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As a business owner, you know that payroll is an essential function for any business, large or small. And yet, it can be a complex and confusing process to run a successful company. From managing employee hours to calculating taxes and benefits, there’s a lot that goes into ensuring that your team gets paid on time and accurately.

To help you get a handle on your payroll obligations, we’ve compiled a list of burning questions about payroll, along with their answers. It is vital to understand the process. Keep reading to learn more about what a payroll services provider can do for you, how PTO impacts payroll processing, and more.

• What does a payroll services provider do? 

A payroll services provider is a company that specializes in managing employees’ paychecks within a business. This includes handling everything from calculating hours worked, deducting taxes and other mandatory subtractions, and issuing payments on behalf of the company. In addition, many payroll service providers also offer additional HR support, such as employee onboarding and time tracking. This frees up businesses to focus on their core functions while ensuring that their employees are paid on time and accurately.

• What are payroll deductions? 

Payroll deductions are amounts that are withheld from an employee’s paycheck before employees receive their pay for taxes, benefits, or other purposes. Common deductions include general Pay As You Earn (PAYE) taxes, Unemployment Insurance Fund (UIF), relevant monthly Medical premiums if applicable and pension plan contributions. The deducted amount is then paid by the employer to the appropriate entity on behalf of the employee.

• What are payroll taxes? 

Payroll taxes are levies imposed by the government on income earned by employees. Employers are responsible for deducting Pay As You Earn (PAYE) from their employee’s paychecks and remitting them to the appropriate authorities. Payroll taxes can be complex, so it’s always best to consult with a qualified account or tax advisor before processing this deduction. 

• How does taking PTO impact payroll processing? 

If an employee takes paid time off (PTO), their regular wages will still be subject to withholdings for taxes and other deductions. However, any PTO that is not used within the specified period will generally be forfeited back to the employer. As such, it’s important to keep track of employees’ PTO balances so that you can make the appropriate withholdings from their next paycheck. For example, if an employee is taking sick leave, they may be paid their full salary minus any deductions like taxes and healthcare premiums. Time off can impact both employer’s and the employee’s side of the payroll process.

Running a business comes with a lot of responsibility—including making sure that your employees get paid on time and accurately. By understanding the ins and outs of payroll, you can ensure that your company stays compliant with all laws and regulations. 

We are always here for you, so if there’s anything else on your mind about this topic or any other related matters, feel free to reach out to us here at Experity by email at info@experity.co.za for professional guidance. Take advantage of our knowledge and experience to ensure a smooth operation.