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Customise System Items

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:
    • Commission
    • Once-off Commission
    • Employer Loans
    • Garnishees
    • Maintenance Orders
    • Savings
  • 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.

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ETI Changes to Remuneration Brackets

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:

Monthly
Remuneration		ETI monthly tax credit
in first 12 months
of employment		ETI monthly tax credit
in second 12 months
of employment
R2 001 – R4 500R1 000R500
R4 501 – R6 500R1 000 – [0.5 x
(Monthly Remuneration
– R4 500)]		 R1 000 – [0.25 x
(Monthly Remuneration
– R4 500) ]

As always, we take the hassle out of payroll for you and have already updated the system to reflect these changes.

If you have any questions regarding ETI, read more on our help page here. Alternatively, contact our friendly support team.

Team SimplePay



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New Feature! Custom Employee Info Fields

You were onto something! Thanks to your suggestions on ways of making SimplePay even greater, we are happy to announce our newest feature! While we have built our system on simplicity and compliance, we understand that sometimes you have unique needs. Our new feature therefore gives you the ability to add your own fields to an employee’s Basic Info screen.

Want to capture an employee’s nickname or cellphone number? Add a custom “Text” field.

Want to record the date that employees completed their orientation training? Add a custom “Date” field.

Want to record an employee’s marital status? Add a custom “Dropdown” field with options to select from.

You can now capture the information that you want, with added features coming soon!

To learn more about how this functionality works, head over to our help page here.

We’d love to hear from you if this feature enhances your payroll experience. In addition, if you have any trouble with this new feature or would like some further guidance, please reach out to our friendly support team who would be happy to help.

Team SimplePay

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Updates in SimplePay for the 2019/2020 Tax Year

As we enter the new tax year on 1 March, we’d like to remind you that there is no need to do a manual year end as in other payroll systems – simply continue processing payslips into the new tax year.

When you need to do your filing, the correct period will automatically be used and the relevant documents will be generated. For more information, please see our help site.

In addition, our system has already been updated in order to ensure that you are always compliant. We are pleased to inform you that as from 1 March 2019, your payroll will automatically meet all the requirements for the 2019/2020 period, as announced in the 2019 Budget Speech on 20 February 2019. If you are still processing payroll for the 2018/2019 tax year, the old tax tables will still be used, as you’d expect.

Here are some of the most important changes that you will see in your payroll for the coming year:

2019/2020 Tax Rates

The tax rates for individuals have remained the same as last year, with only the tax thresholds and rebates increasing.

Taxable Income (R)Rate of Tax (R)
0 – 195 85018% of taxable income
195 851 – 305 85035 253 + 26% of taxable income above 195 850
305 851 – 423 30063 853 + 31% of taxable income above 305 850
423 301 – 555 600100 263 + 36% of taxable income above 423 300
555 601 – 708 310147 891 + 39% of taxable income above 555 600
708 311 – 1 500 000207 448 + 41% of taxable income above 708 310
1 500 001 and above532 041 + 45% of taxable income above 1 500 000

The tax threshold has increased from R78 150 to R79 900 because the primary rebate has increased from R14 067 to R14 220.

Subsistence Allowance

The ‘tax free’ portion for the subsistence allowance** has increased as follows:

  • The allowance for incidental costs within South Africa has changed from R128.00 to R134.00.
  • The allowance for meals and incidental costs within South Africa has changed from R416.00 to R435.00.

**It is important to note that the subsistence allowance is only a guideline provided by SARS and is not legislated.

The Medical Aid Tax Credits have remained unchanged at R310 for the main member and first dependant and R209 for every additional dependant. Additionally no changes were announced for the common payroll components of Travel Allowance, UIF and SDL

If you have any questions relating to the above changes, you are welcome to email us at [email protected] to assist you with these queries.

The SimplePay Team

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Compensation Fund Workshop – Cape Town

From 13th  to 15th  February, the Directorate Employer Services of the Compensation Fund will be assisting payroll suppliers, employers and tax practitioners in Cape Town and its surrounding areas with the following matters:

1. Application for Change to the Nature of Business (sub-class change)

2. Online Registration for Employers

3. Information Required if selected for Audit

4. Return of Earnings Form (current and prior years).

Venue: Cape Town Labour Centre, Cnr Parade and Barack Street (22 Parade Street)

Date:  13 to 15 February 2019

Time: 08h00 to 15h00

Anyone who would like to, is welcome to attend.

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Increased COIDA Threshold

The Minister of Labour announced in Government Gazette No. 42092 that there would be an increase in the OID earnings threshold
under Section 83 (8) of the Compensation for Occupational Injuries and Diseases Act, 1993 (Act no. 130 of 1993).

