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Two things you must do to ensure you correctly account for monthly PAYE in your payroll

by , 10 October 2014
Your payroll system must include all the amounts you pay in PAYE, SDL and UIF for your employees.

If it doesn't reflect these amounts and SARS sees that, it might suspect foul play.

That's why you need to take care to ensure your payroll actually reflects this information.

Here's how to ensure it does...

 

Do these two things to ensure you don't make mistakes on your payroll 

 
1. Your payroll system is often different to your accounting programme. That's why you must correctly account for the figures from your payroll system in your accounting programme. This can help you avoid mistakes and ensure you correctly account for your expenses and liabilities. 
 
You should do this by performing a salary reconciliation using a salary control account. This ensures your payroll and accounting system match and you pick up any mistakes.
 
And since you must also pay your salary expenses and PAYE, SDL and UIF by the 7th of the next month, you should account for these expenses in your accounting programme.
 
But that's not all you must do to ensure you account for PAYE and other contributions in your payroll correctly.
 
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You must also do this final step to ensure your payroll is correct

 
2. Get someone to review your payroll to see if he can spot mistakes.
 
But you shouldn't let the person who does your payroll and accounting function do the reconciliation. He'll assume the information is correct and miss mistakes.
 
Since most small businesses can't afford to have different full-time employees just to do these jobs, consider asking your external tax consultant to review your monthly payroll. He'll look at the information with fresh eyes and ensure your payroll manager did it correctly.
 
Doing this will help you avoid payroll errors and ensure you account for PAYE correctly.
 
If you need more help managing your payroll, check out the Practical Accountancy Loose Leaf Service. It has all the tips and tricks you need to manage your payroll. 
 

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