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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32
What’s the difference between ESS and MSS?

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.

Manager self-service (MSS) is specifically geared to manager activities. Mid-level managers log in securely to their individual accounts, which gives them immediate access to their employee information and thus enables them to prioritise and complete tasks and functions applicable to their employees.

Just as ESS empowers employees to perform various functions on their own, MSS systems empower managers to make informed decisions related to their employees.

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33
Does outsourced payroll save money?

As your company grows, so does the expense of managing your payroll in-house. The cost of calculating salaries, printing payslips, keeping up with legislation, maintaining software and ensuring your data is secure can quickly escalate out of control.

Fully managed payroll services are specifically geared to optimising the payroll function so that your business can save money.

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34
What is HR outsourcing?

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.

Read more

35
What are the benefits of HR outsourcing?

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. The benefits of HR outsourcing include:

  • Cost savings
  • Legislative compliance
  • Business owners are free to focus on their core business
  • An engaged workforce
  • Better talent recruitment
  • Improved employee performance

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36
What are the most important features of an ESS system?

ESS systems are specifically geared to automating important human resource and payroll tasks, but selecting an employee self-service system is not a five-minute exercise. Although they come with an extensive range of features and functions, not all are necessarily suitable for your organisation. Functionality such as accessibility, a user-friendly interface and the protection of data contained in the system are critical. If you have an ESS system with the correct capabilities, the benefits will quickly permeate throughout the business.

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37
Do HR services save time and money?

The cost of an in-house HR division can be high because it has so many responsibilities. Choosing to invest in outsourced HR services is ultimately more cost-effective because it helps to lower your overhead expenses.

Additionally, using an outsourced HR services provider frees business owners to focus all their energies on profits and other core business activities.

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38
Why is a payroll system important?

Payroll systems are not a luxury, but a business necessity. Investing in a payroll system that automates the payroll process mitigates errors, ensures compliance and saves valuable time, thereby creating space for other essential business projects that generate revenue.

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39
What is a global payroll system?

Just as payroll processing is defined as the process of paying the employees who work for a company, so a global payroll system manages the salaries and benefits of employees across multiple countries. Having a reliable, integrated payroll system that can manage payroll for globally located employees from a single platform is critical for international companies. Cloud technology plays a pivotal role in global payroll systems, enabling international companies to work with one solution or service provider that takes care of the entire organisation’s payroll needs.

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40
What are the benefits of a global payroll system?

An effective global payroll system enables your organisation to:

  • Quickly and easily expand to new international markets;
  • Hire new staff worldwide;
  • Reduce the risks associated with non-compliance of local legislation and regulations;
  • Enhance data accuracy, reliability and accessibility;
  • Ensure data security;
  • Keep accurate track of global processes within the organisation;
  • Ensure employees get paid accurately and on time, wherever in the world they are located;
  • Create a positive company experience for all employees, in each country of operation;
  • Enhance employee retention.

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41
How does a global payroll system work?

Having a reliable, integrated payroll system that can manage payroll for globally located employees from a single platform is critical for international companies. Cloud technology plays a pivotal role in global payroll systems, enabling international companies to work with one solution or service provider that takes care of the entire organisation’s payroll needs.

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42
What are the challenges of global payroll?

Expanding your company’s presence to different countries also means having to consider different languages, time zones and cultures, all of which impact the organisation’s global payroll in one way or another and can become a minefield to navigate if not managed correctly. Issues of compliance, compensation and data security regulations for each country of operation also need to be considered.

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43
What’s the difference between in-house payroll and payroll services?

In a nutshell, an in-house payroll is one managed by the company’s own team, while payroll services are provided by a third-party provider.

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44
What is in-house payroll?

In-house payroll is when the organisation uses its own internal team (usually from the human resources or finance departments) to manage the payroll for the company. The payroll team usually makes use of purchased and installed payroll software to do this. Because the payroll team comprises employees of the company, they are paid through the same system they manage.

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45
What is meant by payroll services?

A payroll services provider carries out payroll functions on your company’s behalf. The extent of the service provided depends on your specific business requirements. Fully managed payroll services are specifically geared to optimising the payroll function so that your business can save money.

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46
What does payroll global localisation mean?

Global localisation, or ‘glocalisation’, can be defined as the global distribution of a product and/or service which has been adapted to suit the specific requirements of the various local markets in which it is offered. When it comes to human resources and payroll software, this means tailoring the solution to align with each country’s labour and compliance legislation and regulations.

Read more: What is global localisation, and what does it have to do with payroll?

47
Is a locally developed HR and payroll solution better for South African small businesses?

There are four main reasons why South African companies should strongly consider a locally developed human resources and payroll system rather than an international solution:

  • Complex South African payroll legislation
  • Localisation to unique South African conditions
  • Prioritised customisation
  • Flexibility supports global expansion

Read more: Why small businesses should choose a South African HR and payroll system

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