Commencement of the Protection of Personal Information Act

The Protection of Personal Information Act (POPI) is South Africa’s legislation for the protection of individuals’ personal information against unethical use.

Despite being passed into law back in 2013, most of POPI has been waiting in the wings to be commenced. At the end of June 2020, the President announced that  1 July 2020 is the commencement date for the majority of the remaining POPI sections, with the exception of sections 110 and 114(4), which are to commence on 30 June 2021. 

This starts a one year grace period for businesses to ensure they are fully compliant. In this blog we will outline how SimplePay fits into the equation of POPI and our compliance with its requirements.

Overview of Organisations’ Responsibilities under POPI

POPI lists eight key principles with respect to the lawful processing of personal information, most of which can be grouped  into three broader categories. The first category relates to the collection of information, where the purpose for the collection should be clear and the accuracy of information ensured. The second category relates to the processing of information, where it can only be processed for the purpose it was collected, not for an expanded or additional purpose. The third category relates to security, where the information needs to have sufficient security measures to reduce the risk of data breaches.

The final principle that does not fit into the three above categories is accountability. POPI states that the responsible party needs to ensure that the conditions for lawful processing are met. 

Responsible Parties and Operators

The responsible party with respect to POPI is the public or private body or any other person which determines the purpose of and means for the processing of information.

An operator is a person or entity who processes information for a responsible party in terms of a contract or mandate, without coming under the direct authority of that party.

Putting this into context, you, the client are the responsible party for your employees’ (data subjects) personal information. SimplePay is acting as an operator for your benefit, processing your employees’ personal information in order to assist you in your payroll obligations. The relevance of this is that a party’s role determines their rights, obligations and liabilities.

An example of this is shown above, where the responsible party is obliged to ensure the conditions for lawful processing are met when determining the purpose of the processing.

SimplePay’s POPI Compliance

Even before it was required by law, SImplePay was already largely compliant with all our operational regions’ data protection laws, due to our underlying commitment to strict privacy and data handling practices. Since 2018, SimplePay has been fully compliant with GDPR, the EU’s equivalent data protection legislation, with which POPI shares many principles. This has resulted in SimplePay being compliant with POPI even before the official commencement of the Act.  

This means you can have peace of mind that the rights of you and your employees have always been, and will continue to be safeguarded by us. 

For greater detail on SimplePay’s compliance with POPI, you can visit the dedicated page on our website: www.simplepay.co.za/popi.

We hope that this information has proved useful to you. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected]. Equally, if you are not yet a client of SimplePay but would like to be, or if you’d like to know how we can take the effort out of filing and calculating payroll, get in contact with us or visit our website at simplepay.co.za.

Keep well and stay safe.

Team SimplePay

Annual Employer Reconciliation Period Deadline

With 31 May just around the corner, this blog is a friendly reminder that the Annual Employer Reconciliation Period deadline is fast approaching. As mentioned in our blog on 8 May, all the necessary changes were made to the SimplePay site at the start of this month, so all that is left is to jump in and complete your IRP5/IT3(a)s!

As mentioned in this previous blog, SARS has rolled out the Employer Tax Validation system for the first time, which will cross-check SARS calculated value for the SDL and PAYE amounts, with those submitted.

Despite the pandemic, SARS has made it clear that it will not be altering its policy on late submissions, meaning that if you do submit late, you could be subject to penalties of up to 10% the value of the payroll.

We hope that this information proves useful to you. If you have any queries on how the above relates to payroll and the SimplePay system, please feel free to get in touch with our customer support team at [email protected]

Keep well. Stay home. Stay safe.

TeamSimplePay

P.S. Individual Tax Returns: 

SARS has announced a delay in the deadline for Individual Tax Returns (ITR-12s) from its normal place in July, to September 2020. The online filing period for individuals in 2020 will prospectively run between 1 September and 16 November 2020.

Change in Tax Rules for Bargaining Council Funds

As of 1 March 2019, all contributions made by employers to funds provided by Bargaining Councils should be treated as a fringe benefit and are therefore subject to tax. These funds include, but are not limited to sick and holiday funds for employees that belong to the Bargaining Council. Note that if the fund administered by the Bargaining Council is a retirement fund, the taxation rules for retirement funds that are effective from 1 March 2016 (and that provide for a tax deduction to reduce the taxable benefit value) are applied.

In some instances, both you (the employer) and the employee contribute to the fund. The taxable fringe benefit is equal to your contribution and should now be reported on the IRP5/IT3(a) under the following new codes:

  • 4584: Employer contributions to a Bargaining Council Fund
  • 3833: Taxable benefit iro Employer contributions to a Bargaining Council Fund

Employee-paid contributions do not impact PAYE (they are not tax deductible) and therefore are not reported.

What action do you need to take?

If you set up these contributions using a Custom Employer Contribution item, you need to update this custom item on your payroll or Bargaining Council template to a Custom Benefit item.  This will ensure that the contribution is treated as a taxable fringe benefit.

