Budget Speech – 24 February 2021

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.

Our system will be up to date in time for next month in order to ensure that you are always compliant. We are pleased to inform you that from 1 March 2021, your payroll will automatically meet all the requirements for the 2021 / 2022 period, as announced in the 2021 Budget Speech on 24 February 2021. If you are still processing payroll for the 2020 / 2021 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:

2021 / 2022 Tax Rates

The tax rates for individuals have remained the same as last year. However, government has increased the personal income tax brackets by 5% on average, which is above the rate of inflation (this being approximately 4%). In other words, all individual taxpayers will pay less income tax this year than in the previous year. 

Taxable Income (R)Rate of Tax (R)
1 – 216 20018% of taxable income
216 201 – 337 80038 916 + 26% of taxable income above 216 200
337 801 – 467 50070 532 + 31% of taxable income above 337 800
467 501 – 613 600110 739 + 36% of taxable income above 467 500
613 601 – 782 200163 335 + 39% of taxable income above 613 600
782 201 – 1 656 600229 089 + 41% of taxable income above 782 200
1 656 601 and above587 593 + 45% of taxable income above 1 656 600

All three categories of tax rebates (under 65 years old; 65 – 75 years old; and over 75) have increased by 5% from the previous year to the current year under the budget. 

The tax threshold has increased from R83 100 to R87 300, translating to the primary rebate increasing from R14 958 to R15 714. 

In addition to the primary rebate, the secondary rebate and tertiary rebates have been increased to R8 613 and R2 871 respectively. 

Medical Aid Tax Credit

The amount that can be deducted due to medical aid tax credit has increased as follows:

  • The tax credit for the main member and first dependant has increased from R319 to R332 per month.
  •  For every additional dependant, the tax credit has increased from R215 to R224 per month.

UIF Contributions

The Unemployment Insurance Fund (UIF) contribution ceiling was announced to be increasing from R14 872,00 to R17 711,58 per month. UIF is calculated as 2% of an employee’s remuneration for UIF purposes, split equally between the employer and employee. Remuneration for UIF purposes is the employee’s remuneration, less certain exclusions such as commission. Under the budget speech, the maximum UIF contribution for each party is, therefore, R177,11 a month (R354,22 in total). 

Despite the announcement in the budget speech of this proposed change, for it to be effected, the alteration to the monthly UIF contribution limit needs to be published in the Government Gazette. Therefore, this change is not yet effective and shouldn’t be reflected on payroll.

The SimplePay Team has received confirmation from a reliable source that the UIF contribution ceiling change will be postponed. As such, we will continue to apply the original UIF contribution ceiling threshold of R14 872 until such a time as the increase has been confirmed to be effective. 

Subsistence Allowance

The ‘tax free’ portion of Subsistence Allowance* has remained unchanged at R139,00 for incidental costs within South Africa, and R452,00 for meals and incidental costs within South Africa.

*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 kilometre for reimbursive travel allowances remains unchanged at 398 cents (R3, 98).
  • 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

Non-Payroll Related

Section 12J Tax Incentive

The scheme, introduced in 2008 and which allowed taxpayers to invest in start-up companies in lieu of paying income tax, is set to expire on 30 June 2021. You can find more information on the rationale behind the winding up of this incentive on pages 48 and 49 of the budget speech

We hope that this information has proved useful to you. If you have any questions on how the information provided relates to SimplePay, you can contact us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

National Minimum Wage Increase

Our blog post today covers the recently Gazetted national minimum wage increases, due to come into force on 1 March 2021. The changes bring an increase in the minimum wage for both the sector-specific wages and the national minimum wage.

The minimum wages from 1 March will be as follows:

National Minimum WageR21.69
Farm Workers Minimum WageR21.69
Domestic Workers Minimum WageR19.09
Public Works Program Minimum WageR11.93

Please note also that the minimum wage for Learners has been increased by 4.5% across all NQF levels.

The minimum wages for farm and domestic workers have significantly increased in comparison to last year (see 2020’s blog post), reflecting the Government’s aim to equalise all minimum wages over time.

Should any of your employees be on or near the current minimum wage, you should increase their hourly rate to at least meet the above amounts from next month. This is particularly important if you are benefiting from ETI for those employees, as this is a requirement to qualify for the incentive and the penalties for breaching the rules are severe.

