Frequently Asked Questions

Why can't I finalise my payslip?

There are various reasons why you may not be able to finalise a payslip. The most common reasons are:

• The nett pay amount is negative: You can click on Skip Items to remove some of the items from the payslip that may be causing it to go into a negative. Once the payslip no longer has a negative nett pay, you'll be able to finalise the payslip.
• The previous payslip is not finalised: You won't be able to finalise a payslip if the previous payslip hasn't been finalised.
• "All" was not checked when bulk finalising payslips: When finalising payslips in bulk, you have the option to exclude some payslips. To finalise all payslips, you have to either select each employee or select 'All' at the top when you see the list of employees whose payslips can be finalised. More information about bulk finalising payslips is available on our Pay Runs help page.

How do I capture daily paid employees?

By default, SimplePay doesn't currently support the input of daily rates and days worked; however, you could create a custom income item with the Input Type "Custom rate * quantity". The Hours worked factor should be the number of hours that your employees work in a day. You'll also be able to set a Different rate for every employee by ticking the box.

More information about custom items can be found on the Custom Items help page.

Once the custom item has been created, it can be added to each payslip by clicking on Add (next to Regular Inputs), or in bulk by going to Employees > Bulk Actions > Regular Inputs, selecting it from the drop-down menu and ticking Add for each employee. If you had ticked the box next to Different rate for every employee while creating the custom item, you would also have to enter the rate for every employee.

To enter the number of days, you could either click on the item's name under Payslip Inputs for each employee or go to Employees > Bulk Actions > Payslip Inputs, select the item and enter the number of days.

Setting employees as hourly paid

When using this option, it is recommended to also set the employee(s) as hourly paid, which can be done from the Regular Hours or the Basic Salary screen, and capturing an hourly rate for them. This rate is used to calculate things like leave pay when leave is recorded for employees who do not earn a fixed salary.

• For example, an employee who is paid R 160 per day and works eight hours a day, would have an hourly rate of 160 / 8 = R 20 per hour.

An alternative to using a custom income item would be to treat your daily paid employees as hourly paid employees. This would also require you to calculate their hourly rate, as described above. Additionally, you would have to convert their number of days worked to an equivalent number of hours worked.

• For example, if you have a daily paid employee whom you want to pay on a weekly basis, you would do the following calculation: number of days worked × number of hours worked per day. Therefore, if your employee worked five days in a particular week and eight hours per day, you would enter 5 × 8 = 40 hours as their normal hours for that week.

More information about entering employee hours can be found on the Entering Employee Hours help page.

How does the pro-rata calculation work?

The explanations below refer to months but the same concepts apply to employees with other pay frequencies – simply substitute "month" with "week" / "fortnight".

Why is there a pro-rata percentage on my payslip?

A pro-rata percentage is calculated automatically for salaried employees whenever a payslip is not for a full month. This usually occurs in one of three situations:

• The employee started employment during the month.
• The employee's service ended during the month.
• The employee worked for a full calendar month but your pay frequency ends on a day other than the last day of the month.

How is the pro-rata percentage calculated?

There is no set requirement for calculating pro-rata percentages, either from SARS or in the relevant legislation, so employers may choose the method they prefer.

SimplePay calculates the pro-rata percentage as days employed / days in a payroll period × 100. The following examples illustrate how this is used in each of the three situations mentioned in the previous section:

• If your pay frequency ends on the last day of the month and an employee starts on 15 March, the pro-rata percentage will be 54.84. This is calculated as 17 / 31 × 100, where 17 represents the days employed and 31 is the total days in the month of March.
• If your pay frequency ends on the last day of the month and an employee's service is ended on 20 April, the pro-rata percentage will be 66.67. This is calculated as 20 / 30 × 100, where 20 represents the days employed and 30 is the total days in the month of April.
• The employee worked for a full calendar month but your pay frequency ends on a day other than the last day of the month. For example, if your pay frequency ends on the 25th of the month and an employee starts on the 1st of June, the pro-rata percentage will be 80.65. This is calculated as 25 / 31 × 100, where 25 represents the days employed and 31 is the total days in the current payment month (26 May to 25 June).

How do I change the pro-rata calculation used?

As mentioned in the previous section, there are no set rules for calculating pro-rata percentages, so you may override the calculated value to conform with the calculation generally used by your company.

The most common alternative to the above calculation is days worked / working days in a payroll period × 100:

• For example, if an employee works Monday to Friday and starts employment on 22 June 2016, the pro-rata percentage would be 31.82. This is calculated as 7 / 22 × 100, where seven is the number of days the employee worked and 22 is the number of working days for this employee in June 2016.

