South African Payroll Association

Previous Questions and Answers

Question 1
What amount is used to calculate SDL ie R6000 or R5800?

Answer:
R 5 800 (Taxable Earnings)

Question 2
For reporting purposes on the IRP5, R5000 will be reported in box 3697 Gross Retirement Funding Employment Income .
- Will R1000 be reported in Box 3698 Gross non-retirement funding income OR
- Will R800 be reported in Box 3698 and R200 in Box 3698 Gross non-taxable income?

Answer:
R 800 will appear in Box 3698

Question:
I have finished my Diploma with Payroll Education and want to go further in payroll. Will South African ever offer a degree or will I need to go study in the U.K.?

Answer:
We are in the process of developing a business Administration degree specialising in Payroll. We hope to finalise it for submission to the South African Qualifications Authority sometime in 2012 for approval and accreditation. We will be keeping out members updated from time to time on the progress of the project.

Question:
Why must we still complete ui19’s if the electronic file is submitted every month? As we have employee across the country, we are flooded with requests for UI19’s after the elections. I don’t think it is necessary for us to complete the UI19’s but still the local offices insist on it.

Is there a someone at Labour Department that can provide guidance or is there a instruction somewhere that can clear the matter?

Answer:
I have to advise that if an electronic file has been received and the periods for the last 4 years are updated the employer do not need to complete a UI 19 form again.

However, in some cases employers only started to send files for the last year or two and therefore the employees’ credits are not reflecting correct on the Funds database and a UI 19 form should be requested.

There are also scenarios where the employer declares different start dates with only one end date. A UI 19 is then required to correct the oversight that was made within the payroll file, kindly see example of data in files as well as previous periods as currently reflected on the Funds database:

Question:
Some of our employees are foreigners and people who are already on pension. We currently deduct UIF from these people if they work more than 24 hours in a month. When some these people have attempted to claim UIF after their period of employment they have been unable to do so. Should we be deducting UIF from them?

Answer:
Foreigners should be contributing to the Fund if they are not obliged to return to their country of origin when their contract expires and if they are in possession of valid work or residence permits. They will be able to claim benefits and the Fund has implemented a special process to deal with these claims in the absence of a 13 digit bar coded ID document. In the case of pensioners who are being paid their pensions through a payroll system, they should not be contributing and should be indicated as such. I hope this will assist you.

Regards,
CHRIS MILL
DIRECTOR: OPERATIONS
UNEMPLOYMENT INSURANCE FUND

Question:
CASE:
An employee is reimbursed for business kilometres travelled at a rate exceeding the prescribed rate (the claim is not taxed when paid). As the employee does not receive a Travel Allowance, the reimbursive travel claims are reported under Box 3702 on the Tax Certificate.

1. Must the employee keep a log book of the business kilometres travelled?
2. Must the employee declare the business kilometres travelled when submitting his annual tax return?
3. If no to the above two questions, how does SARS access the payment and determine what portion if any is taxable?

Answer:
In response to your query based on the facts presented the following statements are made:
As the re-imbursement is in excess of the prescribed rate the individual employee will be required to substantiate the total reimbursement on assessment. This will be completed in the same format as an individual in receipt of a travel allowance.

The employee is required to provide you with accurate details as to the business km's travelled when he submits his claim for reimbursement. The accurate details should include odometer reading distance travelled and the reason for the travel. Sars have of late paid special attention to the details submitted by means of a claim form for reimbursement, care should be taken to improve the recordal of travel so as to not create an incorrect impression, namely that the reimbursement is purely a 'disguised' travel allowance.

From the above it is clear that the claim form will/should reflect accurate business kms travelled and thus can be used to substantiate business travel, confirmed by the employer and the remaining distance between opening and closing kms is the private portion.

Question:
Previously the UIF threshold was the same as the earnings threshold. Please confirm that this remains at R149736 and must not be increased to R172000

Answer 1:
The UIF Threshold remains unchanged. UIF have applied for an increase but this has been referred to NEDLAC where it will be discussed.

