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.

Updates in SimplePay for the 2016/2017 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 2016, your payroll will automatically meet all the requirements for the 2016/2017 period, as announced in the 2016 Budget Speech on 24 February 2016.

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

2016/2017 Tax Rates:

Taxable Income (R) Rate of Tax (R)
0 – 188 000 18% of taxable income
188 001 – 293 600 33 840 + 26% of taxable income above 188 000
293 601 – 406 400 61 296 + 31% of taxable income above 293 600
406 401 – 550 100 96 264 + 36% of taxable income above 406 400
550 101 – 701 300 147 996 + 39% of taxable income above 550 100
701 301 and above 206 964 + 41% of taxable income above 701 300

The primary rebate has increased from R13 257 to R13 500.

The tax threshold has also increased from R73 650 to R75 000

The medical aid tax credit has increased as follows:

  • The tax credit for the main member plus first dependent has increased from R270.00 to R286.00 per month.
  • For every additional dependent, the tax credit has increased from R181.00 to R192.00 per month.

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

  • The allowance for incidental costs within South Africa has changed from R109.00 to R115.00.
  • The allowance for meals and incidental costs within South Africa has changed from R353.00 to R372.00.

**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

SARS PAYE Reconcilliation 2015-08

Dust off your EMP501s, it’s that time of year once again.  The employer filing season opened officially on 1 September, with the deadline on 30 October 2015.  You will be reconciling figures for the period 1 March 2015 to 31 August 2015.  Please view our online help on this subject to ensure that everything goes smoothly.

It’s worth noting this time around that both version 6.6.2 and version 6.6.3 of SARS e@syFile can be used to submit your reconciliation statement (EMP501). If you’re using version 6.6.2 you’ll see a popup message asking you if you would like to update to version 6.6.3. Clicking ‘Yes’ will update e@syFile to the latest version, requiring a full back-up and restoring of data, while clicking ‘no’ will allow you to continue using the older version.

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

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 e@syfile 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.

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.

Interim PAYE Reconciliation Closes in One Week!

Just a reminder that the current bi-annual recon season closes in a week, on Monday 31 October. You should submit all your tax certificates to SARS by then. SimplePay has an e@syFile export function that makes this easy.

You also need to do an EMP501 recon. SimplePay also has a report to help you with this.

If you haven’t completed your recon yet, start now to avoid the deadline rush.