icb payroll & monthly sars returns learning module 5

Statutory registrations

Learning Module 5Pg 151

ICB Junior Bookkeeper: Payroll & Monthly SARS Returns

Statutory registrations in a nutshellpg 152 - 153

• VAT• Provisional tax• PAYE• SDL• UIF• COIDA• Business Information Manual

(see next slide)

• Annual CIPRO (CIPAC) return


GUIDANCE NOTES: NO FEES are payable to the Commission for submission of your manual.

NOTICE: Private Sector PAIA Manual Submission Extension

The Department of Justice and Constitutional Development has extended the exemption which was to have lapsed on the 31st of December 2011. Private companies within certain sectors are now exempted from compiling and submitting information manuals in terms of section 51 of the Promotion of Access to Information Act to the South African Human Rights Commission until the 31st of December 2015.

While these private companies no longer have to submit manuals during the period of the new exemption they are not exempted from complying with the rest of the Act. Please also note that if an entity is a private body but not a private company as defined in the Companies Act of 2008 e.g. an non-governmental organization, it will not have to comply with section 51 of the legislation until the end of the moratorium exempting such companies.

In terms of the Government notice no.34914 certain private bodies will still have to submit their manuals in terms of the legislation to the Commission.

These private bodies are those which operate in specific sectors, with 50 or more employees OR operate in specific sectors and have an annual turnover equal to or

exceeding specific amounts.

http://www.sahrc.org.za/home/index.php?ipkContentID=70


http://www.sahrc.org.za/home/21/files/EXTENSION%20GRANTED%2030122011.pdf

http://www.sahrc.org.za/home/21/files/Promotion%20of%20Access%20to%20Information%20Act%202%20of%202000.pdf

http://www.sahrc.org.za/home/index.php?ipkContentID=70

VAT registration procedurespg 153 - 154

• Compulsory or voluntarily registration• VAT Act. S23

– Taxable supplies have exceeded R1 million in the previous 12 month period

OR– there is reasonable expectation that taxable

supplies will exceed R1 million in the following 12 month periodMay not split enterprises to avoid VAT

• 12 month period is NOT calendar or tax year


VAT registration procedures continued

• VAT 101 within 21 days of business becoming liable• Documentation to accompany VAT application• SARS interviews vendor or representative• Voluntary registration• Partnership• Partnership can be a VAT vendor• Individual VAT vendor = all activities Vatable


SDL’s in a nutshellpg 157

• Develop skills• Investment in education & training• Support skills development• Training programmes• Improve employment• Workplace education & training• Assist unemployed to find employment• Regulate employment services


SETApg 157 • www.teta.org.za/documents/

• Sector Education and Training Authority• Engage in training and education • Up to 60% of levies can be reclaimed

through training• 20% of levies used to finance training for

unemployed, youth & persons who would otherwise have no hope of improving skills

• 10% for admin of SETA• 10% accumulated for Discretionary Grant

Funding


http://www.teta.org.za/documents/

http://www.teta.org.za/documents/

Need for SDL?Pg 157

• Growing global importance for skilled workforce

• SA scores low on global rankings for HR development

• SA has high unemployment• SA has history of not investing in

people.


Wh

o pa

ys th

e le

vy?

Pg

157

- 15

8

• Employers• Except for:

– Public service employer (national & provincial government)

– Employee remuneration below R500 000 pa

– Fourth schedule of Income Tax Act– Religious/charitable/fund of which

income is exempt from income tax.– Education institutions must pay

SDL regardless of above point.


Implementation of SDLpg 158

• National Skills Authority• National Skills Fund• Skills Development levy-

financing scheme• Sector Education & Training

Authorities


Typ

es o

f gr

ants

pg 1

58

• Workplace skills planning grant(reimbursement of 15% possible)

• Workplace skills implementation grant

• Costs of skills programmes• Costs of learnerships &

allowances• Costs of providing

apprenticeship training• Programme, project or research

activity

Man

dato

ry


How much is levy & how can it be reclaimed?

Pg 158 - 159

• 1%• Registration of SDF• WSP

– Business plan– Training needs– Workplace Skills Plan guidelines– Draft list– Consultation– Write the plan– Keep copy ICB Junior Bookkeeper: Payroll & Monthly SARS Returns

• 15% can be claimed of the levies (SDF & WS)

• Complete annual training report:– Annual training report guidelines– Monitor progress of training– Write report as per guidelines– Submit report before deadline

How much is levy & how can it be reclaimed? continued

Pg 158 - 159


The workplace skills planpg 160

• Importance of workplace skills plan– Strategic basis for planning– Enhance job satisfaction– Identifying imbalances in the demand for

skilled labour– Formulation of amendments to NSDS

(National Skills Development Strategy)


Feedback on Integration task 5.2

1. K 2. O 3. A 4. F 5. C 6. D 7. M 8. E

9. H 10. N 11. B 12. I 13. G 14. J 15. L


UIF in a nutshellpg 161

• Two Acts– Unemployment Insurance Act No. 63 of 2001– Unemployment Insurance Contributions Act No. 4 of 2002

