Payroll Changes effective 1 March 2022
As we enter the new tax year on 1 March 2022, several legislative changes have been announced by government that directly affect your payroll. In this blog, we discuss the changes to the calculation of the Employee Tax Incentive and the increase to the National Minimum Wage.
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.
As always, our team will implement the necessary changes to our system timeously to ensure that your payroll remains compliant with the tax changes. From 1 March 2022, your payroll will automatically meet all the requirements for the 2022 / 2023 tax period. If you are still processing payroll for the 2021 / 2022 tax year, our system will continue to apply the old tax tables.
Employment Tax Incentive
In the 2022 State of the Nation Address, the President announced that the criteria for participation in the ETI will be expanded. The first of these changes is an amendment to the definition of remuneration in the ETI Act. This amendment will impact the calculation of the ETI and we will provide you with further details in a separate blog that will be published shortly.
It is possible that government will announce further changes to ETI; however, we await confirmation in this regard.
National Minimum Wage Increase
It was also recently announced that the National Minimum Wage Rate will be increased from R21.69 to R23.19 per hour with effect from 1 March 2022. The wage rates set in the various sectoral determinations have also been increased proportionally. For more details, please refer to the media statement by the Minister of Employment and Labour.
This increase will impact employers claiming ETI. As our system uses the wage regulating measure or minimum wage to determine whether an employee qualifies for ETI, users will need to update their applicable rates in order to stay compliant. For more information in this regard, please view our ETI Management on SimplePay help page.
National Budget Speech 2022
On 23 February 2022, the National Treasury presented South Africa’s 2022 Budget Speech. Details about how the announced changes will affect payroll will follow shortly in our upcoming National Budget Speech 2022 blog.
We hope that this information has proved useful to you. If you have any questions on how the information provided relates to SimplePay, you can contact us at info@simplepay.co.za.
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Keep well and stay safe.
Team SimplePay