Payroll outsourcing for South African employers

Payroll outsourcing for South African employers

Payroll is the one function in a small business where a mistake is immediately visible. Staff notice a short payslip the same day. SARS notices a late EMP201 the following week, and charges a 10 percent penalty for it. The Department of Employment and Labour notices a missing UIF declaration when an employee tries to claim and cannot.

PayStream takes the entire payroll cycle off your desk. You send us the changes for the month, which is usually a short list of new starters, leavers, overtime and leave. We do everything after that: the calculations, the payslips, the bank payment file, the SARS submission and the statutory declarations. You approve one schedule and pay one batch.

We run payroll remotely for employers in every province, from a one-branch business in Polokwane to a multi-site operation across three cities. Our registered office is in Sandton. The work happens on cloud payroll software, so it makes no difference whether your staff sit in Midrand, Cape Town or on a site in the Northern Cape.

What we handle each payroll month

• Payroll processing and payslips. Salaries, wages, hourly and weekly cycles, overtime, commission, bonuses, allowances, deductions, garnishee orders and loan repayments. Payslips are emailed directly to staff or delivered through an employee portal.
• PAYE, UIF and SDL. Calculated on current SARS tables, including the annual tax table changes and any mid year budget adjustments, so nobody gets a nasty reconciliation surprise in February.
• EMP201 monthly return. Prepared, checked and filed on eFiling before the 7th of each month, with the payment reference sent to you in advance.
• EMP501 reconciliation. Both the interim reconciliation in September and the annual one in May, reconciled to your general ledger before anything is submitted.
• IRP5 and IT3(a) certificates. Issued to every employee after the annual reconciliation, correctly coded so their personal tax returns do not bounce.
• UIF declarations. Monthly uFiling declarations, plus UI-19 forms for staff who leave so they can claim without chasing you.
• COIDA. Registration where you are not yet registered, the annual Return of Earnings, and the Letter of Good Standing that most tenders and landlords ask for.
• Terminations and leave. Final pay calculations, notice pay, leave encashment and the certificate of service, all done to the Basic Conditions of Employment Act.

Why employers outsource payroll instead of keeping it in house

A payroll clerk in Gauteng costs a business somewhere between R18,000 and R30,000 a month once you add UIF, SDL and the cost of the software licence. For a company with fifteen or twenty staff, that is an expensive way to produce twenty payslips. Outsourcing turns a fixed salary into a variable cost that moves with headcount.

The second reason is continuity. When the person who runs your payroll resigns, goes on leave or gets sick in the last week of the month, the payroll still has to run. With an outsourced provider that is our problem to solve, not yours.

The third reason is separation. Salaries are confidential, and in a small office the person processing them usually sits ten metres from the people whose numbers they are processing. Moving payroll off site removes that entirely.

Payroll compliance deadlines we work to

1. 7th of every month. EMP201 submission and payment to SARS for the previous month's PAYE, UIF and SDL. Late submission attracts a 10 percent penalty plus interest.
2. 7th of every month. UIF declaration to the Department of Employment and Labour through uFiling.
3. End of October. Interim EMP501 reconciliation covering March to August.
4. End of May. Annual EMP501 reconciliation covering the full tax year, and issue of IRP5 certificates.
5. 31 March. COIDA Return of Earnings for the assessment year, though the Compensation Fund frequently extends this.

Switching your payroll to PayStream

Most transfers take under two weeks and happen between payroll runs so nothing is disrupted. We take your current payroll export or the last EMP501, load the year to date figures so that the tax calculation stays correct across the switch, check the employee master data against ID numbers and tax numbers, and run a parallel calculation for the first month so you can see that the numbers match before anything is paid.

If your previous provider left problems behind, which is common with unfiled EMP501s or IRP5 certificates that were never issued, we deal with those as part of onboarding rather than pretending the history starts with us. A payroll health check is the usual first step where there is any doubt about the state of the file.