“Too many people just see their payslip as confirmation that their salary has been paid and they can relax,” says Nicolette Nicholson, director at the South African Payroll Association (SAPA). “It is an extremely important document and it is worth checking it carefully to make sure it is accurate. Mistakes could cost you dearly in the end and you are responsible for making sure the payslip is accurate. Everybody should file all the payslips they ever receive and keep them forever.”
“A payslip is primarily the irrefutable record of a person’s work service for any employer. It provides factual proof of the jobs held and what was paid. It is also the receipt for work performed and should be carefully compared with the letter of appointment, contract or other official documents to ensure that a person’s work is being properly rewarded. Also, confirm that the correct employer name and address appears on the payslip.”
“Payslips typically have four main types of information: the fixed salary or contract of employment; the variable income for things such as overtime; the deductions area, which would include statutory and personal deductions; and the statistical area, which includes annual and sick leave, job description and so on. Job descriptions are often omitted to avoid potential conflict between employees but this is not good practice.
A particular point to notice is that personal deductions cannot exceed 25% of a person’s gross pay, and businesses have the responsibility of protecting their workers’ interests here. This means, for instance, that a company’s payroll department has the obligation to act on statutory deductions and, in the case of an emolument order, contact the attorney if the garnishee exceeds this ceiling and guide the employee to make arrangements to lower the repayment value on the court order.
However, the onus still falls on employees to check these deductions carefully.
“It is also critical to check that contributions to pension or provident funds, among others, have been properly made. If the incorrect deductions have been made, it will affect retirement income and payouts, as well as death benefits.
“Another important figure to check is tax and unemployment insurance deductions. The employee should also ensure that these deductions have actually been paid over to the taxman and Department of Labour respectively on the IRP5 certificate issued at the end of the tax year. These authorities will hold the employee liable, alongside the employer, if the right taxes are not paid.”
Payslips will also reflect how an individual’s pay is structured and it is prudent to make sure that this structuring is legal and harmonises with the job description. For example, travel benefits that are simply there to help reduce the tax liability are not advisable. Tax evasion, or actions aimed at not paying tax, is a very serious offence and carries jail time; while tax avoidance, which refers to using legal ways to reduce tax, is less serious, but can attract a fine of up to 200%.
“It is good practice to ask for a dummy payslip before accepting a job. This will enable a person to determine whether the deductions are fair and that take-home pay is at the expected level.
“If there’s something on your payslip you don’t understand or don’t agree with, take it up with your immediate boss, who will escalate to the payroll department. If you don’t get satisfactory answers, your union representative should be able to help,” concludes Nicholson.
