Every New Year people around the globe start making New Year’s resolutions. Companies try to motivate their staff for better performance. Leaders speculate what the year has in store for them. I am asking the same for payroll. What does 2013 have in store for payroll?
Last year we saw the announcement of proposed changes to the Basic Conditions of Employment Act, the Labour Relations Act and the addition of a Tax Administration Act. During the budget speech in February 2012 and the interim budget speech in August 2012, the minister of finance spoke of the proposed changes and additions to the Medical Tax Credits.
The major changes in the acts spoken of should not affect the payroll department as far as the payroll itself goes. The changes are to the administration of the acts, the changes to the penalties and the application of the rules. The ministers of the Departments of Labour and Finance and the various commissioners will, should these acts be signed into law, be given more powers in the application of the acts. This means that the payroll administrators will need to know what is expected of them if receiving an audit from any of these departments and understand the powers the auditors will now have.
The changes to the Medical Tax Credits will only affect those excluded from the changes that were made in the previous year. These are for the employees over the age of 65 years and disabled employees. It will be imperative for the payroll administrator to know of these changes and the correct application of the income tax rules with regard to the Medical Tax Credits.
Payroll professionalism was also mentioned a number of times in the last year. Organisations like the South African Payroll Association are starting to recognise payroll professionals and are hoping to be able to accredit properly qualified payroll professionals. Moves are also afoot to ensure that government takes this into account and proposals have been submitted that government makes it compulsory for payroll administrators to have qualifications to deal with tax certificates and documents like the EMP201, EMP501 and employees’ tax certificates (IRP5 and IT3(a)).
In addition to these factors, the eToll saga is far from over. This may have an impact on payroll this year as companies decide whether or not to compensate their employees to assist with the higher expense. This will mean increase in salaries or allowances which in turn will mean increase in taxes. Payroll administrators will need to know the implications of the various forms this assistance from the company may take and how to deal with it effectively and lawfully.
The payroll departments in South Africa may still have other surprises to deal with this year. No-one can be sure what these are as yet. It is my opinion that payroll administrators will need to educate themselves properly in order to be equipped to properly manage these surprises. Companies may need to have the professional assistance from their consultants to ensure that their payroll departments remain compliant. Please contact LabourNet for any assistance or your regular payroll consultant.