Government has this year legislated several major changes to the way companies administer their salaries and wages and non-compliant companies could find themselves on the receiving end of costly penalties.
The changes, which became effective in March and April respectively, are: directors of companies and members of CCs must have PAYE deducted each month on their remuneration; UIF contributions must now be deducted from all employees, a move that significantly increases the administrative burden for a company; and details of all employees and the UIF contributions deducted must be electronically submitted to the UI Commission by the seventh day of each month.
"It is important for companies to ensure that they are legal in terms of these legislation changes," says Terry Kier, managing director of accounting and payroll software developer Pastel Software, a Softline company.
With the new law, private companies and CCs have the added burden of registering, calculating and submitting to SARS monthly payments of employees` tax as well as all other levies that apply to directors` remuneration and this will require some complex calculations.
Kier says the onus is on accounting and payroll software developers to ensure that their programs incorporate the requirements of the legislation changes and cater for the knock-on effects of the changes so that users of the software are protected.
"We have already issued software patches to update the systems of existing users of our software and the changed formulae and calculation methods required for compliance with the new legislation have been inherent in our new software programs for the past three months."
Commenting on the UI Commission`s requirement for monthly electronic submissions, Kier says the Internet is becoming a pervasive medium for conducting business. "It is more effective in terms of costs, speed, overall efficiency and security and is being driven by government and large organisations. Smaller businesses will have no option but to go the electronic route. Our software products all have web connectivity to enable returns to be made electronically."
Pastel is exploring web technologies to deliver expanded products and services to customers while at the same time creating new opportunities for its channel partners.
"Payroll software is a growth market and the ongoing legislative changes and the move towards electronic submissions to the authorities are driving that growth at an accelerating pace," says Kier. "Electronic payroll systems are becoming an essential component of company administrative infrastructure. We see huge opportunities to grow our business in this area."
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