icb payroll & monthly sars returns learning module 6
DESCRIPTION
If anyone studying ICB Payroll, this is the summary presentation for Learning Module 6 taken from the ICB Payroll and Monthly SARS Returns TextbookTRANSCRIPT
COMPLETE PAYE DOCUMENTSLearning Module 6
Pg 179
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Complete PAYE documentsPg 179
Tax implications Documents, authorisations & records Correct payments Timeous payments Statutory regulations complied with
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Calculation of taxation for individual employees pg 179 & 180
Different tax liabilities for each employee Changes in taxation values and thresholds Taxation on sliding scale Tax rebates are discounts that ensure
individuals with a taxable income below a certain level do not pay tax
Rebates Primary Secondary Tertiary
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Employee’s Taxpg 181
Withholding tax End of every wage cycle Tax based on taxable remuneration
received from the employer for the wage/salary cycle converted to an annual equivalent
SARS deduction tableshttp://www.sars.gov.za/Pages/Find-a-Publ.aspx?k=DEDUCTION%20TABLES
Known as PAYE
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Gross earnings vs taxable earningsPg 181
Income Tax Act required that correct amount of tax is deducted from each employee’s remuneration every month and paid over to SARS in the form of employees’ tax (PAYE)
Nearly everything employee earns is regarded as taxable
Most allowances are taxable – note company car and car allowances. (80 % vs 20%)
Fringe benefits are not part of earning but they are nevertheless taxable
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Gross earnings vs taxable earnings continued
Calculate PAYE on the balance of remuneration after deducting: Pension/retirement annuity fund (employer
deduction) Pension/retirement annuity fund (employee
contribution) Loss of earnings insurance policy paid by employee All contributions to medical aid if employee over 65 Contributions to medical aid subject to limits for
employees under 65 Medical aid tax credits Donations subject to provisions
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Gross earnings vs taxable earnings continued pg 182
NB: employer cannot deduct any employee contributions to a provident fund from the balance of remuneration
provident fund noun an investment fund contributed to by employees, employers, and (sometimes) the state, out of which a lump sum is provided to each employee on retirement.
Annual bonuses are taxed Ad-hoc payments are taxable at
employee’s marginal rate
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Fringe benefitsPg 186
Non-cash benefits Regular monthly earnings (fringe
benefits): Use of a company car Low interest or interest free loans (subject to
requirements of National Credit Act) Medical aid contributions (over & above
amounts allowable) Items treated at marginal rates:
Acquisition of asset at less than actual value Free or cheap holiday accommodation
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Fringe benefits continuedPg 186 & 187
Right of use of a motor vehicleMust use a logbook: http://www.sars.gov.za/AllDocs/Documents/Logbook/2014%20SARS%20Logbook.pdf
3.5 % determined value of the vehicle (less anything paid by employee)
3.25 % if vehicle is subject to a maintenance plan Determined value =
Cost of vehicle (excluding finance charges & interest) Cost of manufacturing vehicle Termination of lease – retail value at time when employer
first used the vehicle 80% fringe benefit classified as remuneration OR 20% fringe benefit IF 80% of the use of the car for
business.ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Fringe benefits continuedPg 187
Travel allowance 80% fringe benefit classified as remuneration
OR 20% fringe benefit IF 80% of the use of the car
for business.
Medical aid From 1/3/12 full amount contributed by
employer included in taxable income (tax benefit)
Tax credits allowed
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Balance of RemunerationPg 188
Calculation of employees’ tax (PAYE) is based on the “Balance of Remuneration” also known as “Taxable Income” (learn this template)
Limits in terms of S11 (k) and S11 (n) regarding Pension Funds deduction from remuneration: The greater of
R1,750 or 7,5% of retirement funding income
Disallowed portions cannot be carried forward Arrear contributions maximum of R1,800 and
may be carried forward.ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Retirement annuities: Income from capital investment paid in a series of regular payments (WordWeb)
Greater of – R1,750 or R3,500 less pension fund deduction or 15% non-retirement fund income after allowable
deductions except medical expenses & donations to PBO Excludes Capital Gains Lump sums from retirement funds
Disallowed excess may be carried forward to new year
Arrear contributions maximum of R1,800. Excess can be carried forward.
Balance of RemunerationPg 189
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Balance of RemunerationPg 189
Employee contributions to medical aid funds (S18) When employee makes contributions to
medical aid Allowable tax c redits
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Distinguishing between remuneration for PAYE, SDL &
UIFpg 194 & 195 Salaries above threshold = compulsory
registration with SARS for employees’ tax SDL if payroll >R500 000 (DOL) UIF on all employees (DOL) Learn the table on page 195
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
ICB Junior Bookkeeper: Payroll & Monthly SARS ReturnsICB Junior Bookkeeper: Payroll & Monthly SARS Returns
EMP201 returns
Salary register Benefits Deductions PAYE, SDL & UIF –reach SARS by 7th of
each month EMP501 reconciliation - biannual
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Completing payslips Following information must be on payslip:
Employer’s name and address Employee’s name and job title Period of payment Amount of employee’s pay Amount and description of any deductions made Actual amount paid to employee Ordinary pay rate Overtime pay rate Ordinary hours Overtime hours Sunday/Public holiday hours Averaging agreement hours where necessary
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Completing payslips continued
Payslips to be provided to employee day of payment or day prior to payment
Deadline for wage employees is date of payment
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns
Meeting deadlines
Salaries usually paid anytime from 24th onwards Salaries paid for a monthly cycle Cut off dates for additions/deductions on payroll Wages paid weekly or fortnightly (usually on a
Friday) PAYE, SDL, UIF by 7th of the month or Friday
preceding the 7th. COID payments once a year Pension fund/medical aid deductions from
employees salary/wage paid on the day salaries paid
ICB Junior Bookkeeper: Payroll & Monthly SARS Returns