Payroll refers to “compensation a business must pay to its employees for a set period and on a given date”. This includes managing employee records, performing payroll calculations and issuing of payslips.

Other payroll administrative tasks include managing monthly employee tax submissions (PAYE, UIF, tax certifications) and other annual reconciliations. As well as other statutory deductions and generating of compliance reports.

HR is the managing of all employee-related tasks, typical small business needs to meet are proper and relevant employment contract on record for each employee in your service, full-time employees should receive contracts and remuneration in line with the Basic Conditions of Employment Act.

HR also involves recruitment and performance management. Small businesses often don’t have a dedicated HR or recruitment manager, meaning it’s often an owner or manager who is responsible for hiring. An effective and efficient candidate sourcing process is therefore key to finding and hiring qualified people.

According to the Sage Productivity Tracker, South African companies lost R7.2 billion in economic value to admin in 2018 to administrative costs. Payroll and HR software can help to reduce these costs.

It’s now easier than ever for businesses to manage and automate HR administrative processes and analyse employee performance in a single integrated system. Additional benefits are it can be used to properly bill clients, create invoices and reports or allocate time and resources.

The technology is helping millions of business owners manage the significant changes to the workplace brought on by the COVID-19 pandemic such as the shift to remote working. A 2022 Sage survey of South African small and medium businesses shows that 82% of SMEs currently operate in fully remote or hybrid environments.

Other changes we have seen are the greater demand for flexible working hours and the rise of the gig economy which has seen more business owners outsource their talent needs.

Business owners now have the tools to implement a comprehensive workforce strategy to manage the complexities of a flexible workforce while remaining compliant with tax and labour laws.