If you have an employee with a company car, the following options for taxing the fringe benefit are available on SimplePay:
- Taxable at 80% if the employee uses the company car for less than 80% for business purposes.
- Taxable at 20% if the employee uses the company car for more than 80% for business purposes.
This is often referred to as the SARS 80/20 rule, which outlines that employees with company cars and travel allowances are taxed either 80% or 20% based on the proportion of use for business purposes.
However, some employees have company cars that are used only for private purposes (in other words, it is not used for business at all). This means that on assessment, the fringe benefit for the company car will be 100% taxable by SARS.
To avoid the employee having to pay in tax, some employers used the Voluntary Tax Over-Deduction system item to deduct additional tax. However, this requires a manual calculation of the additional tax that the employee should pay. To make this process easier, we have now added additional functionality to the Company Car system item. When adding a company car under Regular Inputs, there is now an option to select “100%” as the Taxable Percentage.
For more information on the Company Car system item, refer to our help page here.
We hope that this new functionality makes payroll even more effortless and we continue working towards making payroll simpler and easier for you.
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.