[South Africa] 5 payroll trends for 2023 and beyond

There is a wide misconception that payroll is a slow-moving sector. But, on the contrary, in addition to being an industry with the flexibility to adapt to constant legislative, regulatory and social change, payroll is directly affected and shaped by advances in technology

Bizcommunity summarises five of the major trends that will shape South Africa’s payroll industry in 2023 and beyond.

1. A fluid workforce

The world of work has changed and hybrid work is here to stay, with many people working remotely all or some of the time. Many companies are sourcing remote talent nationwide or even worldwide. And many employers are embracing more flexible modes of work, such as using contractors and freelancers more extensively, or offering more flexible arrangements for people who want to work part-time.

Trends such as the four-day week promise even more change to come meaning payroll teams must adjust their processes to accommodate a wider range of working models.

2. Vision 2024

Every February, South Africa’s payroll teams wait to learn about upcoming PAYE changes for the new financial year in the Finance Minister’s Budget Speech. These changes typically involve only small tweaks to payroll calculations. However, beyond 2023, Bizcommunity says more significant changes can be expected as government and the South African Revenue Service (SARS) start to move ahead with long-delayed items on their agendas, including National Health Insurance.

SARS’ ambitious Vision 2024 reportedly envisages dispensing with filing season in favour of a more real-time approach to personal tax. Vision 2024 anticipates using third-party data from third-party returns to pre-populate an "assessment" for the individual through a SARS app where near real-time tax liabilities will be shown.

Employers may be expected to withhold employees' tax (PAYE) based on this data. For example, if an employee contributes to a personal retirement annuity policy or generates income from interest on a bank account, employers will reportedly be asked to adjust withholding tax appropriately. It is unclear how close this vision is to being realised but it is something payroll managers should already be keeping in mind.

3. Seamless workflows

It is increasingly likely that mid-sized companies will follow the example of large enterprises by adopting solutions that enable tight integration of finance, HR, employee self-service and payroll. This helps them to reduce costs and improve efficiencies by working off consistent data everywhere in the business and eliminating the need to capture the same data multiple times.

Organisations integrating HR and finance with payroll reportedly spend less and use fewer resources, improving the overall business performance of the company. In addition, they have accurate, real-time business information to support better decision-making. Integration between payroll and HR systems also enable self-service experiences that empower the workforce.

4. Data-driven decision-making

The majority of businesses want to use analytics to drive better decision-making and a company payroll is a potential goldmine of data. Data about absenteeism, overtime, employee attrition and retention, compensation, job costing and budgeting can yield powerful insights about employee well-being, engagement and satisfaction.

The data becomes even more powerful in a business with an integrated view of HR, payroll and finances. It can also, for example, paint a picture of organisational KPIs like productivity or revenue per head. Payroll teams will be seen to ramp up their use of analytics this year, going beyond basic reporting to partnering with other functions on strategic growth.

5. AI and robotic process automation (RPA)

It is still early days for the use of AI and RPA in payroll, however, some interesting use cases are beginning to emerge. Bizcommunity says it could envisage AI playing a role in data validation and anomaly detection, helping companies to further sharpen accuracy and more rapidly detect potential fraud or errors.

While RPA could help to streamline manual processes such as capturing data from scanned documents. An example of this is the “intelligent time” capture software that analyses previous timesheets as well as your calendar to prepopulate timesheets entries.

The cloud is the foundation for next-generation payroll

Some payroll teams are finding it challenging to keep ahead of admin at a time when employee and tax regulations are becoming more intricate. They also reportedly recognise that tough data privacy regulations mean they must be careful stewards of employee’s personal information. Plus there is a neverending pressure to become more efficient.

For that reason an increasing number of payroll departments using manual/on-premise systems are making a move to the cloud. A cloud-based system allows HR and payroll employees to work online and collaborate wherever they are; an essential asset in these times of remote and hybrid working models. It is also foundational for seamless workflows, data-driven decisions and AI adoption.