As you know, we like to make your payroll a breeze. If you want to quickly check all your employees’ wages in one go, simply navigate to:

  • Employees > Bulk Actions > Regular Inputs (under Payroll Inputs)
  • From the dropdown boxes, select “Basic Salary” and either “Hourly Paid” or “Salaried”
  • Your employees and their hourly rate / salaries will be listed for you to review and amend as you deem necessary.

We hope that this information has proved useful to you. If you have any questions for us, you can contact us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

New Feature: Give Admin and Leave Admin Users Read-only Access

Unlike many other payroll systems, SimplePay does not charge for or restrict the number of users on the system. This means that you can give system access to all the people that need it, whether this is a department head who approves leave, a payroll administrator who processes payroll or an external accountant who completes filing submissions. While our user settings already have a range of roles and restrictions that you can configure, we’ve had several requests for giving users read-only access to the system. 

We are delighted to announce that we’ve upgraded our permissions to enable you to give users read-only access, with extensive flexibility that lets you customise this on a company, pay frequency or pay point level. 

When adding a user, you can still select their permission role (e.g. Leave Admin) and restrict them to specific companies, pay frequencies or pay points. However, when restricting users with Admin or Leave Admin roles, you can select the type of access for each company, pay frequency or pay points, namely:

  • Full: gives the user full access to the areas of the system as defined by that particular role
  • Read-only: gives the user read-only access to the areas of the system as defined by that particular role
  • None: gives the user no access

For more information on setting up users with read-only access, refer to our help article here.

We hope that you love the new feature! Please reach out to us if you have any trouble setting up users or if you have any further questions.

Team SimplePay

New Feature: Bulk Assign Leave Policies

Happy new year! We hope that 2021 brings you new opportunities, improved performance and overall success in all your endeavours. As always, we’ll support you with an efficient and effective payroll system. We’re kicking off the new year with a brand new feature – you can now assign leave policies to employees in bulk.

SimplePay’s leave functionality allows you to set a company default leave policy for all employees that are added to the system. You can then assign a different leave policy to employees if they are not on the default policy. Being able to assign leave policies now in bulk saves you time if you have many employees who are not on the company default policy. It is also useful for companies who do not have a single company default policy, but rather separate policies per pay point or pay frequency.

Once you have created your leave policies, you can assign them in bulk as follows:

  • Go to Employees > Bulk Actions
  • Click on Entitlement Policies under the Leave heading
  • Use the filters to select only those employees that are part of a specific pay point or pay frequency
  • Use the drop-down menus to allocate the leave policies for each leave type for each employee on the page. If all employees on the page are on the same policy, use the Copy first value down option to save you time.
  • Click Save

It’s as simple as that. For more information on leave management and bulk leave actions, refer to the following pages:

Team SimplePay

TERS Updates for September October Applications

Update 1 December 2020: Minister Nxesi has announced that the September / October TERS period will be the last of the scheme. To read the Government Gazette, follow this link.

Hello and welcome to another TERS update blog post. Our information today is taken from the UIF’s most recent update letters, which announced a post-verification audit and highlighted an issue with some applications for the most recent application period. You can read more about the 16 September to 15 October TERS application period in this recent blog post

Post Verification Audit

The UIF has announced that audits of the TERS process will begin from 1 December 2020 and will last for an estimated period of six (6) months. The audits are to be completed by a number of named companies with expertise in this area. This is in line with the Memorandum of Agreement you signed to be able to partake in the TERS scheme.

The UIF requests that you keep at least the following information readily available in hard or electronic format in case you are contacted:

  • UIF COVID TERS application pack 
    • There should be an application pack for each period which you applied to, containing the documents which you submitted;
  • Bank statements relating to your COVID TERS application(s);
  • Each employee’s HR file;
  • *Payroll report from 1 January 2020 to July 2020;*
  • Proof of payment to your employees; and
  • Proof of any refunds to the UIF (if applicable).

*Thankfully, by using SimplePay all of your payroll information is in one centralised location! We hope that this helps you with any prospective bookkeeping which may follow.

NOTE: The information listed above contains personally sensitive information for both you and your employees. Because of this we would recommend that you verify the credentials of anyone who may contact you in this respect.

Issue with SOME September / October TERS Applications

The UIF has announced that some applications received for the 16 September to 15 October period, submitted before 10AM on Wednesday 25 November 2020 did not meet their system’s requirements. As a result, they have been rejected and if this applies to you, you will need to resubmit. The UIF won’t notify you if you fall within this set of applications, so if in any doubt you should check your application status.

This issue does not apply if you applied using SimplePay’s CSV, but if you have made applications manually, this may affect the employees for whom this was done. 

