Welcome to Paymaster’s February Newsletter!
Designed by Lezé
28 February 2022
How to speak payroll and be understood
Whenever I travel to a new country where I don’t speak the language, I try to learn a few words and phrases to help me get by. I can’t overstate how useful “Help,” “I’m lost,” and “Where’s the bathroom” can be when traveling.
Payroll might not be a foreign country, but new small business owners should nonetheless familiarize themselves with these standard payroll terms and abbreviations.
Here are the top-line payroll terms you’ll hear as a small business owner.
A. Gross pay
Gross pay is the total amount an employee earns before payroll deductions. It’s the amount an employee sees on an offer of employment.
For example, say you hire Julie and say you’ll pay her a R 50,000 salary. Her gross pay is R50,000 annually/monthly .
B. Net pay
Net pay is the amount an employee takes home after taxes and other payroll deductions. An employee’s net pay for the year is the sum of his or her payslips for that period. This is the amount paid into the employee’s bank account
C. Cost to company
Cost to company refers to the cost of having that employee employed by the company. It includes the employee’s Gross pay plus any additional benefits the employer may give. Example pension or medical assistance.
Payslips are issued to employees for working. This payslip is a record of what is being paid for the month (all earnings), all deductions, and of course the net pay which is been paid into the bank..
Payroll is the process of compensating employees. Businesses can run payroll internally or outsourced to payroll software or an accounting firm.
An essential part of the process is holding a portion of each employee’s earnings and making tax payments on their behalf. In addition, employers are responsible for employer taxes, paid using business funds separate from employee compensation.
F. Pay period
Pay periods refer to how frequently a business processes payroll This is normally weekly, bi-weekly or monthly.
– Written by Ian Hurst –
You can’t talk about payroll without talking about taxes.
Here’s what you need to know.
PAYE refers to the money an employer keeps, or withholds, from an employee’s paycheck to remit for paying to SARS. The company then sends a summary of these deductions to SARS every month.
Unlike payroll taxes, employers never contribute to paying their employees’ federal or state income taxes.
Unemployment insurance fund. This is deducted and paid to SARS who collect the money. A record of these deductions are also sent to the Department of Labour.
Compensation is an overarching term that encompasses all the types of payments an employee earns.
Examples of compensation include:
- Hourly wages
- Fringe benefits
C. Fringe Benefits
Fringe benefits also called imputed income, are the perks that businesses offer aside from regular wages. Some fringe benefits are taxable, and others aren’t.
Fringe benefits include:
- Subsidized health insurance plans
- retirement plans
- company cars/travel allowances
- Gym memberships
Wage garnishment is a legal process that requires employers to withhold a specified amount of money from an employee’s paycheck and remit it to a third party. Garnishment is a tool that courts use to get people to repay debts, whether they’re unpaid child support or credit card bills.
E. Independent contractor vs. employee
Independent contractors and employees are two categories of workers. Independent contractors are self-employed people or businesses hired to complete specific tasks and most often receive project-based compensation. Companies hire employees to perform services and are salaried or paid hourly.
F. Paid time off
Paid time off encompasses all the time an employee is not working while being compensated.
Examples of paid time off include:
- Annual leave
- Sick time
- Maternity/Paternal leave
G. Employee self-service (ESS)
Employee self-service (ESS) portals, provided by payroll software, are where employees can log in using an email address, username, or employee ID number (EEID) to access their digital payslips and tax forms. Employees may edit their addresses and submit updated income tax withholdings forms through the portal. Some portals also offer automated leave processing.
Need to understand more. Talk to us.
– Written by Ian Hurst –
Meet Beverley – Our Financial Manager
Beverley has been part of Paymaster +17 years and is responsible for managing the finance whereby analysing everyday financial activities of all incoming and outgoing money. She makes sure that all financials are correct with regard to financial reports and invoicing and reports the data to Ian the managing director. Beverley acquired all her knowledge and skills from basic education where she did maths, accounting and business economics in high school and received lots of inhouse training. At age 18 she started her life’s career working as a filer and moved up to a PA and office manager at a food distribution company. She also worked at a short-term Insurance company for a year. Her payroll career started at this point, working in the leave and payroll dept. and moved over to Paymaster where she gained 10 years experience in payroll. To date, she’s been in the Paymaster finance department for 4 years. Beverley manages the entire office. She is the queen of organizing and make sure all departments run smoothly. She is also involved in her local church and help organize functions for the hospitality industry in her personal capacity.
New product features
Have you heard … WhatsaApp for Paymaster!
Employee Self Service now on WhatsaApp
Introducing PACEY, our employee self-service bot to assist you with your payroll and HR requests via WhatsApp. All customers on Premier or Master will be eligible to purchase this module as an add-on to ESS.
Employees and managers can do the following with Pacey:
- Obtain your payslip in PDF or Text Format
- Apply for leave
- Approve inbox items
- View current leave balance
- View personal information
- Submit a cliam
- Retrieve tax certificates
For more information on this module and if you would like a quote, please contact Lezé.
Email Lezé at email@example.com
Bulk Actions upload enhancement: Employee first and last name is now included on the On/Off Boarding bulk uploads sheets, and on-screen. Note the names are used for lookup/validation purposes only and will not affect the upload. The upload will still take place against the employee number. This feature has also been added to the following action types: Asset Register, Banking Details, Dependents, Positions and Tax Profile.Bulk-upload-feature
Paymaster is excited to announce that we have partnered with earned wage access provider Floatpays! Our partnership with Floatpays is another way that Paymaster endeavors to deliver greater value to our clients.
Debt is a scary reality for many in South Africa. South Africans often face financial exclusion and inaccessibility, finding themselves at the mercy of payday lenders and loan sharks.
Unplanned financial expenses can cause anxiety, stress, and decreased productivity within any workforce.
The ability to get paid instantly makes a significant difference to your employees going through a financial crisis. After all, life doesn’t wait for payday, why should they?
Monthly newsletter curated by Lezé Felton