Source: Bizcommunity

(Link via original reporting)

There is a wide misconception that payroll is a slow-moving sector. But, on the contrary, in addition to being an industry with the flexibility to adapt to constant legislative, regulatory and social change, payroll is directly affected and shaped by advances in technology

Bizcommunity summarises five of the major trends that will shape South Africa’s payroll industry in 2023 and beyond.

1. A fluid workforce

The world of work has changed and hybrid work is here to stay, with many people working remotely all or some of the time. Many companies are sourcing remote talent nationwide or even worldwide. And many employers are embracing more flexible modes of work, such as using contractors and freelancers more extensively, or offering more flexible arrangements for people who want to work part-time.

Trends such as the four-day week promise even more change to come meaning payroll teams must adjust their processes to accommodate a wider range of working models.

2. Vision 2024

Every February, South Africa’s payroll teams wait to learn about upcoming PAYE changes for the new financial year in the Finance Minister’s Budget Speech. These changes typically involve only small tweaks to payroll calculations. However, beyond 2023, Bizcommunity says more significant changes can be expected as government and the South African Revenue Service (SARS) start to move ahead with long-delayed items on their agendas, including National Health Insurance.

SARS’ ambitious Vision 2024 reportedly envisages dispensing with filing season in favour of a more real-time approach to personal tax. Vision 2024 anticipates using third-party data from third-party returns to pre-populate an "assessment" for the individual through a SARS app where near real-time tax liabilities will be shown.

Employers may be expected to withhold employees' tax (PAYE) based on this data. For example, if an employee contributes to a personal retirement annuity policy or generates income from interest on a bank account, employers will reportedly be asked to adjust withholding tax appropriately. It is unclear how close this vision is to being realised but it is something payroll managers should already be keeping in mind.

3. Seamless workflows

It is increasingly likely that mid-sized companies will follow the example of large enterprises by adopting solutions that enable tight integration of finance, HR, employee self-service and payroll. This helps them to reduce costs and improve efficiencies by working off consistent data everywhere in the business and eliminating the need to capture the same data multiple times.

Organisations integrating HR and finance with payroll reportedly spend less and use fewer resources, improving the overall business performance of the company. In addition, they have accurate, real-time business information to support better decision-making. Integration between payroll and HR systems also enable self-service experiences that empower the workforce.

4. Data-driven decision-making

The majority of businesses want to use analytics to drive better decision-making and a company payroll is a potential goldmine of data. Data about absenteeism, overtime, employee attrition and retention, compensation, job costing and budgeting can yield powerful insights about employee well-being, engagement and satisfaction.

The data becomes even more powerful in a business with an integrated view of HR, payroll and finances. It can also, for example, paint a picture of organisational KPIs like productivity or revenue per head. Payroll teams will be seen to ramp up their use of analytics this year, going beyond basic reporting to partnering with other functions on strategic growth.

5. AI and robotic process automation (RPA)

It is still early days for the use of AI and RPA in payroll, however, some interesting use cases are beginning to emerge. Bizcommunity says it could envisage AI playing a role in data validation and anomaly detection, helping companies to further sharpen accuracy and more rapidly detect potential fraud or errors.

While RPA could help to streamline manual processes such as capturing data from scanned documents. An example of this is the “intelligent time” capture software that analyses previous timesheets as well as your calendar to prepopulate timesheets entries.

The cloud is the foundation for next-generation payroll

Some payroll teams are finding it challenging to keep ahead of admin at a time when employee and tax regulations are becoming more intricate. They also reportedly recognise that tough data privacy regulations mean they must be careful stewards of employee’s personal information. Plus there is a neverending pressure to become more efficient.

For that reason an increasing number of payroll departments using manual/on-premise systems are making a move to the cloud. A cloud-based system allows HR and payroll employees to work online and collaborate wherever they are; an essential asset in these times of remote and hybrid working models. It is also foundational for seamless workflows, data-driven decisions and AI adoption.

Source: Bizcommunity

(Link via original reporting)