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.
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.
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.
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:
- Dube Trade Port
- East London
- Saldanha Bay
- Richards Bay
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:
- The employer must have a fixed place of business within one of the 6 designated SEZs, and
- 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.
Today we’d like to highlight a useful feature on the system that many users are not aware of. The Copy first value down feature makes capturing repetitive data for employees much faster. The following example explains how it works:
Bob has 7 employees who are hourly paid. All employees work the same number of hours each month, but the number of hours worked differ from month to month.
To capture these hours quickly for a particular month, Bob can:
- Go to Employees > Bulk Actions > Payslip Inputs.
- Use the filters to locate the fields that he wishes to capture information for.
- Enter the hours for the first employee.
- Click on the arrow next to the column name and select Copy First Value Down.
- All hours have been copied down. If Bob is happy with this, he can click Save. If one employee did not work the same amount of hours as the rest, he can change it just for that employee.
It’s as simple as that!
Found this article useful? Let us know in the comments section below and we will be sure to highlight more features like this in the future.
At SimplePay, protecting your data is a fundamental part of our business. That’s why we have the highest of security standards in place to ensure the privacy and protection of your information.
We want your time using SimplePay online to be enjoyable and worry free. One of the ways that users put themselves at risk of cybercrime is with their choice of passwords or by saving their passwords to the device they are using. When it comes to internet security, you can never be too careful. We are therefore launching an optional security feature, called 2-factor authentication. This feature requires users to enter a verification code as an additional step when logging into SimplePay or when changing their password.
With this feature, users can establish a device as a trusted device, so that they only have to do 2-factor authentication every 30 days. All other devices will require 2-factor authentication with each log in.
As this is an opt-in feature, you will need to request it from our support team, at no additional charge. To learn more about how it works, read our help page here.
Just another way that we are helping you to stay safe online.
Been wanting more control over employee leave balances? We have heard your requests and are excited to announce the launch of a new feature which allows you to customize your leave settings even more.
Want to stop employees from logging leave if it will result in a negative leave balance? No problem!
Our new feature allows you to do just this. If a self-service leave request will result in the minimum balance not being maintained, you can opt to:
- prevent the leave request from being logged (see image below), or
- warn the employee of the outcome if they continue (see image below).
For more information on leave settings and setting this up, refer to our help page here.
We hope you love the new feature and, as always, we welcome any feedback that you may have.
Edit: Please note that there was an error on the previous version of this blog post where it stated that you could set a minimum leave balance for employees to maintain in preparation for the annual shutdown of your company. The feature is currently only available for setting a minimum leave balance of 0 or a negative number, not a positive minimum balance, which is likely to be developed shortly in the future. Our apologies for the error.
Getting confused between the draft payslips that you saved to your computer and the finalised payslips that you gave to your employees?
To make it easier for you to keep track of versions of your documents, we have added a stamp to the draft version of the following documents:
- Monthly EMP201s
- UIF declarations
To remove the stamp, simply finalise the document by clicking on the Finalise button or link for the document.
For more information on the processes for generating these draft documents, refer to the following help pages:
Let us know if there are any other features you would like to see on the system – we’re always looking for ways to make payroll better for you!
After several requests for integration with other systems, we are happy to announce that we have built a SimplePay API!
If you’re a non-technical person, just think of an API as a way for other systems to talk to our system. For example, an HR system that wants to sync employee info to payroll, or a time and attendance system that wants to automatically send hours worked through, can do this via an API. If you’ve ever wished SimplePay could integrate with another HR or time and attendance system in this way, get in touch with them and tell them about our API.
If you are a developer and have been interested in SimplePay integrating with your system, take a look at our Developers page.
Our API allows you to:
- Obtain information about the company and all employees, pay points and pay frequencies within the company.
- Create, update and delete employees.
- Access payslips for employees.
- Create or view calculations on a payslip.
- Access monthly reports, such as a Transaction History Report.
- Record leave and obtain leave balances.
We hope that you are excited about the launch of our API. We’re just getting started, so be sure to let us know what functionality you’d like to see in the API in future.
The 2018 Employer Annual Reconciliation filing season is now open. SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS and these are now available for the 2018 filing season.
You will have until 31 May 2018 to submit your Annual Reconciliation Declaration (EMP501) for 1 March 2017 – 28 February 2018 to SARS. This can be done via eFiling or the [email protected] application. You may need to update your [email protected] application to the latest version, 6.8.3. 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]
In preparation for this filing season, we have done some system updates to further simplify the process for you:
We have added additional pre-validation measures to identify data errors are before filing with SARS.
- Consolidated IRP5s / IT3(a)s
After liaising with SARS, we have updated the way we generate tax certificates for employees who are terminated – any information on once-off payslips created after their termination date are added to the tax certificate generated for their service period if the once-off payslip date falls in the same tax year.
As always, please feel free to contact us at [email protected] if you have any questions.