The increasingly widespread use of integrated software by government departments, tax authorities, the Unemployment Insurance Fund (UIF) and industrial associations and bargaining councils, is placing huge pressure on company payroll systems.
Changes to tax legislation and the fact that some organisations are now charging companies a penalty fee if they submit paper or manually generated information, are some of the areas that have serious payroll implications for SME companies.
"One of the major challenges for small businesses is the fact that the company is now responsible for correct tax calculations and deductions from employees. Should the employer's incorrectly calculate or pay over Tax , the company is held liable by SA Revenue Services," says Ilze Botha, VAR manager at Pastel Payroll, the dedicated payroll software division of Softline's accounting software company, Pastel Software.
"Government departments, employer and industry associations, pension funds administrators and others are taking what they feel to be the necessary steps to force companies to electronically submit returns, fees, levies and other employee information."
The UIF is on record as saying that employers who fail to register their employees face a fine of R5 000, or five years' imprisonment or both. It has also said that employers failing to provide payroll information were putting their workers at risk as access to unemployment benefits for unregistered people will be twice as difficult.
The Metal Industries Benefit Funds Administrators (MIBFA) has informed its member employers that the processing of any handwritten or printed contributions returns - or electronic returns not in the prescribed format -- will attract an additional administration fee. The proposed minimum fee is R50. MIBFA is also creating a facility on its website through which employers that are processing their payroll manually can submit returns.
Botha says small businesses are particularly vulnerable to changes in legislation because their focus is usually on running and managing the operational side of the business. "An electronic payroll system, however, ensures that the business operates legally in terms of salaries, wages, tax deductions and the payment of contributions and levies."
Affordability is a key criteria for small businesses. Botha says Pastel Payroll 2003 is a single payroll system on a subscription model in which the annual fee for use of the software is based on the number of employees, affordably catering for the needs of SME companies from the smallest to the biggest.
"The subscription model is very cost-effective. Users will automatically receive all legislation updates so that they have the peace of mind that comes from not having to worry about whether they are meeting legal requirements. Most auditors and Pastel dealers also know the product well. Users are also encouraged to make use of them for on-site assistance and help."
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