Know your Accounting Jargon
If you’ve never had to do accounting for your business before, it can seem like an overwhelming task at first. Even though QuickBooks programs will streamline your workflow and make things easier to grasp, using them still requires some knowledge.
Understanding your payslips, payroll, and other templates means knowing what information to include in them. This means that, in terms of ‘accounting words’, or jargon, there are three fundamental terms and forms to know so that you can be sure to do your books correctly.
Pay-As-You-Earn (PAYE) is an employee tax which is deducted from salaries or earnings. Each time you get paid, your employer subtracts an amount based on your tax bracket and pays it over to SARS. This is done because it’s much easier to pay small amounts every time you’re paid rather than a larger, annual lump sum.
In order to prove to SARS that these amounts have been paid, each employee receives what is known as an ‘IRP5 form’, which must be filled in to disclose the payments.
The Unemployment Insurance Fund (UIF), is an allotted amount that gets put aside to support employees who:
- Go on maternity leave
- Are wrongfully dismissed
- Are unable to work because of a medical condition
It also serves to compensate employees’ families, should they pass away unexpectedly.
These are employee payment declaration forms which need to be submitted to SARS by your employer. The EMP201 is submitted monthly and the EMP501 is an annual submission. The amounts that should be stipulated on each form are:
- UIF – Unemployment Insurance Fund
- PAYE – Pay As You Earn
- ETI – Employment Tax Incentive, only applicable to employers that are qualified for this benefit
- SDL – Skills Development Levy, only applicable if the employer is registered
With QuickBooks, employers simply need to submit the correct data and the program does all of the calculations for you. You can even submit your forms directly to SARS electronically via any of thesoftware packages, to make things even easier for you.
Learn accounting jargon as you go so that you can easily use QuickBooks for quick and efficient tax submissions.