Payroll Questionnaire

During the course of 2000 the Corporate Tax Centre launched a payroll questionnaire that gave rise to seminars devoted to its completion and coverage in audit firms' newsletters. As this questionnaire has only been sent to selected companies, a user has requested that I make a copy available for general information. Here it is.

To be completed and signed by your Financial Director

Where appropriate, circle the 'YES', 'NO', whichever is appropriate, following each question. Any details requested should be supplied in a separate schedule under the appropriate number. Circle the bold numbers following the items dealt with in your schedule.

Please ensure the accuracy of your answers, since this questionnaire may be followed by a field-audit conducted by the Corporate Tax Centre. The modern practice of SARS sometimes also includes interviews with a random selection of your employees.

Workforce

Approximately how many employees do you have in the RSA?...........
Approximately how many employees do you have outside the RSA?.........
Have any of your employees concluded more than one employment contract?
YES/NO
Do you split your workforce into major categories?
YES/NO
If so, please furnish a list of the major categories.
No. 5
Are any of your directors or other management employed by a separate management company?
YES/NO
If so, is the company concerned a 'labour broker'?
YES/NO
If so, does the company charge other companies in your group management fees?
YES/NO
If such management fees are paid, please furnish a brief description of the manner in which the amount of these fees is calculated and state whether payments are made monthly or annually and whether the VAT and RSC or JSB implications of such payments are properly recognized.
No. 9
Is the management company situated offshore?
YES/NO
If so, where?
No. 11

Payroll system
Do you have more than one payroll?
YES/NO
If so, please furnish a list of your payrolls, including any offshore payrolls.
No. 13
Is your board on a separate payroll?
YES/NO
Is your senior management on a separate payroll?
YES/NO
Are any employees on more than one payroll?
YES/NO
Do you use the services of a payroll-administration service-provider?
YES/NO
If so, please furnish the name of the service-provider.
No. 18
If not, do you have an in-house computerized payroll-system?
YES/NO
If you have such an in-house system, please furnish the name and supplier of the program used, the date it was last updated, the broad nature of the update and the name of any service-provider you use to support the program.
No. 20
Are all payments made to your employees processed through the payroll-system?
YES/NO
Does your payroll-system cater for the VAT implications of those fringe benefits giving rise to VAT implications?
YES/NO
Does your payroll-system cater for the RSC or JSB implications of the 'remuneration' you pay?
YES/NO
Does your payroll-system cater for any fringe-benefits tax involved in making loans to employees?
YES/NO
When last was your payroll system reviewed for its compliance with the provisions of the Income Tax Act?......................
Please furnish a copy of any report prepared as part of such review, including a report by an external/internal auditor or any other person.
No. 26
Please furnish a brief description of the types of non-taxed payments made to your employees that lead to the issue of IT 3(a) certificates.
No. 27
Are all such payments the subject of IT 3(a) certificates?
YES/NO
Do you use your payroll-system to reduce the PAYE deductions of employees belonging to retirement annuity funds?
YES/NO
If so, please furnish a brief description of the circumstances in which such deductions are made.
No. 30

Generation of tax certificates
At the end of their latest tax year, did all your employees requiring to be issued with IRP 5 certificates receive them?
YES/NO
Did you issue any IT 3(a) certificates to any employees or others?
YES/NO

Cashbook payments
Are any payments made to your employees via your cashbook or cash takings?
YES/NO
Are any payments made on behalf of any of your employees from your cashbook or cash takings?
YES/NO
Do you reimburse employees for expenditure incurred for the purposes of your business?
YES/NO
If so, are they required to support their claims for reimbursement with vouchers?
YES/NO
If so, are they required to present a claim-form?
YES/NO
If so, are they permitted to estimate or approximate any expenditure?
YES/NO
Are any of your employees required to travel overnight on business?
YES/NO
If so, do you pay all the costs of that travel directly?
YES/NO
If so, do you pay them a regular, daily allowance?
YES/NO
If so, do you pay them a monthly allowance?
YES/NO
Please supply a brief description of your policy governing employees' travel for the purpose of your business.
No. 43
Do you reimburse employees for the cost of entertainment for business purposes?
YES/NO
If so, are employees required to report on the persons entertained and the reason for the entertainment?
YES/NO
Do your branches or divisions have the authority to make any cash payments or payments by cheque to employees, whether to cover the cost of business expenditure or otherwise?
YES/NO
Are any overtime, leave or salary-adjustments payments made by way of cash or cheque?
YES/NO
If so, are these payments processed through your payroll-system?
YES/NO
Do you make loans to employees?
YES/NO

Contractors, labour brokers and incorporated individuals
Did you make any payments to any independent contractor, labour broker or privately owned company or close corporation for services rendered that were previously rendered by an employee of the company?
YES/NO