A new checkbox has been added which allows you to indicate that the Custom Benefit item is a Bargaining Council Item. This ensures that the new tax codes are applied to the custom item.

If you have many companies and need to automate this process, please get in touch with our Support team to discuss possible solutions.

If you have any further queries, please do not hesitate to contact us.

Team SimplePay

2018 Employer Annual Reconciliation Filing Season

The 2018 Employer Annual Reconciliation filing season is now open. SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS and these are now available for the 2018 filing season.

You will have until 31 May 2018 to submit your Annual Reconciliation Declaration (EMP501) for 1 March 2017 – 28 February 2018 to SARS. This can be done via eFiling or the [email protected] application. You may need to update your [email protected] application to the latest version, 6.8.3. This can be done here. Please remember to back up your current information on your computer before installing a new version of [email protected]

For more information about the bi-annual filing process, refer to this help page. We also have a useful guide to take you through it step by step. The guide contains an important checklist which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]

In preparation for this filing season, we have done some system updates to further simplify the process for you:

  • Pre-validation updates:

We have added additional pre-validation measures to identify data errors are before filing with SARS.

  • Consolidated IRP5s / IT3(a)s

After liaising with SARS, we have updated the way we generate tax certificates for employees who are terminated – any information on once-off payslips created after their termination date are added to the tax certificate generated for their service period if the once-off payslip date falls in the same tax year.

As always, please feel free to contact us at [email protected] if you have any questions.

Team SimplePay

UIF Exclusion Update for Learners and Employees who Repatriate

With effect from 1 March 2018 and in accordance with the Taxation Laws Amendment Act of 2017, the following employee categories must no longer be excluded from contributing to UIF:

  1. Learners employed in terms of section 18(2) of the Skills Development Act
  2. Employees who intend to repatriate (return to their country of origin) at the end of their working period in South Africa.

 

This means that both (1) Learners and (2) Employees who intend to repatriate, must contribute to the Fund from 1 March 2018.

NB: The aforementioned categories of employees must contribute to the Fund, but will not be entitled to claim a benefit until the Unemployment Insurance Amendment Act changes become effective.

August 2017 Employer Interim Reconciliation Filing Season

The August 2017 Employer Interim Reconciliation filing season is now open and you have until 31 October 2017 to submit your Employer Reconciliation Declarations (EMP501s) for the period from 1 March 2017 to 31 August 2017, in respect of the Monthly Employer Declarations (EMP201s) submitted, payments made, Employee Income Tax Certificates [IRP5s / IT3(a)s] and ETI, if applicable.

You can refer to the SARS website for news about this.

Remember that we have a help page about the bi-annual filing process, as well as a guide – to take you through it step by step.

Please pay particular attention to the checklist in the guide, which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]

An updated version of [email protected] is already available, and it is very important that you use the latest version: 6.8.1. Please remember to make a backup of your current information on your computer before installing a new version of [email protected]

We are happy to inform you that we have already made all the necessary updates to the system that were required because of the changes SARS made for this filing season. You will now, once again, be able to generate an export file of your tax certificates on the Submissions tab and upload this file onto [email protected]

One notable change introduced by SARS is the increased reporting requirements for ETI, which include new and amended ETI source codes. Another consequence of the requirement for increased reporting on ETI is a slight change in the way tax take-on balances are captured – and some action might be required on your side.

When you do the pre-validation on our system (as described in the guide linked to above), you might get some IRP5 code errors – especially if you started using SimplePay after 1 March 2017 and if you already had employees who had qualified for ETI when you entered take-on balances.

Many of these IRP5 code errors should be resolved when you enter the additional ETI take-on information that SARS now requires. This should be done individually for all employees mentioned in the IRP5 code errors as follows:

  1. Go to the employee’s profile.
  2. Click on Take-On Balances under Actions on the right.
  3. Click on Edit Balances.
  4. Enter the monthly ETI Wage and ETI Hours information for the same months for which you had previously entered ETI Claimed and Remuneration information.
    • More information about ETI Wage is available here. Please note the distinction between remuneration and wage.
    • More information about ETI Hours is available here.
  5. Re-do the pre-validation and check that the IRP5 code errors related to ETI take-on information have been resolved.

As always, please feel free to contact us at [email protected] if you have any questions or need assistance in resolving the IRP5 code errors.

The SimplePay Team

2017 Employer Annual Reconciliation Filing Season

SARS has announced the dates of the 2017 Employer Annual Reconciliation filing season. This year it will run from 18 April to 31 May 2017.

Please note that this is slightly different from other years, where the filing season started on 1 April.

You will have until 31 May 2017 to submit your Annual Reconciliation Declarations (EMP501s) for the period 1 March 2016 to 28 February 2017, in respect of the Monthly Employer Declarations (EMP201s) submitted, payments made, Employee Income Tax Certificates [IRP5s / IT3(a)s] and ETI, if applicable.

