Frequently Asked Questions

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Q & A

1
What is a payroll solution?

A payroll solution is on-premise, cloud-based or hybrid software that automates all activities pertaining to employees’ remuneration and benefits. It also helps companies ensure they are compliant with tax legislation, thereby alleviating risk and reducing costs.

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2
What should I look for in a payroll solution?

When it comes to finding the best payroll solution for your business, companies should look for a system that will save time, reduce costs and facilitate investment in engaged employees. A proven, legislatively compliant and comprehensively supported payroll solution is the first step to achieving this objective.

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3
What is meant by digital payroll?

It’s not uncommon for payroll administrators to rely on Excel spreadsheets and laborious manual processes to perform specific tasks, simply because their payroll solution lacks the requisite functionality. But besides managing salaries and employee benefits, payroll is also responsible for legislative compliance. A digital payroll system automates the payroll process, making it secure and legislatively compliant, while ensuring a seamless experience for employees.

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4
What do payroll services include?

A dedicated payroll services provider is experienced in all the best practices required to manage an organisation’s payroll accurately and efficiently, including across international borders, and will reduce the risk associated with non-compliance. Regardless of the size of the business, handing over the management of the payroll function to a payroll services provider presents a massive opportunity to improve profitability and catalyse growth in the organisation.

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5
Why do companies use payroll services?

Perhaps the biggest reason businesses prefer to use the services of an outsourced payroll services provider is that they do not want the bother and inconvenience of payroll. They do not want frustrated employees every time pay day comes around. Instead they want accuracy and reliability, as well as someone to consult with if they have any queries. They also want to avoid incurring severe fines and penalties from SARS owing to non-compliance.

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6
What is a payroll bureau?

A payroll bureau is an accounting service provider that provides outsourced payroll services to other businesses. A payroll bureau acts on behalf of these businesses to SARS, providing the tax collection authority with information it requires, and also receiving and acting on information from SARS relevant to those businesses.

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7
What does a payroll bureau do?

A payroll bureau comprises a dedicated team of payroll consultants and administrators who provide an extensive spectrum of services to businesses that are integral in keeping businesses healthy. These include:

  • Generating pay runs (weekly, fortnightly or monthly)
  • Calculating benefits and reimbursements
  • Making deductions such as medical aid and pension/provident fund contributions
  • Ensuring the electronic payment of salaries with accompanying security-sealed payslips
  • Producing standard payroll reports
  • Processing employee tax certificates
  • Supervising statutory submissions
  • Submitting annual reconciliations

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8
What is meant by payroll outsourcing?

Outsourced payroll services give you access to a professional team of experts with specialised skills. Fully managed payroll services are specifically geared to optimising the payroll function so that your business can save money. This is particularly beneficial for multinational organisations that have a presence in different countries. A payroll services provider frees human resources, payroll and/or finance personnel from the administrative and legislative burden of managing payroll so that they can focus on tasks that are of more strategic importance to the organisation.

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9
What are the advantages of using outsourced payroll services?

Businesses are increasingly outsourcing their payroll function to improve efficiency, reduce operating expenses and alleviate risk. Regardless of the size of their organisation, all employers want their employees to be paid accurately and on time, every time. This enhances employees’ trust in the company, improves job satisfaction and drives a positive culture within the organisation.

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10
What are the pros and cons of outsourcing payroll?

Managing payroll is a time-consuming, complicated task that involves more than just paying employees. There are numerous legal requirements to comply with, which means the risk of making mistakes is high. Consequently, many companies prefer to outsource the management of their organisation’s payroll to a payroll bureau. However, they need to thoroughly analyse their requirements before choosing to go the outsourcing route.

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11
What happens when you outsource payroll?

Whether you run a small business, medium-sized company or a large enterprise, handing over the management of your payroll to a payroll services provider presents a massive opportunity to improve profitability and catalyse growth in your organisation.

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12
How do I find a good payroll services provider?

While there are several qualities to consider when choosing a payroll services provider, certain attributes should be at the top of your list:

  • Accuracy
  • Compliance
  • Security
  • Customised services
  • Reputation

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13
What’s the difference between in-house and outsourced payroll?

In-house payroll is managed by an organisation’s own employees while payroll that is outsourced is processed by a third-party company hired by the business. How you choose to run your company’s payroll depends on the industry in which you operate, the complexity of your payroll and other requirements unique to your business

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14
What is meant by HR outsourcing services?

Not every company – especially smaller to medium-sized businesses – has the resources to set up and run a fully-fledged HR division. Consequently, they look to an outsourced HR services provider to manage their human resources function. Many business prefer to use outsourced HR services because their HR function is too complex to manage in-house. In this way they are assured that all their employees’ needs are taken care of efficiently and professionally.

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15
What does an HR services provider do?

Outsourced HR services give you access to a professional team of experts with specialised skills. Depending on your organisation’s business needs, an outsourced HR services provider will proactively manage one or all aspects of your human resources function, from onboarding new employees and administering their compensation and benefits, to managing their training and development and a whole lot more.

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16
What are the benefits of using outsourced HR services?

