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Payroll snags to watch out for over the festive season

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The festive season is nearly here. Here are a few tips that will help you to get ready for the last payroll of the year and the big holiday shutdown. By Sandra Swanepoel, MD of Sage HR & Payroll.

Be ready for any questions about bonuses
Sit down with the accountant or the business manager well before the December pay run to calculate year-end bonus payments. Whether you’re paying a bonus or not, communicate the news to your employees before payday so that they know what to expect. Be ready to answer any questions they might have.
You need to pay bonuses (be it the 13th cheques, performance bonuses, or profit sharing) in accordance with your contract with each employee and any relevant agreements with trade unions and bargaining councils. You might have to pay bonuses to employees who have not been with the company for the full year on pro-rata basis for the months they have worked.

Prepare for early processing of the payroll
Given that your offices may close for the festive season break and that many employees will be going on leave, it’s common to run the December payroll a few days earlier than you do in the other months.
Make sure you prepare in advance, and inform employees when they can expect to be paid. The information might be in their employment contracts, but it’s not a bad idea to send them a reminder.

Avoid leave pay headaches
With the end of the year in sight, companies need to do the complex calculations necessary to determine their employees’ correct leave pay.
There are many factors that affect the calculations, including overtime, commissions, allowances and other payments. Doing the sums manually or on spreadsheets is time-consuming and getting them wrong could mean breaching the Basic Conditions of Employment Act (BCEA). Here, automated software can save you time and hassle.
Also, check that you don’t have any employees who owe you leave or any who have built up a huge reserve of leave days. If there are, send them a letter reminding them of their leave debt or asking them to book some time off.

Be ready for January loan requests
As soon as you return to the office in January, you may be inundated by requests for advances and loans from employees. There’s a long gap between the early December payday and January salaries, and many employees urgently need cash for school fees and uniforms for their kids, living expenses and so on, to tide them over.
Whether you provide loans and advances or not, it’s a good idea to have a standard policy in place and to enforce it consistently. If you don’t have a policy as yet, draw one up, and communicate it to employees along with the January pay date. This will help them to plan their finances.

Leave applications. Ensure you have a solution that makes it easy
Many employees will want to take leave. Keeping track of who’s available and who is not can be a chore once you have more than a handful of employees. Why not use employee self-service (ESS) to let them apply for leave online from any Internet-connected computer or mobile device?
It makes life easier for them and for you. You’ll be able to sign off leave forms online and have electronic records at your fingertips. That will make it a smoother process to plan who will switch the lights on every morning and respond to urgent customer requests over the holidays.

Closing words
If you are using the right software for your payroll and human resources, you will be preparing for a stress-free December holiday knowing that your business is under control wherever you are. The right solution will make it a snap to, for example, calculate bonuses or put your entire workforce on leave over the December shutdown period.