An updated version of [email protected] should be available from 18 April 2017, so it is not advisable to attempt to do your filing before then. Please remember to backup your current information on your computer before installing a new version of [email protected]

Remember that we have a help page about this bi-annual filing process, as well as a guide – to take you through it step by step.

Please pay particular attention to the checklist in the guide, which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]

You can also refer to the SARS website for news about this.

As always, please feel free to contact us at [email protected] if you have any questions.

The SimplePay Team

2017 OID / Workman’s Comp Update

It’s that time of the year again – when you have to complete your Return of Earnings (ROE) or W.As.8. It is basically a declaration to the Compensation Fund of your employees’ earnings for the past year – in this case from 1 March 2016 to 28 February 2017 (the same as the tax year). In addition, you also provide projected earnings for the next year.

Although the official deadline is 31 March, this has been extended to 31 May, and the filing season for this year is 1 April 2017 to 31 May 2017.

As always, we at SimplePay try to make your life easier, and you are able to download a report from our system that will help you to complete your W.As.8. Simply go to Submissions > OID (Workman’s Comp) Return.

Our system has already been updated with the new maximum amount of earnings on which your assessment will be calculated. The maximum will increase from R377 097 to R403 500, with effect from 1 April 2017.

More information about the Compensation for Occupational Injuries and Diseases (COID) Act can be found on our help site.

If you are doing a manual submission, please ensure that you are using the latest version of the W.As.8, which can be found here.

Remember: your bi-annual SARS filing / reconciliation is also coming up soon, so if you get your ROE submission out of the way, it’s one less thing to worry about.

Please feel free to contact [email protected] if you need any assistance.

The SimplePay Team

2016 Retirement Reform

The 1st of March 2016 brought with it a number of significant changes that will affect employees with pension, provident and retirement annuity funds.  This legislation introduces a uniform tax treatment for all three of the above-mentioned funds (total taxable income deduction limited to 27.5% of income, with an annual cap of R350 000).

It also assigns retirement investments to two different categories: Defined Benefit (DB) schemes and Defined Contribution (DC) schemes. This distinction is important as it impacts the value of the fringe benefit arising from employer contributions:

  • Defined Contribution: the full value of the employer contribution
  • Defined Benefit: determined by means of a formula which uses a Category Factor

Employers should therefore contact their fund administrators in order to determine the nature of the fund. As a rule, all Retirement Annuity Funds will fall under the DC category with most Provident Funds doing the same. Pension funds could fall under either DC or DB. We would recommend that all employers with employees contributing to Pension or Provident Funds get in contact with the fund itself to ensure that the calculations are performed correctly. If it is a DB fund, and the fund has not issued a Contribution Certificate, employers should request this as a matter of urgency. This certificate contains pertinent information about the fund, including the Category Factor mentioned above. If applicable, the Category Factor should be entered into SimplePay when adding or updating a Pension or Provident fund item.

Our hard working code wizards have already made sure that SimplePay is fully up-to date with these new changes, and all you will need to do as a Payroll Administrator, is to input the appropriate category factor in the case of Defined Benefit funds.

As always, feel free to get in touch with our super helpful support team if you have any questions or concerns.

2016 Payroll Changes – Additional Medical Tax Credit

With the start of the new financial year looming ahead of us, lawmakers have been hard at work drafting legislative changes that will require Payroll administrators to keep their wits about them if they want to keep up.

To make your life easier, we make it our business to keep abreast of any and all changes that could effect how you process your payroll. In the coming weeks, we will be posting some of the most interesting changes that you should be taking note of, so be sure to check back regularly.

One of the most significant changes taking place in the upcoming financial year, is the introduction of the Additional Medical Tax Credit (AMTC).

This credit serves to give tax relief to employees who are over the age of 65, in the form of an increased Medical Tax Credit for each month.

As of 1st March 2016, employees aged 65 and up will be eligible to receive an additional reduction to the monthly amount of PAYE withheld to the value of 33.3% of the excess total contribution paid to the medical scheme that exceeds three times the regular Medical Tax Credit value. This Additional Medical Tax Credit will be reported separately from the Medical Tax Credit on the tax certificate.

For example:

An employee makes a monthly contribution of R1500 to his medical aid and has no dependents. The Medical Tax Credit in this case would be R270.

To calculate the Additional Medical Tax Credit, we first need to determine difference between 3 x R270 and the contribution. In this case the calculation would be as follows:

R270 x 3 = R810

R1500 – R810 = R690

R690 x 33.3% = R229.77 Additional Medical Tax Credit

This employee would then receive a total tax credit tax credit to the value of:

R270 (Medical Tax Credit)
+ R229.77 (Additional Tax Credit)
= R499.77 (Total Medical Tax Credit)

You’ll be glad to know, that our development team has been hard at work in order to ensure that this feature will be ready to go from the first of of March, with absolutely no additional input required from your side.

As always, if you have any comments or concerns, feel free to get hold of us in the comments or through our super helpful support team 🙂