UIF Reform Postponed

In February, the Finance Minister announced a proposed reform that would see the UIF earnings cap reduced to R1000. This essentially means that no matter how much anyone earns, UIF deductions would only be calculated from a maximum amount of R1000.

In other words only 1% of R1000 would be deducted from an individual’s salary – R10! Added to that, should anyone earn below R1000 then only 1% of that pay would be reserved. Whereas currently for a person earning R5000, the UIF deducted would be R50. It is clear to see that this proposed plan would be favourable  to every employee and employer. Employers are also required to put up an equivalent UIF amount for each worker, thereby making the overall contribution 2%.

The minister faced opposition and a result this reform has now been postponed to provide time for further public consultation.

A new effective date has not been specified but it is unlikely to be any sooner than a year’s time.

As always, please contact us if you have any questions.

Kind regards

SimplePay
https://www.simplepay.co.za

Updates in SimplePay for the 2015/2016 Tax Year

We are pleased to announce that SimplePay clients are once again some of the first to be informed of the relevant changes for the new tax year.   As from 01 March 2015, your payroll will automatically meet all the requirements for the 2015/2016 period, as announced in the 2015 Budget Speech on 25 February 2015.

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

As expected, that tax tables have changed with inflation, with tax rates increasing by 1 percentage point for individuals earning R181 901 and above.

  • 2015/2016 Tax Rates:
Taxable Income (R) Rate of Tax (R)
0 – 181 900 18% of taxable income
181 901 – 284 100 32 742 + 26% of taxable income above 181 900
284 101 – 393 200 59 314 + 31% of taxable income above 284 100
393 201 – 550 100 93 135 + 36% of taxable income above 393 200
550 101 – 701 300 149 619 + 39% of taxable income above 550 100
701 301 and above 208 587 + 41% of taxable income above 701 300

The primary rebate has increased from R12 726 to R13 257.

The tax threshold has also increased from R70 700 to R73 650

The medical aid tax credit has increased as follows:

  • The tax credit for the main member plus first dependent has increased from R257.00 to R270.00 per month.
  • For every additional dependent, the tax credit has increased from R172.00 to R181.00 per month.

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

  • The allowance for incidental costs within South Africa has changed from R103.00 to R109.00.
  • The allowance for meals and incidental costs within South Africa has changed from R335.00 to R353.00.

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

If you have any questions relating to the above changes, you are welcome to contact SimplePay support to assist you with these queries.

The SimplePay Team

Employer filing season starts on 01 April 2014

Important date to remember!   The employer filing season for EMP501 submission starts on 01 April 2014 and will run until 30 May 2014.  SimplePay has done the updates to comply with the new [email protected] layout.  Changes you need to know:

– The new SIC (standard industrial classification) codes have been implemented.  You can now setup your company with your specific industry information.

How to do this setup:

In your payroll, go to settings and select the ‘Employer filing details’ option.  You will be required to fill in the company information required by SARS, as well as the new industry classification codes.  Important, your SIC code needs to be 5 digits!  But don’t worry, SimplePay has already done most of the work, you just need to select the correct options!

If you would like more assistance in setting up your SIC codes, and also a help guide to do your annual reconciliation and submission, follow the below link to visit the help section.

The SimplePay team.

Changes in SimplePay for the 2014/2015 tax year

We are pleased to announce that all SimplePay clients can now see what the changes are that have been made to SimplePay for the 2014/2015 financial year.  As from 01 March 2014, your payroll will automatically meet all the legislative requirements, as announced by Pravin Gordhan, the Finance Minister in South Africa.

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

– As expected, that tax tables have changed with inflation, and below you will see the tax table for the year ending 28 February 2015:

Taxable Income (R) Rate of Tax (R)
0-174 550 18% of taxable income
174 551 – 272 700 31 419 + 25% of taxable income above 174 550
272 701 – 377 450 55 957 + 30% of taxable income above 272 700
377 451 – 528 000 87 382 + 35% of taxable income above 377 450
528 001 – 673 100 140 074 + 38% of taxable income above 528 000
673 101 and above 195 212 + 40% of taxable income above 673 100

 

– The tax threshold has changed from R67 111-00 to R70 700-00.

