The compliance burden on a small employer is disproportionate. Whether you employ four people or four hundred, you file a monthly EMP201, reconcile twice a year on EMP501, issue IRP5 certificates, declare to the UIF and calculate ETI. The volume differs. The obligations do not.
Which means a small employer needs real payroll software, and the temptation to run it in a spreadsheet is the most expensive shortcut available.
What per employee pricing actually costs you
At this size the pricing model matters more than the feature list.
- SimplePay at around R26 per employee per month excluding VAT, with no minimum. Eight employees costs about R208 a month excluding VAT.
- Payroll Online at around R19 per employee, with a five employee minimum. Eight employees costs about R152.
- Sage Business Cloud Payroll at around R30 per employee with a small minimum. Eight employees costs about R240.
- Sage Pastel Payroll is banded rather than per employee, so a small employer pays a band price whether they have four staff or fifteen. At this size it is usually the most expensive option.
Our recommendation
SimplePay. The per employee rate with no minimum is the fairest structure available, the statutory work is complete, and the support desk is local and competent. For a small employer without a payroll specialist on staff, that last point is worth more than the rand difference against a cheaper competitor.
Payroll Online is a legitimate cheaper alternative if your payroll is entirely salaried, you have no bargaining council exposure and you do not expect to grow past fifty staff. If any of those change you will be migrating, and mid year payroll migrations are unpleasant.
The things small employers most often get wrong
- Not registering for SDL when they cross the threshold. The levy applies where annual payroll exceeds five hundred thousand rand. Growing past it without registering creates a liability with interest.
- Missing ETI entirely. A small employer with three qualifying young employees is leaving real money with SARS every month. It is worth checking.
- Treating contractors as contractors when SARS would not. The independent contractor test is about control and integration, not about what the agreement says. Getting this wrong creates a PAYE liability for the employer.
- Leave balances in a spreadsheet. Every payroll here handles BCEA leave. Use it. The balance you argue about at termination is always the one nobody was tracking.
Setting up properly
Take a day. Load your employees with correct start dates, correct identity numbers and correct historical leave. Run one parallel month against your current process and reconcile them to the cent before you switch. It is the single highest value day of work available to a small employer, and almost nobody does it.