As your business expands the change in processes that usually accompanies this growth can cause uncertainty among your employees. As you focus your attention on enhancing production and operations efficiencies, it’s just as important to ensure that your human resource processes do not fall by the wayside. Partnering with an HR services provider will help ease the burden on your human resources department and allow you to focus on your business objectives.

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17
Which legislation applies to payroll in South Africa?

No fewer than ten acts regulate the employer-employee relationship in South Africa, and each one incorporates specific rules for payroll. These are:

  • Companies Act
  • Basic Conditions of Employment Act
  • Labour Relations Act
  • Income Tax Act
  • Skills Development Act
  • Unemployment Insurance Act
  • Compensation for Occupational Injuries and Diseases Act
  • Workman’s Compensation Act
  • Employment Equity Act
  • Protection of Personal Information Act

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18
Why is legislative compliance important in payroll?

Managing payroll is complex, and the list of regulations and submissions your business must comply with is a long one. One mistake could cost you a substantial amount in interest, fines and penalties, not only from the South African Revenue Service (SARS), but also the Department of Employment and Labour.

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19
What are the benefits of cloud-based HR and payroll?

Owing to the cost benefits and efficiencies associated with cloud computing, many companies are eager to embrace it, especially as human resource teams face increasing complexities around HR and payroll in a post-pandemic world.

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20
Why should I invest in an HR solution for my company?

HR consulting entails providing all facets of human resource management as an external or outsourced provider. Not all companies have the resources to set up and run a fully fledged HR division, so they look to an HR consultant/services provider to manage their human resources function. In this way they are assured that all their employees’ needs are taken care of efficiently and professionally.

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21
What does HR consulting mean?

An HR solution automates and streamlines processes around the management of employees, thus simplifying administration while generating meaningful information for decision-making. It is also designed to ensure labour legislation compliance.

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22
Is outsourced HR services a good investment?

Human resources is a multifaceted function that involves onboarding new employees, administering their compensation and benefits, managing their training and development and a whole lot more. However, not every company has the resources to set up and run a fully fledged HR division. Many prefer to use outsourced HR services because their HR function is too complex to manage in-house. Using outsourced services offers a host of benefits, including cost savings, legislative compliance, an engaged workforce, better talent recruitment and improved employee performance. Additionally, it frees up valuable time to focus on core business activities.

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23
What is business process outsourcing?

Business process outsourcing (BPO) involves making use of third-party vendors or sub-contractors to carry out certain parts of business operations. There are two types of BPO – front office and back office. Front office outsourcing focuses on activities that are external to the company, such as marketing and customer service, while back office BPO is all about the internal facets of the business, such as payroll and human resources.

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24
What does a BPO provider do?

A BPO provider is a third party vendor that carries out certain parts of business operations on behalf of a company. BPO originated with large manufacturing companies needing assistance with supply chain management, but it soon grew to include all sorts of sectors, including services companies. Today, an extensive range of technical and non-technical services can be outsourced to a third-party vendor, and businesses of all types and sizes, across all industries, make use of BPO.

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25
What is Business Process Outsourcing (BPO)?

Business process outsourcing (BPO) involves making use of third-party vendors or sub-contractors to carry out certain parts of business operations.

There are two types of BPO – front office and back office. Front office outsourcing focuses on activities that are external to the company, such as marketing and customer service, while back office BPO is all about the internal facets of the business, such as payroll and human resources.

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26
What's the difference between outsourcing and insourcing?

Outsourcing involves hiring an independent external provider to carry out specific business functions, while insourcing means the function is performed by an individual, team or department within the company.

27
What is BPO payroll?

BPO (business process outsourcing) payroll, also known as payroll outsourcing, is when a company appoints an outsourced payroll services provider to manage its payroll function. Hiring a BPO payroll provider holds numerous benefits for businesses of all industries, sizes, types and locations, including improved efficiency, reduced operating expenses and less risk.

28
What defines a payroll bureau?

A payroll bureau is an accounting service provider that provides outsourced payroll services to other businesses. A payroll bureau acts on behalf of these businesses to SARS, providing the tax collection authority with information it requires, and also receiving and acting on information from SARS relevant to those businesses. A payroll bureau is also a source of professional expertise for its clients, which means they don’t have to employ their own in-house payroll specialist and can contact the payroll bureau whenever they have a query.

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29
What is employee self-service (ESS)?

Employee self-service (ESS) is a web-based system that enables employees to interact quickly and easily with the various human resource and finance solutions in their organisation. Employees can, for example, view and download payslips, apply for leave and update their personal information. The ESS system can be accessed from any location, on any device.

30
Why should your payroll include an ESS system?

An ESS (employee self-service) system enables employees to carry out various functions on their own, such as view and download payslips, access their payroll history, and upload payroll and benefits documents, all of which saves valuable time for the payroll department. Hours that would have been spent capturing and updating employee information can now be spent on improving the working environment and reducing staff-related costs.

31
What is human capital management?

Human capital management is a set of practices related to the human resources function. In other words, the management of a company’s employees across the entire employee lifecycle. This includes recruitment and selection, onboarding, employee development, retention, performance management and transition (resignation, retirement, retrenchment or dismissal).

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