Payroll Setup > Company Setup > Custom Items

SimplePay provides a number of regular and once-off system items and we strongly advise you to use these wherever possible as they often have special tax treatment and / or reporting requirements.

However, if you do need to create a custom item, you can do so by going to Settings > Custom Items > Add and selecting the type of item you need. All custom items will use the general SARS code and have the default tax treatment of that type. For more information on these aspects, please see the following article:

Custom Item Type

The first step in adding a custom item is to select the relevant item type:

  • Income – remuneration for services rendered, in addition to salaries
  • Deduction – amounts deducted from employees’ pay
  • Allowance – payments made that are required for employees to do their job; note that all custom allowances will be taxable
  • Benefit – taxable extra goods and services provided by the employer
  • Employer Contribution – contributions that are not taxable as fringe benefits; not common

Custom Item Setup

All custom items require a Name, which we generally recommend you make as generic as possible so that it can be used for all employees. For example, “Telephone Allowance” is a better name than “John’s Telephone Allowance – November 2016”.

You will also need to select an Input Type, which tells the system how the item will be added to and used on payslips. The following options are available but not all are applicable to every item type:

  • Fixed amount – regular item, which will always have the same amount, irrespective of period or employee
  • Enter Amount Per Employee – regular item, which will be different for each employee
  • Different on every payslip – regular item, which will be different for each employee for each period; the amount will be entered under Payslip Inputs each month
  • Once-off for specified payslips – once-off item
  • Hourly rate * factor * hours – regular item, which will calculate an amount based on the hourly rate calculated by SimplePay, the factor entered here and the hours entered each month under Payslip Inputs
  • Custom rate * quantity – regular item, which will calculate the amount based on the rate entered here and the quantity entered under Payslip Inputs
    • A different rate can also be specified for each employee by checking the relevant box
  • % of income – regular item, which calculates the amount based on the percentage entered here and the relevant employee’s income for the period
  • Formula – allows you to create custom formulas, similar to Excel

Additional Inputs for Income Items

In addition to a Name and Input Type, income items have the following inputs, which may or may not be applicable:

Select Taxed Annually for income that should be taxed annually. This is generally applicable to annual bonuses or other incomes that are paid irregularly and not tied to a specific period that the employee worked. More information on which payments are taxed annually can be found in the SARS Guide for Employers in respect of Employees’ Tax.

Select Include in Fluctuating Leave Rate for income that must be included when calculating the additional rate for annual leave, as per the BCEA. This means that the last 13 weeks / 3 months of this type of income will be added up and divided by the total number of hours in 13 weeks / 3 months, which results in an extra leave rate over and above the employee’s normal hourly rate. More information on this requirement can be found in the following article:

In addition to these additional inputs for income items, there are also further inputs for income and allowance items with the Input Type of “Hourly rate * factor * hours” and “Custom rate * quantity”. These further inputs are related to ETI and are discussed in the following article:

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