FRK 121
CHAPTER 4: SALARIES
Lecture 1: ADMINISTRATION OF SALARIES:
INTRODUCTION:
Relationship between employers and employees is regulated by several acts
and include:
- Basic Condition of employment act no 75 of 1997 (as amended)
- Labour Relations act no 66 of 1995 (as amended)
- Income tax owed by employees - Income Tax act no. 58 of 1962 (as
amended)
Payroll administration aims to comply with these acts.
- certain compulsory deductions from salaries and wages
- certain contributions that are made by the employers.
- correct tax calculation
Payroll system is either computerised system or manual. Basic principles:
- Correct calculations, keep records for 3 years, have written policies
regarding types of deductions and contributions, etc.
, ADMINISTRATIVE REQUIREMENTS:
Employers keep various records, e.g. employee name; date of birth; physical &
postal address; ID number; dependants; tax reference number and contact
details
Employment contract:
- forms the basis of relationship - if dispute arises it is referred to
- provides pertinent information for payroll administration: job title,
working hours, nature of appointment (i.e. full-time, temporary,
permanent, part-time etc.), remuneration, benefits (e.g. vacation leave,
sick leave, maternity leave)
Employers register an employee with Department of Labour for UIF, SARS,
Regional Services Council (RSC) levies.
Most entities use an electronic payroll packages to calculate salaries & wages.
GROSS REMUNERATION:
Gross remuneration is annual amount before any statutory (e.g. tax,
UIF) and non-statutory (e.g. contribution to staff tea club) deductions.
Net remuneration is amount after deductions (paid into bank account)
- Example 4.1: Thandi Maleka earns gross remuneration of R120 000 pa
(R10 000 pm). Tax of R1 800 pm is deducted. Net remuneration is
R8 200.
Management staff generally offered a salary package - includes benefits such
as travel allowances, housing subsidies, etc.
Wages are normally calculated at an hourly rate, therefore fluctuate according
to hours worked & normal and overtime and rates.
CHAPTER 4: SALARIES
Lecture 1: ADMINISTRATION OF SALARIES:
INTRODUCTION:
Relationship between employers and employees is regulated by several acts
and include:
- Basic Condition of employment act no 75 of 1997 (as amended)
- Labour Relations act no 66 of 1995 (as amended)
- Income tax owed by employees - Income Tax act no. 58 of 1962 (as
amended)
Payroll administration aims to comply with these acts.
- certain compulsory deductions from salaries and wages
- certain contributions that are made by the employers.
- correct tax calculation
Payroll system is either computerised system or manual. Basic principles:
- Correct calculations, keep records for 3 years, have written policies
regarding types of deductions and contributions, etc.
, ADMINISTRATIVE REQUIREMENTS:
Employers keep various records, e.g. employee name; date of birth; physical &
postal address; ID number; dependants; tax reference number and contact
details
Employment contract:
- forms the basis of relationship - if dispute arises it is referred to
- provides pertinent information for payroll administration: job title,
working hours, nature of appointment (i.e. full-time, temporary,
permanent, part-time etc.), remuneration, benefits (e.g. vacation leave,
sick leave, maternity leave)
Employers register an employee with Department of Labour for UIF, SARS,
Regional Services Council (RSC) levies.
Most entities use an electronic payroll packages to calculate salaries & wages.
GROSS REMUNERATION:
Gross remuneration is annual amount before any statutory (e.g. tax,
UIF) and non-statutory (e.g. contribution to staff tea club) deductions.
Net remuneration is amount after deductions (paid into bank account)
- Example 4.1: Thandi Maleka earns gross remuneration of R120 000 pa
(R10 000 pm). Tax of R1 800 pm is deducted. Net remuneration is
R8 200.
Management staff generally offered a salary package - includes benefits such
as travel allowances, housing subsidies, etc.
Wages are normally calculated at an hourly rate, therefore fluctuate according
to hours worked & normal and overtime and rates.