As from 1 March 2019, the maximum amount on which an assessment of an employer shall be calculated on will be R458 520.

This change has been made effective in your OID report on SimplePay. To access this report, go to Filing > OID (Workman’s Comp) Return.

When downloading the report for the tax year ending 28-02-2019, the threshold of R430 944 for 2018/2019 will be displayed as the 2019 tax year cap, while the new threshold of R458 520 will be displayed under the 2020 tax year cap.

When downloading the report for the tax year ending 28-02-2020, both caps will be displayed as R458 520, as the cap for 2020/2021 has not yet been announced.

Team SimplePay

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National Minimum Wage Act

In an effort to address wage inequality and stimulate economic growth, president Cyril Ramaphosa signed the national minimum wage bill into law last month.

The National Minimum Wage Act stipulates that the minimum wage is to be administered on an hourly basis and is set at R20 per hour. This minimum wage will be effective from 1 January 2019.

This means that the hourly rate will need to be changed for employees who are currently earning a wage lower than R20 per hour. To review or edit the hourly rate for employees, go to Employees > Bulk Actions > Regular Inputs and select “Basic Salary” and “Hourly Paid” under Filters.

Remember that a change in the ordinary hourly wage will also impact the rate for Sunday pay and public holiday pay. For more information on these, refer to our help page here.

Impact on ETI

The ETI Act states that when there is no “wage regulating measure”, the minimum wage to qualify for ETI is R2 000 per month. SARS has confirmed that the national minimum wage does not count as a wage regulating measure and the R2 000 minimum stands. However, the national minimum wage should ensure that employees will meet this minimum anyway.

Proposals have been made by professional bodies to amend the ETI Act to clarify this and to replace the R2 000 minimum on ETI with a use of the national minimum wage, but this potential change has not yet been approved.

If you have any further queries regarding the impact of this Act on your payroll and on the system, please do not hesitate to contact us.

Team SimplePay

 

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Option Added for Taxing Company Car at 100%

If you have an employee with a company car, the following options for taxing the fringe benefit are available on SimplePay:

  • Taxable at 80% if the employee uses the company car for less than 80% for business purposes.
  • Taxable at 20% if the employee uses the company car for more than 80% for business purposes.

This is often referred to as the SARS 80/20 rule, which outlines that employees with company cars and travel allowances are taxed either 80% or 20% based on the proportion of use for business purposes.

However, some employees have company cars that are used only for private purposes (in other words, it is not used for business at all). This means that on assessment, the fringe benefit for the company car will be 100% taxable by SARS.

To avoid the employee having to pay in tax, some employers used the Voluntary Tax Over-Deduction system item to deduct additional tax. However, this requires a manual calculation of the additional tax that the employee should pay. To make this process easier, we have now added additional functionality to the Company Car system item. When adding a company car under Regular Inputs, there is now an option to select “100%”  as the Taxable Percentage.

For more information on the Company Car system item, refer to our help page here.

We hope that this new functionality makes payroll even more effortless and we continue working towards making payroll simpler and easier for you.

Team SimplePay

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Interest Rate Change for Employer Loans

The South African Reserve Bank has decided to increase the repurchase rate (repo rate) by 25 basis points, effective from 23 November 2018.

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 increases from 7.5% to 7.75%, effective 23 November 2018.

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 23 November onwards will use the new interest rate. If a payslip dated after 23 November was finalised before the 23 November (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 23 November, 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.

Team SimplePay

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ETI Changes for Special Economic Zones

As from  1 August 2018, the criteria for employees who qualify for ETI have been amended for those working in Special Economic Zones (SEZs).

What are Special Economic Zones (SEZs)?

Special Economic Zones (SEZs) within South Africa are geographically designated areas set aside for specifically targeted economic activities to promote national economic growth and export. This is achieved through support measures to attract foreign and domestic investments and technology.  The 6 SEZs are:

  1. Coega
  2. Dube Trade Port
  3. East London
  4. Maluti-A-Phofung
  5. Saldanha Bay
  6. Richards Bay

What changed?

If employers and employers work within a SEZ there is no longer an age limit for employees who qualify for ETI. For the age qualifying test to fall away, the following two requirements must be satisfied:

  1. The employer must have a fixed place of business within one of the 6 designated SEZs, and
  2. The employee must render services to that employer mainly within a SEZ.

If you operate within a SEZ and would like to apply these changes on SimplePay, check out our updated ETI help page here.

Team SimplePay