Sage announces it will discontinue statutory compliance support

In a recent announcement, Sage confirmed that from the 1 October 2019 they will no longer provide tax and compliance advisory services to customers in South Africa, the rest of the Africa region and Middle East.

This is a massive announcement for the industry as many users of Sage have benefited over the years from their regular tax and statutory updates as well as the comfort they could rely on the software to provide them with outputs consistent with the legislation.

I am sure it could not have been an easy decision for Sage to make and we can only speculate that this reflects the increasingly difficult environment we find ourselves in where maintaining compliance is extremely difficult not only because of the complexity of our legislation, but also because of the differences in interpretation applied by the authorities. This creates significant risk for software developers and we assume must have played a key part of Sage’s decision.

The challenge for employers using the Sage products is that while they have committed to trying to make the software compliant they have suggested clients contact tax practitioners (business partners) about compliance issues. The real burden for linking what tax practitioners then say about the legislation and what actually happens in the payroll system will fall on the customer significantly increasing the risk of getting things wrong (and facing the consequences).

The advantage of having a compliance support function within a software developer is the ability to practically think through new legislation before developing solutions and also being the first to hear about issues that arise with clients. This feedback loop is now gone.

I believe this will make it harder for Sage to continue offering a quality product (hopefully I am wrong) and make it harder for internal payroll administrators to do their jobs – they will now be fully responsible for compliance and won’t be able to fully rely on the system.

Salary benchmarking

Organisations often struggle to determine how to remunerate their employees fairly. In a market where quality, skilled employees are hard to find it is important to ensure that you are competitive in terms of setting remuneration levels to attract and retain high calibre staff.

Questions like:

  • Do we have internal pay parity amongst employees?
  • Are staff paid fairly against the market?
  • What do we use for benchmarking?
  • How do we do the benchmarking?

are commonplace and are sometimes difficult to answer without the correct tools and skills.

HRTorQue has the capability to conduct an internal benchmark for all your staff and compare your internal remuneration structures against comparative external market data. This benchmarking is becoming increasingly relevant based on legislative requirements around ‘equal pay for equal work’.

eTorque as a system can be very helpful in providing easy access to remuneration data for benchmarking purposes.

For more information on the Benchmarking Intervention or on how to use e-TorQue in this regard, please contact [email protected].

Payroll Fraud Audit – new service

As financial conditions get tougher, we have heard of an increased level of financial fraud in South Africa. With the level of cash flowing through payroll there is a high likelihood of fraud in this area.

HRTorQue has launched a new service to perform either a review or audit of payroll depending on client preferences.

This service is aimed at identifying the risk of fraud within the payroll process and includes a number of checks to identify whether actual fraud might exist.

We specifically look at the following areas:

  • Timesheet Fraud (hours not actually worked)
  • Manipulation of payroll calculations
  • Ghost employees
  • Commission / bonus fraud (overstated performance)
  • Reimbursable expenses (over-claiming)
  • Payroll controls and approval

For more information please contact [email protected].

Botswana Minimum Wage

The Ministry of Employment, Labour Productivity and Skills Development has published a notification informing the public that the Government of Botswana has approved an increase for minimum wage rates for 2019/2020.

The adjusted minimum wage rates took effect on 1 July 2019.

Trade / Industry Basic Minimum Wage
Building, construction, exploration and quarrying industries P6.77 per hour
Wholesale distributive trade P6.77 per hour
Manufacturing, service and repair trades P6.77 per hour
Hotel, catering and entertainment trades P6.77 per hour
Garage, motor trade and road transport P6.77 per hour
Retail distributive trade P6.01 per hour
Security guards P6.77 per hour
Domestic service sector P1,000.00 per month
Agricultural sector P1,000.00 per month

Employers are advised to adhere to the newly stipulated rates. Failure to do so will be a violation of s138 of the Employment Act, Cap 47:01 and punishable in terms of s151(d) of the same Act.

Cost Savings through Data Management – Variable Pay

For larger employers and those with wage employees, variable pay tends to form a material part of the remuneration paid to employees (by variable pay we mean any pay that varies from pay period to pay period dependent on variable factors which may or may not include performance). Variable pay elements could include commissions, performance bonuses, overtime and certain allowances. Overtime tends to be the main element of variable pay, but this is not always the case.
Many employers track time using time and attendance systems, but very few monitor and proactively manage variable pay despite this being a sizeable cost for the organisation.

Significant cost savings can be made by following the process below:

  • Data Collection – collect data on employee time through an appropriate Time and Attendance system and process (see our separate article on how to set this up properly) and preferably by collecting individual employee data in a suitable HR or payroll system (Note: it is difficult to proactively manage anything if you don’t have good data);
  • Analyse the data to identify patterns:
    • Which employees are racking up the most overtime (look at trends)
    • Which departments / depots / locations / teams see the most overtime? Is this expected?
    • Is the reason for the overtime clear?
      • Staffing shortages
      • Heavy project loads / specific projects
      • Employees looking for extra pay – no discernible reason
    • Is overtime being paid according to legislation, union rules?
    • Are other allowances in line with union/bargaining council rules or have some allowances crept in because of legacy arrangements?
  • Consider ways to improve work practices and/or communication
    • Communicate the company policy to employees and managers;
    • Utilise tools to notify managers where overtime is becoming excessive;
    • Monitor and resolve employees claiming excessive overtime;
    • Proactively plan for staff shortages by using alternative staff or changing shift patterns;
    • Consider cross training in bottleneck areas to reduce the workload on key employees or teams;
    • Identify scarce skills and bottle necks and implement plans to address these;
    • Set targets for managing variable pay and track variable pay against output to make sure variable pay is reflected in improved efficiency / performance

It is also helpful to put a cost figure to overtime and variable pay and set targets for managers to reduce and hit lower targets.

While in South Africa we tend to focus on employees entitled to overtime under the BCOE, it is also important to consider work practices for salaried employees and make sure we as employers don’t create a culture of working overtime just for the sake of it. Where this is an issue consider better communication, limiting meetings to maximum lengths (of say 45min or an hour) and reducing the impact of team meetings.

HRTorQue Now Offering VIP and Psiber Payroll Support

We are pleased to announce that HRTorQue now has the resources and capability to offer a support service to clients who wish to run their own payrolls on Sage VIP or Psiber, but who need help with material changes. 

Our team are available to help with:

  • Payroll Setup
  • IRP5s and EMP501 Reconciliations and Submissions
  • Report Setup
  • Package Changes e.g. medical aid price increases; new income/deductions

Employee New PAYE Business Reporting Spec for Employer Filing Season

Effective September 2019

SARS published the tax certificate specification document on 26 March 2019.

The document specifies the requirements for the generation of an import tax file for the annual as well as the interim submission. The requirements in this version of the BRS will become effective from September 2019 PAYE interim reconciliation period. To access the new BRS, please click here.

HRTorQue Now Offering VIP and Psiber Payroll Support

We are pleased to announce that HRTorQue now has the resources and capability to offer a support service to clients who wish to run their own payrolls on Sage VIP or Psiber, but who need help with material changes.

Our team are available to help with:

  • Payroll Setup
  • IRP5s and EMP501 Reconciliations and Submissions
  • Report Setup
  • Package Changes, e.g. medical aid price increases; new income/deductions