Salary-sacrifices
Does any element of your employees' remuneration-packages comprise salary-sacrifices (salary-substitutions)?
YES/NO
If you have a provident fund, is it non-contributory?
YES/NO
If you have a pension fund, is it non-contributory?
YES/NO
If you have a medical-aid scheme, is it non-contributory?
YES/NO
Do you have a deferred-compensation scheme?
YES/NO
Are employees able to purchase 'back-service' under any fund by way of salary-sacrifices?
YES/NO
Are employees able to make 'top-up' payments to any fund, scheme or medical aid by way of salary-sacrifices?
YES/NO
Do you have a group-accident or group-disability policy?
YES/NO
Are any of your employees able to contribute to the cost of life policies in their own names by way of salary-sacrifices?
YES/NO
Are your employees allowed to acquire assets (for example, computers) or services (for example, travel) by way of salary-sacrifices?
YES/NO

Restraints
In the current and the past five years, have you made any restraint payments to any of your employees?
YES/NO
If so, please furnish a brief description of the circumstances, the names of the employees involved, the amounts paid and state whether any of these amounts was claimed by you as a deduction for income tax purposes.
No. 62

Share-incentive schemes
Do your employees participate in any form of share-incentive scheme?
YES/NO
If so, please furnish a brief description of the type of scheme involved, for example, state whether it is a 'deferred-allotment' scheme, a 'convertible-debenture' scheme, a 'share-purchase' scheme or a 'share-option' scheme.
No. 64
If so, please state whether a directive is sought from SARS when employees derive a 'gain' under any such scheme.
YES/NO
If so, please state whether employees electing to defer the taxation of any 'gain' make their elections in writing addressed to SARS in the appropriate tax year.
YES/NO

Remuneration-packages
Do any of your employees receive a monthly or annual payment totalling R500 a year in consideration for 'occasional services'?
YES/NO
Does any part of your remuneration-structuring rely upon 'reimbursive' payments?
YES/NO
Does any part of your remuneration-structuring rely upon an allowance for overnight travel on business?
YES/NO
Does any part of your remuneration-structuring rely upon an allowance for foreign travel, whether for business or private purposes?
YES/NO
Are any of your employees able to 'invest' an annual or a special bonus in any type of retirement fund, scheme or benefit (for example, deferred compensation)?
YES/NO

Allowances
Do you pay any employees allowances of any kind?
YES/NO
If so, are all of these allowances processed through the payroll-system?
YES/NO
Do you pay entertainment allowances?
YES/NO
Do employees who are not required to entertain on behalf of the company receive entertainment allowances?
YES/NO
Is the requirement to entertain on behalf of the company written into employees' employment contracts?
YES/NO
Is the entertainment allowance granted on a salary-sacrifice basis?
YES/NO
Does the company reimburse entertainment expenditure laid out on behalf of the company?
YES/NO
If so, please furnish a brief description of your policy in awarding such allowances, identifying the class of employees involved, and disclosing the manner in which the allowances are calculated, any requirement in conditions of service relating to entertainment and whether employees receiving allowances (a) are also reimbursed for their actual expenditure on entertainment, and (b) actually do entertain for business reasons.
No. 79
Do you pay travelling and subsistence allowances to employees who travel on business?
YES/NO
Do you pay monthly travelling allowances?
YES/NO
Do employees receiving travelling allowances all have motor vehicles?
YES/NO
Do the employees receiving monthly travelling allowances actually travel on business (that is, excluding travel between home and business)?
YES/NO
Please furnish a brief description of the manner in which individual employees' travelling allowances are calculated.
No. 84
Are any of your employees provided with 'garage cards'?
YES/NO
If so, are they permitted to use these cards for expenditure unrelated to the vehicles they use for business purposes?
YES/NO
Do you have a formal system for checking variable travelling expenditure forming part of a travelling allowance?
YES/NO
Does the company reimburse any of the motor-vehicle travelling expenditure incurred by employees who also receive a motor-vehicle travelling allowance?
YES/NO
Do you directly pay the cost of insurance, tyres or major repair costs incurred on behalf of employees receiving travelling allowances?
YES/NO
Is the motor vehicle travelling expenditure reimbursed on a salary-sacrifice basis?
YES/NO
Do you pay 'reimbursive' travelling allowances on a per-kilometre basis?
YES/NO
Are such allowances paid to any one already receiving a monthly travelling allowance?
YES/NO
Do you pay cellphone allowances?
YES/NO
Do you pay 'home-office' allowances?
YES/NO
Do you pay computer allowances?
YES/NO
Do you pay uniform, 'dress' or grooming allowances?
YES/NO
Do you pay meal allowances?
YES/NO
Do you pay any other allowances?
YES/NO
If so, please furnish a brief description of these allowances.
No. 99
Are all allowances paid to employees subject to the deduction of PAYE?
YES/NO
If not, please furnish a list of the allowances from which no PAYE deduction is made.
No. 101

