Are you ready for year end shutdown?

If not, book a FREE 30min consultation with us to discuss how we can assist with your year end Payroll.

We have answered some of the frequently asked question around the annual shutdown period.

An annual shutdown is a period during which the whole business, or part of the business, closes down temporarily and employees are not required to attend work.

This typically occurs during the Christmas and New Year holidays and/or Easter holidays.  It is the company’s choice to implement an annual shutdown, but this must be part of the company policies and must be communicated to the employees.

Yes.  The employer must pay the employees for the annual leave days taken during the shutdown period.  It can be paid with the normal salary payment.  The employer is only obliged to pay the employees for the number of annual leaves days due to the employee.

The employee is paid for the number of annual leave days that he/she has accrued at the start of the shutdown period.  E.g., the shutdown period requires 10 days (excluding public holidays) but the employee has only 8 days available to him/her.   The company has 2 options:

  1. The company will pay the employee 8 days at normal rate of pay and the remaining 2 days are unpaid, or
  2. The company will pay the employee 10 days at normal rate of pay and allow the employee’s annual leave days to run into a negative balance i.e. the employee will owe the company 2 annual leave days.  These 2 days will then be taken out off the employee’s new leave cycle.

NO.  This is legally not allowed.  The employer is only allowed to pay out annual leave on termination of the employment contract eg resignation, dismissal, retrenchment etc.

This is dependent on your employment contract and company policy.  If the employment contract states that the employee is entitled to or guaranteed a 13th cheque or annual bonus, then the company is required to pay out bonuses.  However, if the contract states that bonuses are discretionary (usually based on company performance) then the company is not obliged to pay out bonuses.  It is advised that companies address this with staff so as to manage employee expectations.

This is a choice by the company.  Both payments can be made together or they may be split and paid at different times.  If the latter is chosen, the employee should receive separate payslips per the separate payments.

YES.  The employer is legally required to withhold tax and UIF on bonuses paid out and these are calculated according to SARS tax tables.

YES.  Public holidays must be paid at normal rate of pay.  These include 16 December 2023, 25 December 2023, 26 December 2023 and 01 January 2024.

Do you need assitance with your year end shut down?

Mayday, Mayday it's Payday!

When things go wrong or there are unplanned disruptions to your payday, call on our Emergency Payroll Support.

The HRPT payroll team will run your payroll in a timely and efficiently, giving you time and support to recover from your challenges.

Whether you are seeking temporary relief for your staff or caught in a sudden crisis, we will provide the backup needed to get your staff paid.

Book a FREE 30min consultation with us to discuss your requirements.

We pride ourselves on offering cost-effective payroll and HR solutions, and on the enhanced levels of confidentiality, integrity and trust we bring to each project.

Each solution is tailor-made to meet the exact needs of your business. We begin by understanding what you do, the environment you operate in, and the challenges you face. Only then do we recommend flexible, cost-effective solutions that will make a real and sustainable difference to how you run your business.

Turn Financial Year-End Challenges into Triumphs!

Are you struggling to:

  • Meet all the HR compliance requirements?
  • Completed your payroll tasks?
  • Reviewed your employees and ensured that their employee files are up to date?
  • Have you checked all our policies and procedures
  • Reviewed your employee benefits and pay rates
  • Aligned to minimum wage effective 1/3
  • Set up performance reviews?
  • Done your HR planning for the next year and set you development budget?

Book a FREE 30min Consultation today!