When you decide to employ someone you have a legal obligation to keep employees’ records.

You should register as an employer with SARS to ensure that the PAYE you deduct from their salaries will be paid over to SARS.

You are also required to do the following :

• Each employee should be given a weekly, fortnightly or monthly payslip stating gross pay, deductions for income tax and pension payments. A cumulative of these items should be shown for the current year.
• Monthly income tax payments should be made to SARS for which you should receive a receipt.
• An IRP5 or IT3 should be given to every employee at the end of each tax year. This is a summary of all earnings and income tax paid during the tax year.
• You should reconcile your IRP5s with SARS through the EMP501 reconciliation process on a bi-annual basis.

Keeping employment records is a specialised task which can be time consuming and worrying.

Remember that not only do you have to pay employees’ wages, you also have to pay UIF, SDL (if your payroll is greater than R500 000 per year) and COID.

You are required by law to keep the records, because it may be inspected by SARS.

An accountant should be appointed to alleviate your administrative burden.

SOURCES :

Cronje & Cronje
Business Partners