Updates in SimplePay for the 2020/2021 Tax Year

As we enter the new tax year on 1 March, we’d like to remind you that there is no need to do a manual year end as in other payroll systems – simply continue processing payslips into the new tax year.

When you need to do your filing, the correct period will automatically be used and the relevant documents will be generated. For more information, please see our help site.

In addition, our system has already been updated in order to ensure that you are always compliant. We are pleased to inform you that as from 1 March 2020, your payroll will automatically meet all the requirements for the 2020/2021 period, as announced in the 2020 Budget Speech on 26 February 2020. If you are still processing payroll for the 2019/2020 tax year, the old tax tables will still be used, as you’d expect.

Here are some of the most important changes that you will see in your payroll for the coming year:

2020/2021 Tax Rates

The tax rates for individuals have remained the same as last year, with the tax brackets, thresholds and rebates increasing.

Taxable Income (R)Rate of Tax (R)
0 – 205 90018% of taxable income
205 901 – 321 60037 062 + 26% of taxable income above 205 900
321 601 – 445 10067 144 + 31% of taxable income above 321 600
445 101 – 584 200105 429 + 36% of taxable income above 445 100
584 201 – 744 800155 505 + 39% of taxable income above 584 200
744 801 – 1 577 300218 139 + 41% of taxable income above 744 800
1 577 301 and above559 464 + 45% of taxable income above 1 577 300

The tax threshold has increased from R79 000 to R83 100 because the primary rebate has increased from R14 220 to R14 958.

Medical Aid Tax Credit

The medical aid tax credit has increased as follows:

  • The tax credit for the main member and first dependant has increased from R310.00 to R319.00 per month.
  • For every additional dependant, the tax credit has increased from R209.00 to R215.00 per month.

Subsistence Allowance

The ‘tax free’ portion for the subsistence allowance** has increased as follows:

  • The allowance for incidental costs within South Africa has changed from R134.00 to R139.00.
  • The allowance for meals and incidental costs within South Africa has changed from R435.00 to R452.00.

**It is important to note that the subsistence allowance is only a guideline provided by SARS and is not legislated.

Travel Allowances

  • The rate per kilometer for reimbursive travel allowances has increased to 398 cents.
  • The rates per kilometre which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are outlined in the following SARS table:
Value of the vehicle (R)Fixed cost (R p.a.)Fuel cost (c/km)Maintenance cost (c/km)
0 – 95 00031 332105.837.4
95 001 – 190 00055 894118.146.8
190 001 – 285 00080 539128.351.6
285 001 – 380 000102 211138.056.4
380 001 – 475 000123 955147.766.2
475 001 – 570 000146 753169.477.8
570 001 – 665 000169 552175.196.6
665 001 and above169 552175.196.6

Foreign Income Exemption

A cap of R1.25 million per year has been placed on the exemption of foreign income earned by South African tax residents. Any foreign employment income earned over and above R1.25 million will be subject to tax for the particular year of assessment.

No changes were announced for the common payroll components of UIF and SDL.

If you have any questions relating to the above changes, you are welcome to email us at [email protected] to assist you with these queries.

The SimplePay Team

National Minimum Wage Increase

The national minimum wage rates, as specified in the National Minimum Wage Act, will increase by 3.8% from R20 per hour to R20,76 for employees. This minimum wage increase will be effective from 1 March 2020.

This means that the hourly rate will need to be changed for employees who are currently earning a wage lower than R20,76 per hour. To review or edit the hourly rate for employees, go to Employees > Bulk Actions > Regular Inputs and select “Basic Salary” and “Hourly Paid” under Filters.

This increase in the hourly rate will also mean an increase in the leave pay for hourly-paid workers as they will be paid extra when paid leave is taken. More information on leave pay can be found on our help site here.

Remember that a change in the ordinary hourly wage will also impact the rate for Sunday pay and public holiday pay. For more information on these, refer to our help page here.

Specific groups of workers will also have an increase in their national minimum wage of 3.8%, as shown below:

  • Farm workers: R18,68 per hour
  • Domestic workers: R15,57 per hour
  • Public works program: R11,42 per hour

Learnership Allowances

The learnership allowances per week for learners specified in Schedule 2 of the National Minimum Wage Act have also increased and come into effect on 1 March 2020. Please refer to page 2 of the Government Gazette found here for the allowances.

If you have any further queries regarding the impact of this Act on your payroll and on the system, please do not hesitate to contact us.