Travelling and subsistence allowances
Has any employee been paid a travelling and subsistence allowance on a salary-sacrifice basis?
YES/NO
Does the company pay a travelling and subsistence allowance as well as the full cost of company travel?
YES/NO

Company cars
Do you provide any of your employees with 'company cars'?
YES/NO

Cellphones and PCs
Has any expenditure incurred by employees on cellphones or PCs been reimbursed by the company?
YES/NO
Are employees allowed to purchase items, for example, a personal PC, on a salary-sacrifice basis?
YES/NO
Does the company reimburse cellphone call costs on a salary-sacrifice basis?
YES/NO

Air travel
Do any of your employees fly first class on international flights?
YES/NO
Do any of your employees fly first or business class on local flights?
YES/NO
Do any of your employees exchange air tickets for cash or additional airline tickets?
YES/NO
Do employees' spouses travel together with your employees on business trips?
YES/NO
Please supply a brief description of how you handle the holiday-portion of any business trip undertaken by any of your employees.
No. 112
Do you tax (IRP 5) or report (IT3(a)) any taxable benefits arising from your air-travel policy?
YES/NO
Did the company pay for any foreign trip on behalf of any employee on a salary-sacrifice basis?
YES/NO

Pension, provident, retirement and medical-aid funds
Do you have an updated copy of all your fund rules at your head office premises?
YES/NO
If any of these rules has been changed over the past twelve months, please furnish a brief description of the fund involved and the broad nature of the changes to the rules made.
No. 116
Does the company contribute the full medical aid subscription on behalf of any employee?
YES/NO
Does the medical aid fund pay for any non-medical expenditure, such as gym fees or sun-glasses?
YES/NO
Does the medical aid fund incorporate a savings scheme on behalf of individual employees?
YES/NO
Does the medical aid fund refund unused contributions?
YES/NO

Prizes, awards and gift vouchers
Do you award any of your employees with prizes, achievement-awards or gift vouchers?
YES/NO
If so, please furnish a brief description of the your policy in making such awards.
No. 122
If so, do you tax (IRP 5) or report (IT3(a)) all such awards?
YES/NO
Did any of your employees receive a prize, award or gift voucher on a salary-sacrifice basis?
YES/NO

Staff discounts and purchases, trading stock
Are any employees able to enjoy staff-discounts or make staff-purchases?
YES/NO
If so, please furnish a brief description of the terms under which such discounts are enjoyed or purchases made.
No. 126
Are any employees entitled to receive trading stock for no consideration or a consideration less than market value?
YES/NO
If so, please furnish a brief description of the circumstances under which such receipts are enjoyed.
No. 128

Meals
Do you have any canteens or dining rooms for employees in which meals are provided?
YES/NO
Do you provide meals during extended working hours?
YES/NO
Do you reimburse employees or pay employees allowances for meals?
YES/NO

Credit cards
Are any employees entitled to use company credit cards?
YES/NO
If so, please furnish a brief description of the terms under which these cards are used.
No. 133

Annual bonuses
Are employees allowed to elect how their annual bonus are to be used?
YES/NO
Is the annual bonus allowed to be used, say, to 'pay' for a holiday?
YES/NO
Can annual bonuses be written off against staff-loans?
YES/NO

Directors and senior management
Do your employees in these categories enjoy or derive any benefits (other than cash) not already mentioned?
YES/NO
Do any of these employees earn remuneration for services rendered outside of the RSA?
YES/NO

Other issues
May annual leave be applied against, for example, a loan?
YES/NO
Against any other expense, reward?
YES/NO
If yes, kindly provide examples.
No. 141
Do you have any insurance policies on the lives of any employees other than those policies already dealt with in this questionnaire?
YES/NO
If so, please furnish a brief description of the policy, the life or lives insured, the amount of cover and the purpose of the policy.
No. 143
Is there any aspect of your payroll-system or your remuneration-policy that worries you because it may not comply with the Income Tax Act?
YES/NO
If so, please furnish a brief description of the problem and any suggestion you may have for its resolution.
No. 145

FINANCIAL DIRECTOR:..............................

DATE:....................................

SIGNATURE:......................

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Payroll Questionnaire

Workforce

Payroll system

Generation of tax certificates

Cashbook payments

Contractors, labour brokers and incorporated individuals

Salary-sacrifices

Restraints

Share-incentive schemes

Remuneration-packages

Allowances

Travelling and subsistence allowances

Company cars

Cellphones and PCs

Air travel

Pension, provident, retirement and medical-aid funds

Prizes, awards and gift vouchers

Staff discounts and purchases, trading stock

Meals

Credit cards

Annual bonuses

Directors and senior management

Other issues