MegaBanner-Right

MegaBanner-Left

LeaderBoad-Right

LeaderBoard-Left

Home » Industry News » Business Advisory & Financial Services News » Payroll legislation headaches? The right provider makes the difference

Payroll legislation headaches? The right provider makes the difference

Christine Painter, Head of Compliance at PaySpace:

Compliance issues remain the leading concern for finance, HR and payroll administrators. Over eighty percent of Deloitte’s Global Payroll Benchmarking Survey respondents cited compliance as a top area for focus and improvement and the primary feature they look for in payroll services. This preference was even ahead of accuracy (71%), self-service capabilities (63%) and reporting capabilities (61%). Together, these four areas show what payroll administrators want: more capacity, visibility, control and autonomy.

Legislation overarches these desires primarily because it demands so much attention. Ensuring compliance in one region is already a big task. For example, South African companies must adhere to the Income Tax Act, Unemployment Insurance Contributions Act, Skills Development Levies Act, and Employment Tax Incentive Act, as well as provide reports that meet the PAYE Employer Reconciliation Business Requirement Specifications and UIF Electronic Declaration Specifications.

These requirements are not static, adding considerably more pressure to the time and resources of payroll teams. Unfortunately, many companies drop this ball rather than reach the goal.

“While most people know the importance of staying up to date with new and changing legislation and regulations, many find it near impossible to do so,” says Christine Painter, Head of Compliance at PaySpace, a cloud payroll and HR solution provider. “With the frequent changes in legislation and complexities of regulations, many companies may be non-compliant and give little thought to the repercussions.”

Those repercussions are serious: hefty fines and sanctions, criminal charges, reputational damage, and lost opportunities. Nevertheless, even such risks are not enough to ensure that most organisations take care of payroll compliance – and the situation becomes significantly more complicated once a business operates across multiple jurisdictions.

Fix legislation with the right provider

Payroll administrators are realising that compliance will not become any easier, but modern payroll service providers can substantially ease the burden. According to Deloitte’s global survey, fifty-seven percent of companies already use a cloud-based payroll solution, and another seventeen percent are busy implementing such services. Compliance is a primary driver behind these adoptions because cloud solutions can enormously simplify legislative compliance.

“In Africa, customers need to have the peace of mind that many of the main challenges they are faced with are taken care of,” says Painter, who leads PaySpace’s compliance updates across 44 countries in Africa and the Middle East. ” This could range from accurately interpreting local legislation changes or releasing statutory updates timeously for submission periods. Cloud payroll technology automates mundane repetitive tasks, and improves compliance accuracy, efficiency and statutory reporting. The importance of what cloud software offers cannot be underestimated.”

A cloud payroll service solution has several advantages over company-owned software and outsourced third-party services. They enable companies to fully control their payroll operations without the responsibility of owning and maintaining the software. Cloud payroll solutions also extend numerous self-service, ad-hoc reporting, continual data collection, and process automation to all corners of the organisation.

Most important for compliance, providers can make changes to the software that resonates with all customers. If a law changes somewhere and the provider enacts that change, the affected customers get the updates without additional costs or manual update interventions. The right payroll solution provider can help fix compliance challenges for companies of any size and across numerous jurisdictions.

Staying informed on legislation

Cloud payroll solutions can radically minimise payroll compliance burdens. However, they do not absolve companies from those responsibilities:

“Employers need to keep themselves informed. Ignorance is not an acceptable excuse for non-compliance. Employers should surround themselves with experts, such as payroll software providers, auditors, and tax practitioners. If the customer does not have the internal infrastructure, outsourcing payroll for legislative compliance should be considered. But even then, the final responsibility lies with them, so they must also evaluate providers on how well they communicate statutory updates,” says Painter.

Providers must maintain active communications with their customers. For example, Painter and her team issue regular tax alerts, legislative release notes and compliance news to inform PaySpace’s customers about compliance matters:

“We make it our business to track, calculate and implement payroll legislation requirements so that we can update the software. That also gives us the ability to notify our customers, helping them stay up to date in a professional capacity and navigate the inevitable curveballs of sudden or vague changes to legislation. I believe this is as important as the software’s statutory legislation features. We take much of the administrative burden away from our customers, but we also help ensure they are informed because, ultimately, it remains their responsibility and strategic prerogative.”

The two roles of a top provider

A leading payroll solution provider must thus fulfil two roles: vastly improved solution with a combination of configuration and hosted automation and as a trusted partner who helps their customers stay informed and navigate the changes of legislative surprises. Beyond that, the solution and its people must deliver on other fundamentals: fast reporting, easy self-service for employees and management, company-wide enablement, and establishing payroll as a key part of corporate strategy.

“Businesses that use payroll systems that are not in the cloud struggle a lot with the constant changes we are faced with in compliance,” says Painter. “An effective payroll compliance strategy starts with using the best tools. The days of legacy software, manual sheets and reporting after the fact are over. Companies simply must have access to the information they need in real-time to pinpoint the impact and have the ability to make decisions quickly.”

To enquire about Cape Business News' digital marketing options please contact sales@cbn.co.za

Related articles

AI and ethics: Are we sacrificing morality for progress?

Artificial intelligence (AI) adoption has increased in recent years. In 2018, those companies who were actively using AI only devoted 5% of their digital...

How automation is reshaping payroll

Payroll automation is the future. Yet, many companies are still concerned about the change and its perceived risks. In the past several years, Ayanda's workload...

MUST READ

City delivering real change

Behind every budget line, every policy, and every project there are real people, real challenges, and a shared future we are shaping. In a...

RECOMMENDED

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.