• Registration with SARS• Provide short term relief• UIF contributions act = collection of

contributions• UIF Act = benefits to which

contributors are entitled


UIF in a nutshellpg 161

• PAYE & SDL registrations = UIF registration with SARS

• No PAYE & SDL = UIF• Contributions to be paid by the 7th of

the month EMP201

UIF benefitspg 162

• Unemployment benefits• Illness benefits• Maternity benefits• Adoption benefits• Dependants’ benefits


Claim benefitspg 162

• Termination of contract, dismissal or insolvency

• Application within prescribed requirements

• Contributor must be registered as a work-seeker

• Contributor capable and available for work


Non

cla

im f

or

UIF

pg 1

63

• Receiving monthly state pension• Receiving payment from

Compensation Fund• Receiving benefits from any other

scheme• Resignation from employment• Fail to comply with the Act• Suspended• Fails to report timeously• Refuses training and vocational

counselling


Amount of payment by the UI Fundpg 163

• 6 days worked = 1 day’s credit to max of 238 days (8 months)

• Benefits calculated on a sliding scale dependant on salary

• Benefits range from 38% for highest paid workers to 58% for lowest paid workers


Documents to apply for benefitspg163

• Identity document/passport• UI-2.8. Banking details• UI-19 proof that person is

no longer employed• Proof of registration as a

work seeker


Who contributes to UIF?Pg 164

• Every employer• Every employee• Except for

• Employed less than 24 hours a month• Contract of employed under Skills Development

Acthttp://www.labour.gov.za/DOL/legislation/acts/skills-development/read-online/amended-skills-development-act-19

• National & provincial spheres of government• Employee entered SA to carry out a contract of

service/apprenticeship or learnership and will be repatriated


Registration procedurespg 165

• UI Commissioner’s office:– Does not register employees for tax

purposes– Employer not registered with SARS– Employer not liable for SDL

Registration procedurespg 164

• SARS– Employer liable to register with

SARS– Voluntary registration with

SARS– Register with SARS– And complete UI-8 and UI-19

form– Domestic staff complete UI-8D


Calculations of contributionspg167

• 2% (1% by employer + 1% by employee) of gross remuneration

• Excludes:• Commission• Pension & annuity paid by employer• Employees who work less than 24 hours a

month• Leave gratuities (termination &

retrenchment)• Remuneration under learnership agreements• Foreign employees who will be repatriated


• Overtime is NOT excluded from UIF calculations

• UIF calculated on remuneration BEFORE deduction of allowable contributions

• Maximum threshold for UIF contributions

• For purpose of this course maximum UIF remuneration of R14,872 will be assumed

Calculations of contributions continuedpg167


PAYE in a nutshellpg 168

• What is taxation and why do we have to pay it?

• www2.hn.psu.edu/faculty/jmanis/adam-smith/

• How does the tax system work– National Budget– Economic growth– Meet most basic needs– Tax year

PAYE in a nutshellpg 168 - 170

• The language of income tax– The Income Tax Act No. 62 of 1962 (as amended)– Types of tax

• Normal tax• Turnover tax• Donations tax• Dividends withholding tax• Withholding tax

– Natural persons vs legal persons– Residence based– Tax year assessment– Taxable income and income tax– Prepaid taxes (PAYE & Provisional Tax)


• Setting fair remuneration scales/packages for different professions– Supply and demand– Seniority– Qualification level– Risk– Expertise– experience


• Gross earnings & deductions– Gross before deductions– Net after deductions

• Gross salary/wage = total remuneration • Net salary/wage = amount paid to employee

after deductions• Wages = weekly based on time• Salary = monthly based on days

Tax year assessment

• Taxable income for a specific year • March to February• Taxable income = the net income of a

person on which tax will be calculated

• Employees’ tax and provisional tax• Employee tax = weekly & monthly

prepayments• Provisional tax = three payments

Gross earnings & deductions• Gross = BEFORE deductions• Net = AFTER deductions• Gross salary/wage = total

remuneration package before deductions

• Net salary/wage will be the amount paid out to the employee after deductions (take home pay)

Compensation for Occupational Injuries & Diseases Act

Pg 172

• Replaced Workman’s Compensation Act

• Provides for employees to be compensated for injuries or diseases resulting directly from their employment, even if the injury or illness was not caused by the employer (company) or another employee.

COID pays benefits in the form of:

• Medical expenses• Wages whilst employee

incapacitated• Part or whole disability

payments• Death benefits

COID does not apply to:• Person employed by the state

to perform military service• Member of the permanent

force• Member of SAPS• Contractor• Domestic servant in private

household

COID pg 173

• An accident must be reported immediately

• No wilful misconduct• Concealed previous injury not

accepted• Must agree to undergo

rehabilitation

COID pg 173

• Contributions must be paid as due

• Notify commissioner of accident

• Maintain first aid service• Provide transport for injured

employee• Keep relevant records

COID pg 173

• Contributions limit = R292 032• Calculations of amounts due

– insurance policy which is underwritten

– Higher risk higher premium

• Registering with Compensation Fund