Team SimplePay

Parental, Adoption and Commissioning Parental Leave

South Africa’s new parental, adoption and commissioning parental leave have officially been signed into law effective 1 January 2020. These new leave types, considered by many as a historic victory for parents, children and families, cater for new parents who do not qualify for maternity leave. This includes fathers, adopting parents and those undergoing surrogacy.

Parental Leave

New parents, other than the mothers giving birth, are entitled to 10 consecutive days of unpaid parental leave once per year when their children are born. If they are a contributor to UIF, they will also have a right to claim for parental leave. They will no longer be allowed to take Family Responsibility Leave for the birth of a child.

Adoption Leave

Adoption leave applies to those adopting a child under the age of two. One parent will be entitled to 10 consecutive weeks of unpaid Adoption Leave, while the other parent will be entitled to Parental Leave (as discussed above).

Commissioning Parental Leave

This leave applies to parents using a surrogate. The primary caregiver will qualify for 10 consecutive weeks’ of unpaid Commissioning Parental Leave, while the other parent will be entitled to Parental Leave (as discussed above).

There are currently no UIF benefits for Adoption and Commissioning Parental leave. These will only come into effect 1 April 2020.

Capturing on SimplePay

To capture this correctly on SimplePay, terminate the employee by ending their service on the system and use an appropriate UIF Code. The following UIF codes have been added for these new leave types:

  • UIF Code 18: Commissioning Parental
  • UIF Code 19: Parental Leave

For additional information and assistance, consult the following help pages:

Team SimplePay

Interest Rate Change for Employer Loans

The South African Reserve Bank has decided to decrease the repurchase rate (repo rate) by 25 basis points, effective from 16 January 2020.

The official interest rate used for calculating the fringe benefit on low or interest free loans to employees is set as 100 basis points above the repo rate. This means that the interest rate used for calculating the fringe benefit on employer loans decreases from 7.5% to 7.25%, effective 16 January 2020.

If you’re a SimplePay user, you do not need to take any action to implement the new interest rate, as we have already updated our system to reflect these changes. Therefore, all payslips dated and finalised from 16 January onwards will use the new interest rate. If a payslip dated after 16 January was finalised before the 16 January (i.e. it was finalised in advance), you will need to unfinalise the payslip and then finalise it again for the changes to take effect. As we have built our system to be intuitive, the previous interest rate will be used if you are still preparing payslips dated before the 16 January, regardless of what date you physically finalise the payslip.

If you are unsure of how to capture employee loans or calculate the fringe benefit on them, refer to our help page here.

Team SimplePay

Year in Review and Price Adjustment

As 2019 (and the decade) draws to a close, we’d like to thank you for choosing SimplePay as your payroll software provider. We really value the loyalty, ideas, feedback and love that we get from you, our clients.

We would also like to take this opportunity to reflect on the year that has been and share some important information with you. 

In January, our annual price adjustment will come into effect. As always, this will be an inflationary-related increase, which allows us to maintain the quality of our product and the service that we offer. Our current prices are available here – we will send out a notice in January to alert you of the new prices.

When looking back on 2019, it was certainly a year of growth for our team, which led to the fantastic accomplishment of being nominated as a Xero App Partner of the Year. Some of the major features and functions that we accomplished were:

  • Custom items based on system items, and the subsequent expansion of this feature
  • Custom employee fields in Basic Info
  • A new leave days report
  • Customisation of employee self-service
  • Bulk actions for once-off payslips and overriding payslip end dates
  • Leave expiration
  • QuickBooks integration upgrade
  • Automatic logout for idle accounts

In 2020, you can expect the team to continue striving to enhance your payroll experience. As always, all added features are completely free for all and do not change the monthly fee that you pay.

From all of us here at SimplePay, have a joyful festive season. We are looking forward to a great 2020 together!

Team SimplePay

Automatic Logout Feature

We are happy to announce a new security feature as part of our ongoing commitment to protecting your data and helping you stay safe online. We already have the highest of security standards in place, and last year we introduced an optional 2-factor authentication feature to prevent access to your account if someone has your password. Now, our optional timeout feature allows you to choose how long the system can be left idle for before automatically logging you out of SimplePay.

With this new feature, if you forget to log out of SimplePay, the next person that uses that computer or electronic device will not have access to your account. This is especially beneficial to you if you share computers in the workplace, if you work on public computers or if you are concerned that someone will use your electronic device when you leave it unattended.

