Employment tax and benefits

Overview

An employer’s remuneration expense is often its largest cost, comprising wages and benefits, employment taxes and administrative expenses. It is also one of the most overlooked areas of potential tax risk. Large companies often rely on payroll administrators and software, sometimes overly so. There are two major risk areas many employers fail to consider, namely what benefits or elements of remuneration are not being processed through payroll, and whether the correct values for benefits are being processed through the payroll.

Our Employment Tax and Benefits specialists take a proactive and global approach to the often ‘neglected’ costs and on-costs associated with remunerating a workforce. We identify risks that employers may not have considered. Rather than over-analysing what already works, we focus on items miscategorised on payroll, or not going through payroll at all. This includes identifying weaknesses in controls, policies and procedures, and advising on and providing guidance to correct these.

Issues you may be facing

Do you know how much you pay in employment taxes and what element of this is controllable?
Do you want to take on ‘gig’ workers but aren’t sure of all your requirements as an employer?
Are you struggling to keep up to date with current or impending legislative change?
Is your organisation being impacted by minimum wage or pay discrimination reporting?
Are you using your payroll function to incorporate people analytics and reporting capabilities?

How we can help you

Employment tax
Employment risk
Employment cost reduction
Payroll consulting

Employment tax

We help you understand and comply with your employer taxation obligations, and to prepare for tax authority reviews. We help you validate your internal processes to control risks and costs and - if compliance failures occur - we work with you on remediation and can negotiate with tax authorities on your behalf.

Specific services include:

tax opinions on various remuneration items or employees’ tax consequences of various transactions,
individual and employees’ tax consequences of salary adjustments,
ongoing support to clients in respect of any matters relating to employees’ taxes, including assisting with SARS audits and responding to SARS queries.

Employment risk

We help you understand and mitigate current and emerging employment risks caused by legislation and regulation - including minimum wage, pay ratios and other pay fairness issues. We help you strengthen your risk management controls, policies and procedures. In a time where employment structures and contracts are changing and new ways of engaging workers are emerging, we can help you identify and protect against any associated risks. We help you analyse employee remuneration and reimbursement data to identify inadvertent error or fraud.

Specific services include assisting with employees’ tax due diligences, review of payroll processes and review of expense reimbursement data.

Employment cost reduction

We help you understand your total employment tax cost and identify the controllable elements. We help you restructure pay and benefits arrangements, such as salary sacrifice schemes, flexible working arrangements and cost-effective benefit schemes to reduce or contain employer costs. We help you develop policies and processes to support cost reduction strategies.

Payroll consulting

We can help you review the current design of your payroll delivery model and efficiency of your payroll function. We work with you to define the key requirements of improved payroll solutions and, where permitted, can help you create vendor selection criteria and advise on appropriate vendors that are right for your unique business. We can support you to review your risk and control infrastructure and advise on best practice governance of your payroll function. We also help you make the most of your payroll data and get your people analytics right.

Specific services include: optimising the efficiency of their payroll and administration functions, reviewing payroll coding and IRP5 certificates.