To change the pro-rata calculation method:

1. Go to Settings > Payroll Calculations > Pro-rata Method.
2. Select "Working Days" as the Pro-Rata Method and the date that you want to start using this pro-rata method for.
3. Click Save.

You may wish to pay an employee their full salary even though they did not work the full period. You can do this by overriding the pro-rata percentage to 100.

To override the pro-rata percentage, go to the employee's profile and click on the pro-rata percentage on the Payroll tab. Then enter the percentage you would like the system to use.

The tax calculation will still use the calculated pro-rata percentage using the calendar days method, in line with SARS's requirements.

Which items are pro-rated?

The main purpose of the pro-rata percentage is to ensure accurate tax calculations; therefore, it is currently only automatically applied to the Basic Salary as a convenience.

You can enable the pro-rata calculation for custom items that are Income, Allowance or Deduction items if they have been set up with the Input Type as "Fixed Amount" or "Enter Amount Per Employee".

More information on custom items can be found on the Custom Items help page.

If any other system or custom items need to be pro-rated, you'll need to manually calculate these and enter the relevant amount.

How do I roll over to next pay period or tax year?

Moving to the next pay period

Unlike most other systems, there is no need to manually close off a period and/or generate a payslip for the next pay period. On SimplePay, once you finalise a payslip, the system will automatically generate and take you to the next period's one.

There is also an option to manually create payslips but this should not often be necessary. Please see the Add a Payslip help page for more on this.

Doing a year-end

There is also no need to do a manual year end as in other payroll systems – simply continue processing payslips into the new tax year.

When you need to do your filing, the correct period will automatically be used and the relevant documents will be generated.

Why can't I remove an Employer Loan from a payslip until the balance is settled?

This is to avoid human error, where an Employer Loan with a non-zero positive balance is mistakenly removed. Based on feedback received from our customers, we improved this functionality to confirm that it's not too simple to accidentally remove an Employer Loan. Also, it caused discrepancies in reporting because removing the Employer Loan item does not delete its history from the system or reports. Finally, the item cannot be restored once it has been removed. Therefore, we made a change to allow only zero balance items to be removed.

My employee repaid their loan outside of payroll. How do I record this so that I can remove the Employer Loan?

You can still record the repayment via the SimplePay Employer Loan item to show that the loan has been repaid outside of payroll, and then remove the Employer Loan from the payslip. Please see the steps below.

1. Go to Employees, and select the relevant employee.
2. Click on Employer Loan under Payslip Inputs.
3. Enter the amount in the Once-off Repayment field.
4. Tick the Cash/EFT repayment (no effect on payroll) box.
5. Click Save.
6. Finalise the payslip. The Employer Loan will now have a zero balance and can be removed from the next regular payslip, by going to Regular Inputs.

Accounting impact

You are indicating to the system that this repayment happened outside of payroll; as a result, it will not be reflected in SimplePay's Accounting Info (report) as it has no impact on Nett Pay. Therefore, even if you have set up your accounting integration with Xero or QuickBooks Online, you would need to manually account for the repayment in your accounting system.

Why can't I remove Savings from the payslip until the balance is paid out?

This is to avoid human error, where a Savings item with a non-zero positive balance is mistakenly removed. Based on feedback received from our customers, we improved this functionality to confirm that it's not too simple to accidentally remove a Savings item. Also, it caused discrepancies in reporting because removing the Savings item does not delete its history from the system or reports. Finally, the item cannot be restored once it has been removed. Therefore, we made a change to allow only zero balance items to be removed.

I paid out my employee's savings outside of payroll. How do I indicate this on SimplePay so that I can remove the Savings item?

Once you've added a Savings item under Regular Inputs, a Savings Deduction will continue to be made on the payslip until you change the Regular deduction to zero, or you remove the Savings item. However, before the Savings item can be removed, it has to have a zero balance. The steps below can be used to record a savings payout, to get a zero balance on the Savings item so that it can be removed.

1. Go to Employees and select the employee.
2. Click on Savings under Payslip Inputs.
3. Tick the Pay out on current payslip box, as well as the Paid out to third party box (which will appear after the first box is ticked). This tells the system that there was a payout of the employee's savings during the current period, but that it should not affect Nett Pay.
4. The Payout amount will default to the full savings amount. (Do not edit this unless you are recording only a partial payout that happened outside of payroll.)
5. Click Save.
6. Finalise the payslip. You can now remove the Savings item from the next regular payslip, by going to Regular Inputs. Confirm you change the Regular deduction to zero, or remove the Savings item – before another Savings Deduction is made. Otherwise, the item will have a non-zero balance again, in which case it cannot be removed.

Accounting impact

You are indicating to the system that this payout happened outside of payroll; as a result, it will not be reflected in SimplePay's Accounting Info (report) as it has no impact on Nett Pay. Therefore, even if you have set up accounting integration with Xero or QuickBooks Online, you would need to manually account for the payout in your accounting system.