– The medical aid tax credit has increased as follows:
* The tax credit for the main member plus first dependent has increased from R242-00 to R257-00 per month.
* For every additional dependent, the tax credit has increased from R162-00 to R172-00 per month.
It is important to note that employees 65 years and older will now also receive a tax credit on their medical aid. The medical tax credits amounts for employees who are 65 or older will be exactly the same as the tax credits for employees who are younger than 65.

– The ‘tax free’ portion for subsistence allowance has increased as follows:
* The allowance for incidental costs within South Africa has changed from R98-00 to R103-00.
* The allowance for meals and incidental costs within South Africa has changed from R319-00 to R335-00.
It is important to note that the subsistence allowance is only a guideline as provided by SARS, and is not enforced as per legislation.

– The OID limit has increased to R312 480-00 for the 2013/2014 year, and the 2014/2015 OID limit has been increased to R332 479-00.

If you have any questions to the changes that were made in legislation, you are welcome to contact SimplePay support to assist you with these queries.

The SimplePay Team

Employment Tax Incentive Functionality

We’re proud to announce we’ve now incorporated support for ETI (Employment Tax Incentive, a.k.a. Youth Wage Subsidy) in the system.  You can (and should) read more about it in the Employment Tax Incentive section of our online help.

If you’ve already submitted your EMP201 for January but have employees that qualify for ETI, we’d suggest submitting an amended EMP201.  If you’ve finalised the January EMP201, you should see a newer draft version on the Submissions tab, but only if the system calculated ETI for Jan.

Loads of New Features!

As usual, we’ve been hard at work adding new features to the system over the past few months, but haven’t gotten around to telling you about all of them yet. So, without further ado:

  • Improved Maternity Leave Function: A subtle improvement. Now, the employee can be re-instated without losing the historic status indicators on the UIF declarations. And the payslip date will automatically be moved forward to the first available date after returning to work.
  • Payroll admins can now approve leave requests: Previously, only another employee could approve leave. However, since in many companies the employee responsible for approving leave is also a payroll admin, this makes sense.
  • Better handling of paying out leave for weekly workers: After paying out multiple weeks of leave for a weekly worker (which is accomplished by overriding the end date of the payslip), the system will now default to the correct next payslip period corresponding to when the employee returns from leave.
  • Added Nedbank CSV EFT Format: Depending on how your internet banking is set up, this may be the preferred format for you to use.
  • Option to print residential address on payslips: Some clients asked for this so that employees can use payslips for proof of residence. This may or may not be acceptable depending on the institution requiring the proof.
  • Option to print pay point on payslip
  • Xero: Assigning pay points to Xero tracking categories
  • Custom deductions / contributions can now be calculated as a % of income

Please keep the suggestions coming. And as always, please contact us if you have any questions.

UIF Limit Increased

From 1 Oct. 20012, the annual limit for income subject to UIF contributions has increased from R149,736 to R178,464. That results in a new monthly limit of R14,872 and a weekly limit of R3,432.

Employees who have always earned less than the old limit (monthly R12,478), will not see any difference, they will still have the 1% deduction + 1% company contribution. However, those earnings more than the limit will see theirs increase from R124.78 per month to as much as R148.72 per month.

Interest Rate Change and New Features

Due to the recent drop in interest rates by the reserve bank, the fringe benefit interest rate on low or interest free loans will now be 6% instead of 6.5%.

Once again there are some features that have been released but not announced yet:

  • Vastly improved reinstatement: If an employee has left your company, possibly works for someone else, but later returns, you longer have to capture them as a new employee as with most payroll systems. Just re-instate them and the system will start a new service period for them.
  • Skills & Equity: You can now enter demographic info used for EE and Skills reporting. The reports are coming soon, but at least you can get started on getting the data ready.

New Features: Bulk input for recurring items and pay-point permissions

We’ve added 2 new features that you may find useful. The first is bulk input of recurring items, such as basic salary / hourly rates, which was previously only available for periodic items such as hours worked.

The second is the ability to grant other users access to administrate only certain pay-points within a company – previously you could only grant another user access at the global or company level.