custom Benefit item. This will ensure that the contribution is treated as a taxable fringe benefit.
A new checkbox has been added which allows you to indicate that the Custom Benefit item is a Bargaining Council Item. This ensures that the new tax codes are applied to the custom item.
If you have many companies and need to automate this process, please get in touch with our Support team to discuss possible solutions.
If you have any further queries, please do not hesitate to contact us.
SimplePay is all about you, our users. So when you asked for more power to customise the system to suit your payroll needs, we listened. We’re delighted to announce our latest feature – the ability to create custom items that follow the same tax and payroll rules as system items.
This new feature allows you to:
Create multiple items of a certain type:
Customise the names of these items. For example, you may want to differentiate between different types of commissions.
Map different versions of a specific type of item to different Xero accounts. For example, you may want to give an annual bonus to two different employees but you want one of them to be mapped to an account in Xero called “Director’s Costs” and the other to an account in Xero called “Employee Costs”. You can add the bonus to the payslips as two different items.
How does it work?
When creating a custom item (Settings > Custom Items > Add), there is now an option to select create a copy of an existing system item. Select the system item that you wish to use and give it a custom name. You can then add it to your payslips in the same way you would the system item of that type (Regular Inputs or Payslip Inputs).
Read our help page here for more information on creating custom items.
ETI is aimed at reducing youth unemployment by providing a tax incentive to employers who hire young workers aged 18 to 29. It was meant to end on 28 February 2019, with no further tax credits being granted. However, towards the end of 2018 it was confirmed that, due to the success of ETI, it would be extended until 2029.
As of 1 March 2019, the ETI remuneration brackets have also been amended to account for inflation. Employers must still pay employees who work 160 hours per month a minimum of R2 000 in order to claim ETI. However, the maximum that employees can earn and still qualify for ETI has now increased to R6 500 (from R6 000). As a result of this increase, the R2 001 – R4 000 bracket has also been amended. Employers can claim a R1 000 tax credit per month for the first 12 months for employees earning R2 000 to R4 500.
The new remuneration brackets are as follows:
ETI monthly tax credit in first 12 months of employment
ETI monthly tax credit in second 12 months of employment