Whether you submitted via CSV or manually, we recommend you log in to your TERS profile and look for the September / October applications in the Saved Employees section. If your applications appear then your submission is deemed to be correct and you don’t need to resubmit. 

If you cannot find your applications for the September / October period, you must resubmit for your employees to receive TERS benefits for this period.

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, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

ETI Refresher and Employer Reconciliation Recap

The calendar’s page has been turned over to November, which means that for the vast majority of you, the interim filing season is done and dusted! Our blog post today contains a refresher on ETI balances and the effect of tax periods on them, in addition to a polite reminder for any clients still to complete their filing.

Carrying Forward Unutilised ETI 

You may remember that as part of the Government’s response to COVID-19, ETI was adapted to increase both the number of eligible employees and the amount claimable per employee. Due to the scheme’s increased uptake, we thought it would be helpful to give you a brief refresher of some important points.

Under the rules that govern ETI, if your total ETI for a certain month is greater than your overall PAYE liability, you can have the balance rolled over to the following month(s). This roll-over is only allowed within any one six (6) month tax period – March to August and September to February, after which any unutilised ETI which you haven’t claimed as a payout from SARS is forfeited. As the extended COVID-19 ETI ran for the months of April to July 2020, these all fell within the last bi-annual filing period of March to August. Therefore, from August the usual roll over rules applied, meaning that any unutilised ETI is not rolled over, but should rather be claimed as a refund from SARS.

SARS has stated that despite the challenging circumstances brought about by the pandemic, these rules stand and that any ETI balance that you may have held will not be extended beyond the 31 August cut-off point. Despite this support measure no longer being available, we hope that the lesser restrictions means your business continues to regain a sure footing.

We’d also like to take this opportunity to remind you of the importance of correct and timely ETI submissions and claims, as the penalties for non-compliance can be severe. For more details, check out our ETI help pages.

Filing Reminder

Having gotten through another interim filing period, we hope that our continued endeavours to make payroll a breeze has made this filing season the smoothest yet for you! If you have not yet filed your EMP501 and IRP5 / IT3(a)s, the deadline was the end of October. We urge you to complete your filing as soon as possible, as the sooner you do this, the lesser the prospective penalty for late submission. If your EMP501 remains outstanding for several months, you could face a maximum penalty of 10% of the total amount of your employee’s tax deducted for the 2021 tax year.

If we can assist at all, please reach out to our support team who will assist you as best they can in resolving any issues you are facing with submission.

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, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

TERS: Updates and Clarifications

The blog post today is aimed at trying to provide some much needed clarity on the TERS process. These changes, as outlined in a recent UIF update letter, were first introduced in our blog post from 5 October. The content of this blog post is taken from and summarises the UIF’s official update letter dated 14 October, sent to all employers.

Our post today covers:

  1.  how to determine salary and remuneration paid on applications;
  2.  the finer details of the bank verification step;
  3.  an update on foreign national applications; and
  4.  a reminder of how to end service on SimplePay.

1.a – How to Determine the Correct Monthly Salary to Declare

The monthly salary column of your TERS CSV, should reflect the aggregate of the wage and fringe benefits you pay to each of your employees. As SimplePay pre-populates this column, provided your employee’s salary information is correct, there’s nothing further to worry about. It is worth noting that if this value is not accurate, the UIF has introduced a new verification step.

The UIF is cross referencing the “taxable earnings” value for your employees’ March 2020 uFiling submission, in order to ensure that salaries are not inflated. If the values differ, the lower value will be used for the calculation of TERS benefits.

This is not a retrospective change, meaning it will only be applied to applications that have been processed from 3 September onwards. The change will though apply to all applications past this date, regardless of the lockdown period to which they relate. Unfortunately, even if you had legitimate reasons for increasing an employee’s salary, there is no way to apply to receive the higher sum that this would yield. 

1.b – What is the Correct Value for Remuneration?

To answer this question, it helps to take one step back. An employee is entitled to TERS benefits where he or she earns a reduced salary due to:

  • business closure;
  • comorbidities (an illness which puts the employee at an increased risk);
  • reduced working hours; or
  • having to take a temporary reduction of salary due to operational requirements.

Any of your employees satisfying the above can receive TERS benefits. Importantly though, where your employees receive remuneration in addition to TERS benefits for any given period, this needs to be recorded. This is because the aggregate of the TERS payment, plus the reduced remuneration paid by you cannot be greater than the amount the employee would ordinarily earn. Because of this, it’s important you know what falls under remuneration.

