Fundamental Payroll Compliance

Fundamental Payroll Compliance

Blueprint Summary

This document provides details pertaining to the registration, procedural and policy related requirements that need to be in place for a payroll process aligned to best practice requirements. It also advises on the touchpoints to be considered for payroll system setup.


HR and Payroll Management



Managing and setting up of new or existing companies/ payrolls in the system is a critical element within the Group. It is important to understand that all settings & parameters in the system need to be 100% aligned with all of the requirements demanded by the Blueprints. Any deviations from this will result in the specific company/ payroll to not meet the Group prescribed standards.

To eliminate the risk as highlighted above, the responsibility of Managing/ setting up of companies/ payrolls will strictly reside with the PSIber Implementations Department. The Department has been carefully trained on how to align the system with the requirements demanded by the Blueprints. In addition to this, Divisional users will have restricted access to these critical elements within the system. This will be governed by the Group System User Rights Framework.


New Payrolls

Once a Division has identified the need for a new company/ payroll in the system, approval needs to be obtained on Group level as per the Group Approvals Framework – New Companies & Payrolls. As soon as approval has been received, a ticket with the PSIber Support Helpdesk needs to be logged and escalated to the implementations department. It is also important to note that the user needs to include the type of payroll desired when logging the ticket. 


Types of Payrolls

The following Payroll Types are the only types allowed on the system:

• Applicants Payroll

• Normal Earnings Payroll (Monthly, Fortnightly, Weekly)

• Disability Payroll

Other Payroll types such as “Casual Labour” are not allowed. 


Existing Payrolls

Requests for changes to the setup of any existing company/ payroll should be made via the PSIber Support Helpdesk.  This should be clearly motivated by the user on the Ticket and will then evaluated by the PSIber Support/ Implementations team, as to ensure that no deviations on Blueprint standards occur.

Process flow

Process Specification

Process Owner


Recording Requirements

Storage Requirements

Reporting Requirements

Audit Requirements



Transparency & Communication

Knowledge & Skills



Legislation & Governance

Templates, Forms, Guides and Work Instructions

The Process - Payroll Policy and Procedures

Inputs are all of the Elements deemed necessary to complete the process successfully.

  • Applicable Legislation (Listed in Specifications Section)
  • Requirements from Industrial Council
  • Milestones for Payroll Process
  • Payroll Processing Schedule / Flowchart
  • Payroll Policy
  • Payroll Procedures
  • Draw up a Payroll Processing Schedule/Flowchart with deadlines for all the applicable payroll cycles with consideration to contractual deadlines applicable to third-party providers and statutory deadlines for declarations and payments. Levels to consider:
    • Payroll cycles (Can have 1 to 5 or more per month depending on payment frequency)
    • Month-end cycles (To complete month end reconciliations, declarations and third-party payments
    • Timeframe to gather employee queries.
    • Timeframe to gather third-party queries.
    • Timeframe to action changes arising from queries.
    • Indicate when increases for various providers normally happen.
    • Indicate when bonuses are normally paid.
    • Good to indicate Public Holidays or company closing times (December)
    • Stipulate times dedicated to PAYE reconciliations.
  • Ensure that the schedule/flowchart is available to employees, managers and other stakeholders and to serve as the basis for payroll assurance audits.
  • Draw up a Payroll Policy and Procedures that covers the following:
    • Payroll process, purpose and goals
    • Ensure that segregation of duties is implemented to mitigate fraud and risk.
    • Earnings are paid accurately and on time as stipulated in employment contracts.
    • A process to follow when a payroll query arises.
    • Withholding statutory payments as required by law and paying it over to the government and the process followed to reconcile the declared amounts to the amounts on the payroll system and the payments made (accounting system).
    • The process followed for any permanent changes to employee packages before they are actioned. (Example: Changes in Retirement Fund due to legislation, Garnishee order deductions.)
    • The process followed for employee terminations and a workflow to be made available to all stakeholders. Note: Although it is common practice to pay employees leaving the company on their last working day, there is no legal requirement to do so)
    • Approved deductions and the payment of those amounts to relevant parties.
    • Clear standards on what source documents to be used for payroll input for each payroll process (Example: New Employee: Take on Form, On-boarding checklist, Copy of ID, etc.). This should be aligned with the delegation of authority.
    • Accurate and timely reporting on Payroll costs (Salaries, Wages and third-parties).
    • Consider all the applicable legislation, statutory requirements, collective agreements and union agreements that affect payroll.
    • Address payroll cycles applicable for the business (Monthly, Weekly, fortnightly)
    • The flow of employment information from and into different departments (HR/ Payroll / Finance)
    • How compliance to the POPI (Protection of Personal Information Act) is ensured (Process for handling, retention and destruction of personal information).
    • The approach to be followed by the company when structuring employee packages (This might also be included in the Rewards and Recognition Policy, the HR Policy or be determined by sectoral agreements or industrial council agreements.)
    • The difference between salary paid employees, wage-paid employees and contractors.
      • Example:
        • For salary paid employees the annual salary amount is divided by 12 or 13 (if there is a guaranteed 13th payment) to calculate the monthly amount to be paid. They are paid for the time employed.
        • Waged employees are paid for time worked in a particular month, week or fortnight. They receive a certain amount per hour/day.
      • How time input is managed.
      • Special or additional payments scheduled for published deadlines and how they are managed.
      • Payroll verification and checking processes and how any errors arising are addressed
      • Procedure for finalising payroll.
      • How payslips and iRP5’s will be distributed
      • Tax and deduction remittances to external parties
      • How payroll transactions are transferred to the financial system
      • How payroll transactions translate into financial statements. (Diagram of the breakdown)
      • Extraction and distribution of payroll reports.
      • Analysis of payroll data (payroll analytics)
      • Workflow of the process to be distributed to all stakeholders.
  • Ensure that a process is in place to make employees and managers aware of the payroll policy and what the related deadlines and responsibilities are.
  • Ensure that payroll processes are aligned with governance, risk and compliance frameworks to ensure all the necessary controls are in place to manage payroll.
  • The South African Payroll Association drew up a code of conduct for payroll professionals which is regarded as an industry standard for any individual employed in the payroll industry. Knowledge and adherence to the code is encouraged.