Payroll guide
The questions to ask before switching payroll software
Move beyond the feature list and examine migration, statutory updates, employee records, support and the first live payroll run.
Payroll is the one system where a mistake is visible to every employee on the same day. Before you move, get straight answers to the questions that decide whether the first live run goes quietly.
Who keeps it legal when the rules change
Payroll software has one obligation above all others. When SARS changes a tax table, a UIF ceiling or a submission format, the software has to reflect that before your next run. Ask the provider directly how they handle it, and ask for an example from the last two years.
The answer distinguishes a payroll product from a general HR tool with a payroll module attached. A local provider whose whole business is South African payroll has no choice but to keep up. An international product with a payroll feature may not treat a South African change as urgent.
What actually has to move
Employee master data, year to date figures, leave balances and any loan or savings deductions all have to arrive intact. Year to date figures matter most, because they drive the tax calculation for the rest of the year and the certificates at the end of it.
Moving at the start of a tax year removes most of this problem, which is why March is the busiest month for payroll migrations in this country. If you must move mid year, confirm in writing that year to date balances can be imported rather than recaptured by hand.
Run it in parallel before you trust it
For at least one month, run the new payroll alongside the old one and compare every line for every employee. Not the totals, the lines. A difference of a few rand on one employee usually means a setting is wrong somewhere, and it will not stay a few rand.
This is unglamorous and it is the single most effective thing you can do. Most payroll disasters are not caused by the software. They are caused by a setup assumption nobody checked before the first live run.
Ask about the awkward parts of your payroll
Every payroll has something unusual. Commission structures, shift allowances, travel allowances with a company car, medical aid tax credits for a large family, garnishee orders, or contributions to a bargaining council fund.
Do not ask whether the product supports these in general. Ask the vendor to show you your own awkward case in a demonstration. A product that cannot demonstrate your commission structure will not learn to do it after you have paid.
Who answers when a run will not process
Payroll support is judged on one day of the month. Ask what the support hours are, whether they extend at month end, and how you reach a person rather than a ticket queue when a run has to go out this afternoon.
Ask also whether support is provided by the vendor or by a reseller, because the two experiences can be very different and the answer is often not obvious from the website.
Common questions
01When is the best time to change payroll software?
The start of the tax year in March, because year to date figures start from zero and the migration is far simpler. The second best time is the start of a month after a full parallel run.
02Should a small business use payroll software or a bureau?
Below roughly five employees a bureau is often cheaper and removes the compliance burden. Above that, software usually wins on cost and on control, particularly if your payroll changes every month with overtime or commission.
03What happens to my IRP5 certificates if I switch mid year?
They are produced from year to date figures, so those must be complete in whichever system generates them. Confirm before you move whether the new provider will produce certificates covering the full year or only the part you ran in their system.
Editorial note
This guide is general buying guidance and not accounting, legal or tax advice. Amounts and deadlines set by SARS change, so confirm the current figures for your own business before you rely on them.