PSIber Group (Pty) Ltd

Payroll  Month-End

Blueprint Summary

This section provides guidelines on elements that should be in place according to best practice when processing payroll month end.

The following principle should be kept in mind throughout the month-end process:

  • Amounts processed in Payroll should be equal to the values processed in the accounting software, and that should be equal to the amounts that are declared and paid to stakeholders (Ex. Employees) and providers (Ex. SARS, Momentum, Liberty, Discovery).

All reconciliation exercises should aim to fulfill equilibrium between these three areas. If a change is made to Payroll, for example, its effects on accounting and third parties involved should also be considered and addressed.

Process flow

Process Specification

Process Owner

Stakeholder(s)

Recording Requirements

Storage Requirements

  • Head of Payroll
  • Employees
  • Payroll Department
  • Finance Department
  • Payroll Third Parties
  • Not Applicable
  • Keep all proof of declarations and payments to third parties on file for a minimum of 5 years. (SARS requirement), after that in digital format.

Reporting Requirements

Audit Requirements

Notifications

Reminders

  • EMP201
  • Payslip Analysis
  • Payroll Reconciliation
  • Medical Aid Contributions and Corrections
  • Fund Contributions and Costs
  • Loan Repayment Summary
  • Variance Report
  • Company General Ledger Summary
  • To be reviewed
  • Not Applicable
  • Not Applicable

Transparency & Communication

Knowledge & Skills

System

Workflows

  • Open communication between Payroll and Finance.
  • Working knowledge of basic accounting and the laws affecting payroll.
  • Payroll Management
  • Reports & Extracts
  • Security /User Access (User Access needs to be set up to enforce Segregation of Duties)
  • Not Applicable

Legislation & Governance

Templates, Forms, Guides and Work Instructions

  • Income Tax Act
  • Skills Development Levy Act
  • Unemployment Insurance Fund Act
  • Protection of Personal Information Act
  • Payroll Policy
  • EMP201
  • UI19


THE Process

The Process

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

  • Payroll Policy
  • Payroll Legislation
  • Third-Party Agreements
  • Payroll Processing Schedule / Flowchart
  • Application of segregation of duties.

Outputs are all of the desired Outcomes when the Process has been completed successfully.

  • Payroll figures balance to Payroll related figures in Accounting Software, and this balances back to the declarations and payments for third parties.
  • A Payroll Representative generates the EMP201 report for each payroll / legal entity and sends the reports through to Finance / FHIRST to complete the declaration and payment to SARS via E-Filing.
  • A Payroll Representative generates and sends a UI19 Electronic submission file to the Department of Labour.
  • Should the company belong to an industrial council, either a Payroll Representative or the Fund Manager or FHIRST should complete any declarations required by the council.
  • All applicable fund schedules should be updated and balanced back to payroll totals per fund by the Benefits Manager (Medical Aid, Retirement Funds, etc.).
    • If there is a difference arising from an overpayment made to a third-party, an instruction should be sent to Payroll to correct the imbalance by addressing the overpayment in the next payroll cycle.
    • If there is a difference arising from an underpayment of a third-party, an instruction should be sent to Finance to rectify the underpayment immediately and Payroll should be notified to address the underpayment in the next payroll cycle.
  • Any other third-party accounts should be reconciled to third-party schedules/requisitions by Payroll in the course of Payroll Checking.
  • All final payroll totals resulting from third-party recons should be sent to Finance.
  • Finance should then:
    • Import payroll information into the accounting system (Create General Ledgers)
    • Ensure that all third-party accounts are settled timeously.
    • Reconcile the Payroll Account.

Perform a budget reconciliation by doing a comparison of how each payroll related expense to the value budgeted for the particular month. 

  • Revision Number 02
  • Created by: Maartin van der Schyff
  • Approved by: Zene Olivier
  • Date: 01/07/2018