The UIF has clarified that all amounts / payslip components that would normally count as remuneration are included, except for loans, advances and payments related to leave taken.

2. Bank Verification

As part of the improvements to the TERS process, bank verification steps have been introduced. To help avoid delays it is important that you provide correct banking information. 

Some of the most common reasons for the failure of bank verification include:

  • The incorrect Personal ID number is used. This should be that of the bank account holder. If it is a joint account, you should ensure that it is the primary holder’s ID used.
  • If the bank account is held in a trade name, it is important that it matches the bank account’s name. 
    • If the bank account includes special characters, these should be used
    • Do not include any “t/a” sections of the bank account information
    • If the account’s name is in Afrikaans, this is how it should appear

Single Bank Account for Several UIF Entities

If you have several companies that pay into one bank account and you wish to claim TERS benefits to all the employees of the different companies, you will need to use the “Trade Name Verification” option to verify these UIF entities.

On the TERS portal, you will need to change all of your companies’ names to match the company name stated on the bank account. This will mean that you will have more than one UIF entity with the same name on the TERS portal, but also allows you to apply for benefits for all employees.

If you are at all unsure about this we would encourage you to get in touch with the UIF on 0800 030 007.

3. Foreign Nationals Update

The UIF has said that it’s currently working with the Department of Home Affairs to verify the foreign nationals. No payments will be made until the UIF has verified individuals’ identities, but it hopes it will manage this within the next fortnight.

Foreign nationals must be declared via uFiling, regardless of whether you submitted their declarations to the UIF using SimplePay.

How To Change Existing Applications

If you now realise that there’s an issue with one or more of your applications, this can be done using the UIF’s discrepancy function. Corrections can only be made once per employee, per application period so it’s crucial that you make the amendments carefully and accurately.

The discrepancy functionality is open for claims made up to and including the July / August application period, and will open in due course for the later lockdown periods.

How To End Service on SimplePay

It is important to correctly reflect your employees’ current working status on SimplePay for several reasons. Having this information allows:

  • SimplePay to provide you with accurate auto filled TERS CSVs;
  • you to make correct submissions to SARS;
  • Your employees to claim UIF where necessary; and 
  • Reduces your monthly charge to the number of active employees

To allow for SimplePay to provide you with accurate auto filled TERS CSVs, make correct submissions to SARS and reduce your monthly premium to an appropriate amount, it is important to correctly reflect your employees’ current status on SimplePay.

For a reminder of how to end an employee’s service on SimplePay, you can read this previous blog post.

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, why not try out our service free? You can sign up for your free 30-day trial here, get to grips with our user-friendly service by reading our getting started page, or try our free online course. Concerned about cost? Don’t be; we’ve simplified that too – check out our pricing page. Alternatively, you can request a formal quote if you need one here.

Keep well and stay safe.

Team SimplePay

UI Tweaks for Profile Pages

We take our mission of simplifying payroll seriously! It’s why we believe that the small details matter. With that in mind, you may have noticed some slight changes to our user interface for profile pages, such as Companies, Billing and User Profile. These are the pages that you can access when clicking on the profile icon. 

We’ve made these changes so that you can more easily identify when you are working on your profile as opposed to within a specific company, eliminating any confusion around whether your changes will apply at a company or profile level. 

When working in a specific company, you’ll see the usual interface that you have come to know. When working on one of the profile pages, you’ll now see the following changes:

  • In the top left corner, you’ll now see the G-ref number for your profile or the page name, depending on which page you are on. The top bar has also changed to a darker colour to make it clear that you are working on the profile as a whole and not on a specific company.
  • The sidebar menu for the company that you were working in no longer appears. To return to the company, click on the link that says “Go back to <company name>” that appears in the top left corner next to the G-reference number of page name.

We hope you enjoy this small, but useful change to your user experience.

Not a SimplePay client but want a payroll software provider that cares about your experience? SimplePay offers a free 30-day trial that allows you to see just how easy your payroll experience can be. You can sign up here.

Team SimplePay

Claims Request Expanded to Include Employee Hours Worked

Last month we brought you a new feature that allows employees to submit certain claims via the self-service portal (refer to our 6 August blog post). We have now expanded this functionality to include Basic Salary inputs for hourly paid employees.

Hourly paid employees can now submit their hours worked for the month*, which will then need to be approved by the approver for claims. Once approved, it will automatically be added to the next draft payslip for the employee.

