Paymaster Magazine

Hat 1- The payroll administrator as implementer of Legislation

The world is moving to automation. We are told that software will solve all our problems. That is true. Modern payroll software programs do “hard code” a lot  of what the law requires.  The tax deduction tables as well as a host of statutory deductions are good examples of this and happen automatically.

There is always the exception and this is why you need people to interpret and implement the Law. I agree that good software is a non negotiable component of an efficient payroll department. BUT I will argue that the skill and knowledge of the payroll professional makes all the difference.

When things change we  check and double check any new calculations we use, we explain to management what has changed, we implement and create earnings and deductions calculations that interpret the law and finally we sign off that payroll every month. we are held accountable for the correct implementation and the law.

In South Africa we have 7 laws that govern the employment relationship and we have over 700 department of labour inspectors  visiting business’s to make sure that we comply. There job is to make sure we comply with every bit of legislation. When they visit, the first department they visit is the payroll department.

The payroll department ( read payroll professional) is asked to produce records that show :

1 We  have records that show that our payroll can prove that we comply with the terms of the basic conditions of employment act ( leave days, working hours, lunch hours, overtime, notice pay and more)

2 We have records that show that payroll and company comply with any industrial council agreements ( minimum wages, provident/ pension fund and medical aid deductions).

3.We have records that show we make the required deductions for the unemployment fund and we submit this on time to the Receiver Of Revenue. Don’t forget to submit the report to the department of labour every month.

4. We have records that show we have contracts for each employee (and pay accordingly) and  we have all the required instructions to process the salary.

5.They check and double check the SDL deductions

6. They  make sure that we comply with all the provisions of the employment equity act. ( Payroll keeps all the records)

Then we have the Receiver of Revenue who :

1) Wants our Emp. 201 submissions on time every time (yes it does have to be accurate)

2) We need to show proof that we have submitted our bi annual and annual submissions that enable the receiver to make sure we are obeying and implementing the laws that govern tax deductions

3) We have to show that we have  interpreted car allowances, travel allowances, pension funds, medical aid tax credits and employment tax incentives. according to the legislation.

It is our responsibility to make sure that the payroll is set up and managed correctly so that when we are called upon by management or any outside organisation that we can prove that we are legal. The payroll software will not take the blame if it does not comply with all legislation. We must ensure that, using all our knowledge and experience, the payrolls we manage comply with the laws of the land .

A big well done to all the payroll administrators that have payroll departments that comply.  You can stand proud and  proudly say that ” I am a payroll professional”. Without us, keeping employees motivated and focused would be a  little bit more challenging for our management.

Next week our role as implementers of company policy.

Adrian Baillie-Stewart

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