Why is payroll so important?


What is the big deal? Buy a software program, press a few buttons and give the staff their payslips. The receptionist can do it tomorrow … oh, and give me the net pay I need to budget for, and the tax I need to pay to SARS, and tell the staff I am out the office if there are queries. Let the receptionist deal with that….. sorted!

I am quoting a business owner we assisted a while ago and although it is extreme, it does highlight the attitude that faces the payroll industry in South Africa. Even though the best software has been installed, payroll requires human intervention to pay precious human assets. To get it wrong can have unintended consequences. Besides SARS penalties or audits, unhappy staff can go on strike or be less productive. Individuals cannot buy food or pay their rent on time, or have money for transport to work next week. The current economic climate and wage gap places most workers on the lower pay scale, and paying someone a day later does matter.

Other countries have legislation governing who is allowed to process payroll and payroll practitioners are licensed to practice. This licence is for a specific duration and has to be renewed after a proficiency test to ensure payroll practitioners stay up to date with changing legislation.

Ongoing training on all changes in legislation affecting payrolls and best practices in accounting and security and privacy are only a few of many subjects covered. Payroll is a profession. There is even a National Payroll Day, similar to our Secretaries or Bosses Day.

Back to the South African payroll environment. Did you know that there is no less than seven Acts governing elements of payroll processing? From the Basic Conditions of Employment Act, UIF, Skills Levies, Employment Equity, Injury on duty and other acts from the Department of Labour to the Tax Act and related acts by the Department of Finance.

If that wasn’t enough, there are also Collective Agreements through the Bargaining Councils, Medical Aid, Pension, Unions and so forth.

Besides legislative compliance, the Company Director’s set the framework for payroll expectations, managers demand reports, employees want queries answered, finance department want journals and SARS want payment for taxes! This is all done on a strict timeframe and every second counts to getting the next payroll released, error free and on time.

Strong leadership is required…

….so that line managers send their input to the Payroll department before the deadline for processing and where the process is automated and the right software is installed correctly.

Staff are reminded about the urgency of meeting deadlines and their role in meeting them. When all stakeholders across all divisions work together, the payroll is successful.

Take careful consideration before blaming the Payroll Operator for mistakes in the payroll. Was enough time allocated to process the inputs? Was time allocated to checking results before paying staff and distributing payslips? If last minute changes are done, the process still has to be adhered to without any shortcuts, and time needs to be allocated to do this.

Is the Payroll Department audited, or at least, having the payroll checked by another individual not involved in the process to ensure there are no mistakes and that the headcount of active staff matches the payroll?

Most computerised payroll systems have audit reports and variance reports to assist with this function and user rights to changing sensitive information can also be set to field level. Ask your supplier to implement this if you don’t already have this.

Your Payroll Software Vendor is a valuable support to your in-house processes and can provide assistance with setting up payroll procedures and manage the implementation project with all stakeholders. Your Payroll Software Vendor can also answer those telephonic queries related to payroll and tax and give advice on how to best structure salaries, or point you in the direction of the expert most qualified to solve a problem.

Make sure you are not just a number, and that your Payroll Software Vendor allocates a knowledgeable support Consultant to you that will build up a rapport and get to know, and anticipate your ongoing requirements. Legislation is constantly changing and your Support Consultant will guide you through it.

Given the increasing level of fraud and cybercrime in South Africa, our payroll department poses a serious weakness in our overall operational effectiveness and it is time to have that serious talk to all decision makers about payroll risk management and effective payroll management.

Contact the team at Payslip for a friendly chat.

www.payslip.co.za Call +27(0)10 591 2080, 0861 PAYSLIP. E-mail: help@payslip.co.za

Article written by Kerin Trusler, Managing Director, Payslip SA(Pty)Ltd. (c) 2018, all rights reserved.

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