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Most business owners are aware of the size of their payroll
expense and pay a lot of attention to providing for the cash
flow and managing it as an expense line item. Strangely though
the administration risks surrounding this expense are often
ignored and the controls are assumed to be sufficient – you do
so at your peril!
In today’s highly technical legislative environment, your
payroll administrator needs to ensure that the ever changing
legislative amendments and their implications have been
considered in your company’s payroll – a blind reliance on data
capturers capturing hours/remuneration and trusting a payroll
software to compute and address the required employee’s tax
obligation could land you in hot water with SARS.
It is critical that the relevant sections of the Income Tax Act
(‘the Act’) are applied correctly and that a knowledge and
understanding of payroll procedures and SARS systems is applied
to ease the burden that SARS is increasingly pushing on to
employers to administer the relevant sections of the Act.
Very importantly, the meaning of “employee” in terms of the Act
and Labour Law needs to be understood to reduce all the risks
associated with the incorrect application of the definition,
when reviewing salary structures and their various tax
implications, for example “travel allowance” and “company car”.
By merely relying on pre-programmed software to make these
decisions, the risk of the employee’s tax being incorrectly
calculated and the employer being charged large penalties by
SARS (200% penalty) is increased.
To limit your risk in this area where SARS PAYE audits are
becoming more and more common place, your payroll administrator
must have sufficient knowledge to understand the various tax
principles that apply to your business and be able to make
decisions that will withstand any SARS audit/review. We offer a
comprehensive payroll bureau solution for your needs that is
managed by a highly qualified tax professional with many years
of experience in the field. We strongly urge you to take
advantage of our expertise in this area as it will save you
costs and administrative nightmares. For more information,
please contact Juanita Roman at our offices on (021) 683 4834.
Should you require any further information, please do not hesitate to contact us.
| Alexis Sacks
|
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Dave Rich
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Important Note:
The information contained in this newsletter is of a general nature, and may in certain circumstances be subject to misinterpretation. Consequently, we recommend that our advice be sought when acting upon the information contained herein. Whilst every care has been taken in the compilation of this Newsletter, no responsibility of any nature whatsoever shall be accepted for any inaccuracies, errors or omissions.
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