The long awaited national minimum wage (NMW) has been signed into law.  The effective date is 1 January 2019. What exactly does this mean for employers and employees?

The new minimum wage of R20 per hour applies across all sectors, with a few exceptions.  The exceptions include domestic workers, farm/forestry workers and workers employed in Expanded Public Works Programmes.

The exceptions will only be temporary.  It is envisaged that there will be a gradual adjustment of domestic and farm/forestry workers’ wages to come in line with the NMW.  As a first step domestic workers’ minimum wages will be increased to a minimum rate of R15 per hour, and farm/forestry workers’ wages to a minimum rate of R18 per hour. The implementation dates of these increases have not yet been announced.

Some sectors will have to adjust their minima upwards with effect from 1 January 2019 – these include the Hospitality Sector, Wholesale and Retail Sector.

For employees who work 45 hours per week, the minimum monthly wage will be just short of R3900.  If the contract of employment makes provision for less than 45 hours per week, the monthly rate can be less than this amount.

Employers are restricted in the way that they structure the remuneration package.  The NMW excludes allowances that are paid to enable employees to work (such as transport and equipment), or payment in kind (such as board or accommodation), as well as bonuses, tips or food.

Employers are not permitted to unilaterally change working hours due to the implementation of the NMW. Any reduction of hours of work will have to be negotiated.

There is provision for employers to apply for exemption of up to a 10% reduction by means of an electronic system.  At the time of the announcement of the implementation date there was no information available on how to go about this in practice.

IF YOU CARE ABOUT YOUR FAMILY, YOU WOULD MAKE SURE THAT THEY HAVE WHAT THEY NEED

However, dying without a Will can leave your family with less than what they need.  By having a valid and updated Will, you are putting your family’s needs first.

Make an appointment with us to draft your basic Will during National Wills Week (11 to 15 September 2017)

South Africa operates a VAT system whereby businesses registered for VAT are allowed to deduct the VAT incurred on business expenses (the input tax) from the VAT collected on the sales made by the business (the output tax). The most important document in such a system is the tax invoice. Without a valid tax invoice a business cannot deduct input tax on business expenses.

In the past a tax invoice was only considered valid if it had the words “Tax Invoice’’ on it. However from 8 January 2016, section 20(4) of VAT act has been amended so that a valid tax invoice can now have the following words on it and still be a valid invoice to claim input VAT:

  • TAX invoice, or VAT invoice, or Invoice.

There are other criteria that must be met in order to qualify as a valid tax invoice. All the criteria below must be met for an unabridged tax invoice (an unabridged tax invoice is one where the total value of the invoice is equal to or exceeds R5000).

  • Contains the words “ Tax Invoice” , “VAT Invoice’’ or “Invoice’’
  • Name, address and VAT registration number of the supplier
  • Name, address and where the recipient is a vendor (customer), the recipient’s VAT registration number.
  • Serial number and date of issue of invoice
  • Accurate description of goods / or services (indicating where applicable that the goods are second hand goods)
  • Quantity or volume of goods or services supplied
  • Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax)

For an abridged tax invoice (an abridged tax invoice is one where the total value of the invoice is between R50 and R5000), all criteria above must be satisfied except for points 3 and 6.

TIP

Contact all your suppliers and make sure they have all your details on their database. It’s in your best interest to help suppliers with this, otherwise you might have a problem with SARS disallowing your input tax claims. Also make sure that when you have first contact with a new supplier that you give them written confirmation of all your company details and contact them later to confirm they have them and don’t need anything else. Check your invoices when you receive them against the above criteria for any errors and follow up with the suppliers if you spot something missing, because once they’re paid it’s easy to forget about checking them.

There is a checklist on the SARS website which gives a very good summary of the criteria for valid tax invoices. It would be advisable to keep it on hand so that you can tick the criteria off as you check your invoices. We have included it below.

BOOKKEEPING

Very often when you run your own business you end up doing a lot of things yourself and this can steal you away from your passion and purpose.

At BVDM PROFESSIONAL ACCOUNTANTS bookkeeping is music to our ears, we love what we do and use our talent for balancing books to your advantage.

Give us a call today and get back to fuelling the music of your soul by focusing on your real business passion!

Contact: 041-3956600 / info@bvdm.co.za

Payroll is one of those things that has to be done but doesn’t directly help you grow your business. On top of that you never know who is looking at things they are not supposed to or using information for self-leverage. So why not make things easier for yourself and ensure better confidentiality through outsourcing your payroll function. It will probably work out to be more cost-effective too!

Give us a call today on 041-3956600 or email us info@bvdm.co.za, you’ll be so happy you did.