Answer 2:
Two different issues all together. The UIF threshold remains unchanged.

Question:
A Union company are giving company cars to Union members (Non Employees) and the members use the company cars to travel to place of business and home. Should the Union process the benefit for the Non-Employees via their own payroll and issue a tax certificate at year end and how should the tax portion be treated? The Union also pay subsistence allowances to the Union members. Should a tax certificate be issued at year end?

Answer:
In theory a tax certificate should be issued for the benefit given.

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Question:
I want to start a payroll services business but am currently in the dark as far as documentation and requirements are concerned.

1.    What is required to start this sort of venture?
2.    What are the specific organizations I need to affiliate with?
3.    What documents are required to start?

Answer:
Is it a payroll bureau type of business that you want to start?

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Question:
I'd like to stop some of the voluntary payroll deductions that gets sent to payroll for processing. This month it's this next month it's that. It has become a admin nightmare

1st Answer:
You are under no obligation to do 3rd party payments to institutions other than agreements that you have entered into with pension funds, insurance companies, medical aids, unions and of course SARS. Just make sure there is no agreement with the union(s) to do these voluntary payments on behalf of members before you stop them.

2nd Answer:
Not really sure what is being asked here! However, if you want to manage a process which has been accepted in the workplace for some time, it would probably mean changing policy, which can be done through their Employee Forum, with management consent.

Possibly you should calculate the time and cost of managing these deductions to the company, and present this to management with a suggestion that ad-hoc requests attract an admin fee, which might also make people think before asking for something to be done for them!

Question: What are the requirements to be a member of the SAPA?

Answer: Companies or individuals involved in or who have an interest in payroll may become members of the association.

Question: If I want to do The Diploma in Payroll Administration NQF level 5, which institution would you recommend?

Answer: At this point in time there are two accredited Services Providers who provide this training: Payroll Education and Accsys.

Question: Is there something that the Payroll Association is doing about developing higher courses in Payroll together with other stakeholders in the industry?

I completed my National Diploma in Payroll Administration last year and have been eager to further my studies this year but could not as there appears to be no higher institution/ Institute that offers senior qualifications in Payroll.

So far the only (or that i know of) countries offering higher qualifications in Payroll are UK, Australlia and US. What is SA payroll Association doing about this?

Answer 1: At this point in time, the NQF Level 5 is the highest qualification available for the payroll Industry. However the S.A. Payroll Association in partnership with the services SETA is engaged in a project to develop a Business Administration degree with the emphasis on Payroll. This project is in the foundation stage but the Association is actively supporting this initiative.

Answer 2: The Services SETA and SAPA are looking into the matter of developing a further qualification, but it is still only in general discussion phase. We have no idea at this stage of a likely time-line.

Question: I would like to follow a career in payroll. Which course or diploma will be the best to do to boost my career?

Answer 1: There are two qualifications in Payroll. The NQF level 4 Certificate in Payroll Administration Services and the NQF level 5 the Diploma in Payroll Administration Services.

Answer 2: You can also get in touch with the Services SETA to find out who the suppliers are who are able to assist you with getting the qualifications required.

Question: We are a company who send both employees and contractors offshore at various times. A question has arisen as to whether employees who go offshore and work for various lengths of time, anywhere from 7 days to 90 days, straight (Saturdays and Sundays) need to have any additional leave days added to their annual 15 days. When they are offshore they earn a much higher daily rate of pay. Please advise

Answer: The BCEA states that an employee must get 1 day leave for every 17 days worked. For a normal 5 day a week worker this equates to the 15 days which we all know as the minimum leave. The above rule should be applied for the persons in question. This could be influenced by external factors such as when they work away do they fall under the legislation of the country where they work or are they under SA law.

Answer: In my opinion the employee is above the basic conditions of employment therefore it depends entirely on what was agreed in the employment contract signed between the employer and employee.