Presented by Sage

The ultimate guide to wrapping up bonuses and year-end payroll

 ·23 Nov 2022

The end of the year is a challenging time for payroll and HR professionals as they must handle all bonuses, annual leave payments, public holiday remuneration and much more.

This stress can become overwhelming – but if you are prepared and have the right tools, the process is manageable.

We have outlined the key considerations when managing and executing bonuses and year-end payroll over the coming days.

Account for tax

One of the most challenging parts of year-end payroll management is dealing with all the tax ramifications of your payroll obligations.

Sage research shows that 77% of payroll and HR professionals say they struggle to understand complex payroll taxes.

One of the most important things to consider is, depending on an employee’s current salary, giving them a bonus can push them into a new tax bracket – which can lose them money overall.

You must also remember to appropriately report other cash bonuses – like vouchers – on your tax sheets.

You can access SARS’s guidelines for reporting these payments here.

Value of automation

The right cloud HR and payroll solution can take the stress out of running and managing your payroll by leveraging the power of automation.

There are many benefits of automation in payroll management, including:

  • Data accuracy – Automation makes it easy to calculate employee salaries and deductions and removes the risk of human error.
  • Reporting to SARS – Automated solutions simplify the submission of reconciliations and payroll data to SARS.
  • Payslip management – Manual payslips are tedious and inefficient – instead, you can email payslips, or even make them available to your employees online.
  • Compliance – Cloud-based solutions automatically update as legislation and regulations change – ensuring you remain compliant.

Year-end payroll checklist

A great way to make sure you complete your payroll processes effectively is to create a checklist of things to do.

Here’s what you must remember to do before processing your final payroll:

  1. Confirm employee information – If you use a cloud-based HR and payroll solution, employees can update their details using the self-service portal.
  2. Make sure you’ve recorded all payments – Pay particular attention to any payments outside of normal payroll – such as commissions and bonuses.
  3. Update your leave schedules – This will be almost impossible without an automated system – which is why we recommend using one.

Once you’ve gone through these steps, you can begin your final payroll.

Sage Cloud HR and Payroll

Year-end payroll management (and the rest of the year, too) is much simpler when you use a cloud-based HR and payroll solution – and Sage has the best option on the market.

It supports your payroll management efforts with extensive automation and includes built-in compliance measures to keep your payroll management in alignment with South Africa’s legislation and regulations.

Click here to learn more about Sage Business Cloud Payroll.

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