To access this feature:

  • Go to the Profile icon and select User Profile
  • Click on Lock screen after timeout
  • Select a timeout option:
    • If you select ‘Disabled’, you will not be logged out of the system, no matter how long a page has been left idle for.
    • If you select a time from the menu (e.g. ‘1 hour’), it means that the system will log you out if there has been inactivity for the time specified.
  • Click Save

Just another way that SimplePay is helping you take care of your sensitive employee data.

Team SimplePay

QuickBooks Integration Upgrade

As the year draws to a close, our holiday elves have been bustling behind the scenes to enhance your payroll experience, focusing on our QuickBooks integration. SimplePay integrates with both QuickBooks and Xero, allowing you to send your payroll information straight from SimplePay into your general ledger accounts with the click of a button. This means that you do not have to switch between systems to transfer information, saving you time and reducing the possibility of human error.

You’ll be happy to hear that our QuickBooks integration has been refined to give you an upgraded user interface and setup. These improvements will make the process easier to navigate and simpler to understand if you wish to integrate your payroll and accounting information.

If you have already integrated QuickBooks and SimplePay in the past, please note that you may be required to re-authenticate your account due to the work done behind the scenes.

For more information on integrating SimplePay with QuickBooks, head on over to our help page.

Team SimplePay 

Expansion of Custom Items Based on System Items

In March 2019 we announced a new feature that allows you to create customised items that follow the same tax and payroll rules as certain system items. It proved to be so popular amongst you, our users, that there were requests to allow for more system items to be customised. We’re happy to say that we have now expanded this feature to also include the following items:

  • Provident Fund
  • Subsistence Allowance Local
  • Subsistence Allowance International
  • Travel Allowance

Remember, this feature allows you to:

  1. Create multiple items of a certain type
  2. Customise the names of these items
  3. Map different versions of a specific type of item to different Xero accounts

How does it work?

When creating a custom item (Settings > Custom Items > Add), there is an option to select create a copy of an existing system item. Select the system item that you wish to use and give it a custom name. You can then add it to your payslips in the same way you would the system item of that type (Regular Inputs or Payslip Inputs).

Read our help page here for more information on creating custom items.

If you need assistance on this, please reach out to our support team who would be happy to help.

Team SimplePay

We’re App Partner of the Year Finalists


SimplePay is delighted and proud to announce that we have been chosen as a finalist for the App Partner of the Year: South Africa for the Xero Awards taking place in March 2020. Xero is the leading cloud-based accounting software in the market and we are honoured to be recognised for our integration and synergy.

As SimplePay uses the same approach to Xero integration in all our regions, you can be assured that you are receiving the same quality features no matter what region you are in. We aspire to be finalists in all regions when these awards are announced in the future. 

A huge thank you to our wonderful team. Your dedication and commitment to making SimplePay the best cloud-based payroll system for our customers has made this possible. And of course, an even bigger thank you to our customers. Without your support, loyalty and feedback, we wouldn’t be what we are. We look forward to continuing to serve your payroll needs.

To find out more about SimplePay’s integration with Xero, head over to our help page here.

Team SimplePay

New Feature: Employee Leave Expiration

Introducing the latest system expansion from the SimplePay team: employee leave expiration for leave days carried over.

With our aim to give you the ultimate payroll experience, you can now customise your leave settings even further by specifying how long leave carried over from a previous
leave cycle remains valid for. For example, you might have a policy that any unused leave from 2019 may carry over to 2020, but if it is not used by the end of June 2020, it will expire and be forfeited.

This is usually done to ensure that your employees’ leave does not excessively accumulate and aligns with the BCEA, which requires leave to be taken within 6 months of the end of a cycle. In addition, by prompting employees to take their leave in due course, it leads to increased employee well-being which has long-term benefits for both employees and the company. Before implementing this on the system, ensure that it aligns with your company’s leave policy and your employees’ contracts to avoid any labour disputes.

To make use of this new feature on current policies, follow these easy steps:

  1. Go to Settings > Leave.
  2. Click on View next to the leave type that you wish to edit.
  3. Under Available Entitlement Policies, click on View next to the entitlement policy that you wish to edit.
  4. If the Allow leave to be carried forward to next cycle? checkbox is set, there will now be an additional line that appears under it.
  5. In the new field , enter the number of months that leave must be held for before expiring.
  6. Click Save.

If you are creating a new leave policy, you will be able to follow the same process when creating the entitlement policy.

For more information on creating and editing leave entitlement policies, head over to our help page here.

Team SimplePay