As with all types of requests, employees and approvers can attach supporting documentation (in this instance, it may be a signed time sheet) or leave comments.

*Note: Payroll administrators will first need to allow Basic Salary inputs via self-service before this option is available to employees.

For more information on this functionality, refer to the following help article:

Employee Claim Requests

Not a SimplePay client? Our self-service portal allows employees to view payslips and tax certificates, update their personal information and submit leave and claims for payslip items. It’s one of the many features that makes payroll with SimplePay so easy. Not convinced? We offer a free 30 day trial that lets you try out our system to see if it suits your payroll needs. You can sign up for the trial here.

Team SimplePay

Lockdown Level 2

Note: This information was correct at the time of writing, being based on the Government’s related media releases.

Today (18/08/2020) is the first day that South Africa has dropped down to lockdown level 2 out of 5. But what does this actually mean? In today’s blog we shall outline the new changes and provide a summary table of what changed between each level of lockdown. 

Level 2

Travel and Accommodation

For the first time since 27 March 2020, people living in South Africa are allowed to travel between provinces for leisure purposes. This relaxation comes at the same time as the removal of the limit to the range of accommodation facilities which can be used, meaning that those of you in the hospitality sector can once again welcome nationwide guests. 

Gatherings

Under level 2, provided that you observe the Government Regulations on social distancing and health protocols, a number of gatherings are now permitted. This further expands the number of businesses that are able to operate under level 2. You can read the full list of permitted gatherings in section 55 of the Government gazette, but we have picked out a handful of the most relevant ones below:

  • Accommodation establishments and tour operators (up to 50% of available floor space, with patrons at least 1.5 metres apart)
  • Bars, taverns, shebeens and similar establishments (up to 50 people)
  • Concerts and live performances (up to 50 people)
  • Tourist attractions
  • Gyms, subject to guidelines (up to 50 people)
  • Swimming pools (up to 50 people)
  • Sports grounds and fields
  • Beaches and public parks

Sale of Alcohol and Cigarettes

The Government has relaxed its stance on the sale of alcohol, meaning that bars, restaurants and other institutions with a license to sell alcohol on-site can again do so, provided strict adherence to the 10pm curfew.

Additionally, alcohol can now be sold in shops between the hours of 9am to 5pm. Cigarettes may also now be sold in shops.

Businesses that must Remain Closed

Despite the majority of businesses, there are a number which must remain closed at this moment under level 2. These are:

  • 1. Night clubs
  • 2. International passenger air travel for leisure purposes
  • 3. Passenger ships for international leisure purposes
  • 4. Attendance of any sporting event by spectators
  • 5. International sports events
  • 6. Exclusions relating to public transport services as set out in the directions issued by the Cabinet member responsible for transport

Comparative Table of Lockdown Levels

Below is a comparative table between lockdown levels 5 to 2. If changes were made within the period of a certain lockdown level, the changed position will be recorded within the table. For a more detailed evaluation of the level, you can click on the link at the head of each column.

Lockdown LevelFive (5) Four (4)Three (3)Two (2)
Effective Date27/03/202001/05/202001/06/202017/08/2020
ShoppingFood, medicine and healthcare onlyFood, medicine, healthcare and limited others Most shopping reopened, but alcohol and tobacco sales remain prohibitedMajority of shopping reopened
TravelNone, except essentialNone, except essential and for businessBusiness travel and Intra-provincial leisure travelAll Inter-provincial travel, including domestic flights
Permitted GatheringsNone, except for funeralsFunerals, workplaces and obtaining certain goods and servicesA large number of gatherings permitted, subject to conditionsA large number of gatherings permitted, including amateur sport and small social events
Public SpacesClosedLimited number open, e.g. exercise permitted between 6 – 9amLimited number open for activities e.g. exercise between 6:00 – 18:00Open, subject to the Minister announcing closure and adherence with health protocols
Workplaces  Open for the provision of Food, medicine and healthcare onlyOpen for the provision of Infrastructure, manufacturing and food, as well as some other services.Majority reopened, except for some accommodation establishments and nightclubsMajority reopened
LeisureNoneNoneLarge number of services reopened within provinces, minus gyms, sports facilities, beaches and othersMajority of services reopened, minus nightclubs, spectating live sport and limited others

We hope that you have found the above information useful. 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, you can get a formal quote, sign up for our 30-day free trial or learn how to get set up on SimplePay. Alternatively, you can get in touch with one of our amazing support team at [email protected] 

Keep well and stay safe.

Team SimplePay