So, you have finished choosing and registering your company name; you have set up a company bank account and registered your company for the relevant taxes; if you plan to trade internationally you have registered for an import/export license; it is time to set up an employee payment system.
What is PAYE?
You will need to set up Pay As You Earn (PAYE), Unemployment Insurance Fund (UIF), Skills Development Levy (SDL), and Workers Compensation Assistance (WCA).
PAYE or Employee’s Tax is a monthly tax deducted from the salaries of your employees to ensure that their yearly tax is paid. PAYE allows your employees to be relieved of their tax paying duties and, instead of in a lump sum, PAYE allows you to pay SARS your employee’s tax for them on a monthly basis.
Registering for PAYE
You will need the following to registering for PAYE:
- Estimated salaries per annum
- Date you will be liable to pay PAYE
Note: you will need to be registered for income tax before you can complete this process
WHAT ARE UIF AND SDL?
You contribute to your employees’ UIF monthly to ensure that your employee have short-term financial relief should they become unemployed or cannot work due to maternity or adoption leave, or falling ill. In cases where an employee dies, UIF provides short-term financial relief for your employee’s dependants.
The Skills Development Levy is a monthly payment reserved for promoting learning and skill development in your employees. By registering for SDL you are liable to pay 1% of the total salaries paid to your employees as an SDL payment monthly. Unless your monthly salaries sum up to R500 000 over 12 months, you are not automatically liable to pay SDL. However if you expect your salary payment to your employees to be R500 000 over the next 12 months you are liable to pay SDL.
Registering for UIF and SDL
The following documents are required to register for UIF and SDL (completed as one application):
- PAYE registration number
- Registered name of your business
- Registration number of your business
- ID of every one of your directors
- Residential and business addresses or every one of your directors
- Contact numbers for your business
- E-mail address for your business
- The number of your business’ employees
- Date you will be liable to pay UIF by
- Full names, ID numbers, and remuneration of every one of your employees
- Dates of every one of your employees’ employment
PAYE, SDL, and UIF with SARS
Download the Registration form for Payroll Taxes with SARS – PAYE, SDL, and UIF
What is WCA?
Workers Compensation Assistance is aimed at recovering losses that occur when processing injury or duty claims. WCA benefits for employees and employers to make sure that claims are settles fairly and justly.
Registering for WCA
You will need the following documents to register for WCA:
- Company registration documents from CIPC
- You will need to be registered for UIF and will need the registration number
- A description of the nature of your nosiness
- Date on which your first employee was employed
- Number of employees currently employed (excluding directors)
- The total cash earnings of your employees
- The total cash earnings of your directors
- Certified copies of every one of your directors’ Identification Documents (ID)
- Certified copy of the ID of the company representative signing WCA form and personal particulars
- Address of your business
- Your company banking details; bank, account number, branch code, type of account, account holder