MARCH 2015 LABOURNET NEWSLETTER
How the first quarter of 2015 has flown by! We do trust that so far it has been a good one for you and your organisation.
By now the fun and festivities of the December holidays have faded into the distance and what lies ahead is tax year end procedures and recons, tax certificates, EMP501’s and the like – fun stuff !
Nevertheless all of this is part of our profession so we simply have to get on with it.
With the recent budget speech and all the very important changes that need to be implemented in our organisations to ensure compliance, it is not uncommon for Employers to feel a little overwhelmed at this time, particularly with the fact that some of us will have to pay in a bit more tax this year. We trust that this Newsletter will provide you with a quick reminder and checklist of all the items you need to take note of to kick start the new tax year.
Given the highly publicised shortfall in income VS expenditure anticipated by the National Treasury this year the spotlight has definitely shifted to further enforce compliance by individuals and Employers across the board. There will be greater emphasis on collecting outstanding taxes and penalties via the AA88’s process by pressuring Employers to ensure that these are dealt with accurately and timeously, so watch this space. The end goal being - the collection of more taxes!!
Finally, we would like to once again wish you all the best for the 2015 year and remind you that should you need us through this stressful time we are only a phone call (or email) away
WHAT EFFECT WILL THE BUDGET SPEECH HAVE ON YOUR POCKET?
This year’s budget speech from Finance Minister Nhlanhla Nene has resulted in a few potential changes to the way a company must administer their Payroll and HR Department. Are you ready?
Needless to say some of the items in the Budget Speech did not sit well with taxpayers, unions and the opposition benches. For instance, this is the first time in 20 years that there has been a tax increase for individuals, an increase which mainly impacts the individuals at the upper end of the earnings table. Hopefully this is not a sign of things to come. On the other hand though, and as has become customary over the years, those taxpayers at the lower end of the earnings table again this year still managed to get some relief.
Some of the other payroll related items that you would need to know about include:
Tax Tables – PAYE for those individuals earning above R450 000 p/a has been increased by about 1% whilst slightly lower taxes will be enjoyed by those at the lower end of the earnings table (i.e. below R 450 000 p/a). Also – it not good news for those in the much higher earnings bracket where the marginal rate has now increased to 41%. This is the first time in 20 years that we have seen an increase in taxes – hopefully this is not a trend that will continue.
Medical Aid Tax Credits – With the tax table changes we have seen some relief granted to those employees who belong to a medical aid. The tax credits on medical aid have been increased for all members and dependants.
UIF – A surprise announcement regarding a potentially huge reduction in the monthly contribution for both employers and employees has left many companies somewhat puzzled. This large reduction in the UIF contribution was announced but no effective date or rules were mentioned, other than that the reduction would only be for this tax year. The impact of this change is enormous for weekly paid employees and the implementation of a change like this is not an easy task for the payroll department. Nevertheless let’s wait and see what further official announcement is made regarding this, before we do anything.
Tax Free Savings Accounts – Tax Free Saving accounts are now officially in full force. Being a new initiative very few employees or employers really know how these tax free savings accounts and a Retirement Annuity/Pension Fund compare in the long term, and which will therefore provide the most benefit. There will be lengthy debates and analysis of this topic during the coming months so keep an eye on press releases from the various financial institutions who will hopefully make sense of this.
COIDA – A very significant change has taken place with the administration of COIDA. Department of Labour has announced that Rand Mutual Assurance’s licence has been extended to include Class 13 employees. This means that all Class 13 employers will be transferred to RMA. This is a significant change for all Class 13 employers and it will have to be implemented cautiously to avoid penalties. The Compensation Fund has also announced that the due date for your W.As 8 return has been extended from 31 March 2015 to 31 May 2015.
The W.As 8 form stays unchanged with only the earnings threshold being increased to R332 479 for the new year.
Please CLICK HERE for the full March newsletter.
For any queries contact the LabourNet Helpdesk on 0861 LABNET / 0861 522 638.