Why can't I remove a Garnishee from a payslip until the balance is settled?

This is to avoid human error, where a Garnishee with a non-zero positive balance is mistakenly removed. Based on feedback received from our customers, we improved this functionality to confirm that it's not too simple to accidentally remove a Garnishee. Also, it caused discrepancies in reporting because removing the Garnishee item does not delete its history from the system or reports. Finally, the item cannot be restored once it has been removed. Therefore, we made a change to allow only zero balance items to be removed.

My employee settled the outstanding balance on a Garnishee item outside of payroll. How do I indicate this on SimplePay so that I can remove the Garnishee item?

The steps below can be followed to record a garnishee payment that happened outside of payroll and get a zero balance on the Garnishee item so that it can be removed from the payslip.

1. Go to Employees and select the relevant employee.
2. Click on Garnishee under Payslip Inputs.
3. Enter a negative value in the Increase balance field to reduce the balance. For example, if there was R 500 left on the Garnishee and the employee paid it in cash, you would enter -500 in the Increase balance field. This tells the system that the Garnishee balance is now zero, and that no further Garnishee Deduction should be made on the payslip.
4. Click Save.
5. Finalise the payslip. You can now remove the Garnishee item from the next regular payslip, by going to Regular Inputs.

Accounting impact

You are indicating to the system that this payment happened outside of payroll; as a result, it will not be reflected in SimplePay's Accounting Info (report) as it has no impact on Nett Pay. Therefore, even if you have set up accounting integration with Xero or QuickBooks Online, you would need to manually account for the payment in your accounting system.

Does foreign service income affect the taxable income calculation for a subsistence allowance?

Yes, foreign service income will affect the taxable income calculation for a subsistence allowance paid out on the same payslip. Foreign service income is not reported under the standard income tax codes, as SARS has prescribed specific codes to correctly track foreign service income, and the application of the cap on taxable income. Therefore, there are some differences in how a subsistence allowance is calculated and reported; please see the examples below on how the subsistence allowance will be reported on the IRP5 if foreign service income is earned.

1. An employee earns only foreign service income and receives an international subsistence allowance.

   • Code 3764 Other allowances (Non-Taxable)(Foreign)
   • Code 3765 Subsistence allowance – foreign (exceeding deemed amount)(Foreign)

2. An employee earns only foreign service income and receives a local subsistence allowance.

   • Code 3764 Other allowances (Non-Taxable)(Foreign)
   • Code 3704 Subsistence allowance – local (exceeding deemed amount)(Foreign)

When an employee earns both foreign service income and local income, the subsistence allowance must be apportioned to account for the ratio of local income to foreign service income. Please see the examples below.

Example - Both foreign and local income

We will use these payslip values below for both examples. For March, an employee earned the following:

• R 50,000 foreign service income
• R 24,000 local income
• R 10,000 subsistence allowance (R 4,000 of the subsistence allowance is below the limit, and R 6,000 is above the limit.)
• Therefore, the total taxable income is: 50,000 + 24,000 + 6,000 (above the limit) = R 80,000

First, we must calculate the amount reported under local income. The formula for the local income portion is (local income ÷ total taxable income) × subsistence allowance. We can then use the local income amount to calculate the amount reported under foreign service income.

• Below the limit: (24,000 ÷ 80,000) × 4,000 = R 1,200. Therefore, R 1,200 will be reported under local income, and (4,000 – 1,200) = R 2,800 will be reported under foreign service income.

• Above the limit: (24,000 ÷ 80,000) × 6,000 = R 1,800. Therefore, R 1,800 will be reported under local income, and (6,000 – 1,800) = R 4,200 will be reported under foreign service income.

It will be reported as follows – depending on whether the subsistence allowance was an international or local one:

1. International subsistence allowance with both local and foreign service income.

   Local income portion:

   • Code 3714 Other allowances (Non-Taxable) – R 1,200
   • Code 3715 Subsistence allowance – foreign (exceeding deemed amount) – R 1,800

   Foreign income portion:

   • Code 3764 Other allowances (Non-Taxable)(Foreign) – R 2,800
   • Code 3765 Subsistence allowance – foreign (exceeding deemed amount)(foreign) – R 4,200

2. Local subsistence allowance with both local and foreign service income.

   Local income portion:

   • Code 3714 Other allowances (Non-Taxable) – R 1,200
   • Code 3704 Subsistence allowance – local (exceeding deemed amount) – R 1,800

   Foreign income portion:

   • Code 3764 Other allowances (Non-Taxable)(Foreign) – R 2,800
   • Code 3754 Subsistence allowance – local (exceeding deemed amount)(foreign) – R 4,200