Are you considering outsourcing payroll? Processing payroll can be a time-consuming task for any busy business owner. That said, payroll is one of the most crucial tasks. Hence, it would help if you outsourced your payroll to a registered accounting firm like MGT. In this blog, we highlight four reasons why you should consider outsourcing payroll. But first, let’s start by answering this question:
Why is payroll crucial?
Payroll is one of the most critical aspects of running a business. With payroll, you’ll ensure that your employees receive the correct monthly remuneration. Why? Because if you don’t pay your employees on time, that may harm your employee morale and performance.
Still, managing payroll involves more than just processing salaries for employees. It requires tracking hours worked, calculating employees’ pay, tax, pension fund, UIF calculations, creating payslips, and distributing payments via direct deposit to employee bank accounts.
Processing payroll inaccurately or failing to register with government authorities can cost your business thousands in penalties. To avoid this, you can outsource payroll to a registered payroll provider.
Here are four reasons you should outsource payroll:
- Monthly Payroll Processing & Payslips
One of the major benefits of outsourcing payroll is that you’ll know that all your employee’s payslips will be processed accurately. Your employees will receive accurate payslips every month. Payroll will also simplify the accounting process and help your company stay compliant.
2. Monthly Submissions to SARS/UIF
Once you determine each employee’s gross salary, the next step will be to deduct tax. But there are pre-tax deductions that apply, for instance, UIF. According to the department of labour, the contribution that employers must deduct from a worker’s pay is 1% of the worker’s total earnings, excluding commission.
In addition to the 1% deducted from the worker, the employer also contributes 1% for every worker that they employ. The total contribution paid to the UIF is, therefore, 2%.
The UIF will provide short-term payments that will cover your employees for a short period. For instance, if one of your employees cannot work because they are on maternity leave.
Penalties for errors, omissions, or late payroll tax filings can be very costly. Fortunately, SARS eFiling is online software that any business or individual can use to submit tax returns. Outsourcing payroll will allow you to register on the system, submit returns, or view your tax status and make payments to SARS electronically.
3. Human Resources Policies & Management
Government rules and regulations are constantly changing, and it’s hard for a busy business owner to stay on top of these changes. On the other hand, payroll providers are familiar with all the rules and regulations.
A payroll provider will take care of all HR policies and management of employees. Remember, all companies in South Africa must comply with specific policies and guidelines for hiring, work processes, compensation, leave, training, promotion, work environments, and termination.
A payroll provider offers the following benefits:
- They enable your company to comply with all employment legislation and best practices.
- They clarify your managers and employees on employment legislation, policies, and best practices.
- They provide a consistent and precise response across the company in dealing with situations.
- A payroll provider puts your organisation in a better position to defend claims.
4. Reduce costs today!
If you want to reduce costs in your business, one of the effective ways to do this is outsourcing payroll. If your company hires less than 200 employees, there is an excellent chance that your business will save money by outsourcing MGT Accounting. Want to find out? Reach out to MGT today! Email firstname.lastname@example.org