Starting a business is no easy task and keeping the company up to par with compliance obligations set out by government, may be on the back burner for some new business owners. However, South African laws require all companies to abide to certain registrations when employing employees and to be eligible for tenders. Failure to implement these compliances may result in hefty fines, and ultimately no recognition for any tender opportunities. Two of the most prominent being COID and PAYE.
Workman’s Compensation is a type of insurance, funded by The Compensation for Occupational Injuries and Diseases Act (also known as COIDA). Any company with one or more employees is legally obligated to register with COIDA.
This fund has been set in motion to protect not only employers, but employees as well should an unforeseen injury take place whilst on duty. The act ensures limited civil claims against employers and allows full time, and casual employees, to claim directly from the fund should they have the misfortune of sustaining an injury while on the job. In addition to it being a requirement by law, non-compliance with the Compensation Fund is the surest way to default tender opportunities.
Not registered for COID? Click HERE to get your COID Registration now!
Throughout the past year, Compensation Fund compliance has become the most sought-after compliance requirement for Tenders. It is mandatory for almost all businesses to have COID Registration and a Letter of Good Standing, to be considered for tenders. This is due to one simple reason – It protects the business and the tender itself against unexpected medical expenses for injuries or acquired diseases while employees are on duty.
As we start to rebuild the economy and pick up the pieces of the global lock down, the need for COID Registrations and a Letter of Good Standing has become more salient – by foreseeing the inevitable consequences of COIVD – 19, employers look at the future with caution, but may find surety in knowing they are covered for medical expenses through the fund.
Only in the most positive ways. No matter the size or validity of the corporation, tender opportunities will not be awarded to those who are not compliant with the Compensation Fund. Successful tender application requires a valid Letter of Good Standing as your proof of your contribution to the compensation fund.
Need to apply for a Tender? Click HERE to get your Letter of Good Standing now!
PAYE may be one of the most mandatory obligation set out to employers and employees alike. But may sometimes be hindered by the technicalities and calculations involved. Which may sound like a foreign language to many small start-up businesses.
PAYE stands for “Pay-As-You-Earn” and it acts as the gateway for SARS to collect Income Tax from your staff monthly. Employers are required to deduct employee taxes each month and pay it over to SARS. The Income Tax amount is calculated according to the employee’s annual income tax bracket.
To view the current Tax rates for individuals (employees) – click here.
Directors of the company may be held personally responsible should they wilfully exclude deductions such as PAYE from the employee. With PAYE inspections being carried out more frequently by SARS lately, it is paramount that employees ensure their compliance with SARS to avoid any legal action. Failure to do so may result in hefty fines or even 24 months imprisonment – the criminal record will reflect on both the director and the company.
In essence, PAYE protects the immediate business and all future business opportunities available to the director.
Have employees, but not registered for PAYE? Click HERE to get your PAYE Registration now!
1) COIDA compliance ensure the protection of the employee, for the near and far future. Should an employee sustain mild injuries on duty, the compensation fund will be there to foot the bill. The same will apply should an employee sustain a lifelong injury or occupationally acquired disease.
2) Although many contribute a small assessment fee, the economy is greatly affected by the small companies that are financially ruined due to huge medical expenses for injuries on duty. A small fee be it as it may, is the largest contributor to the fund – outlining the importance of every business owner’s responsibility to comply.
3) The growth of a company is every business owner goal and government tenders is one way to ensure your company’s growth. However, without a COID registration and in turn a valid Letter of Good Standing – the company will not be considered.
4) SARS requires it by Law – Falling behind with PAYE could result in your company being prosecuted by SARS and your personal financial status as a Director falling to the ground.