What to do when employing staff for the first time
As your venture grows 🚀, you'll inevitably need to take on board some employees 👨💼. As a social entrepreneur or businessperson, this helps you scale up, delegate tasks and broaden the scope of your operations.
But what are the important things to get right when employing staff for the first time? 🤔
Let's look at the main responsibilities when becoming an employer.
Registering as an employer
If you employ anyone, you must register with the National Social Security (NSSA) within 30 days of becoming an employer and with ZIMRA, for tax purposes, including PAYE.
This will mean operating a payroll to pay your employees' wages and applies even if no tax or National Insurance liability actually arises.
✅ Once you're liable to register, all your employees must be processed through your payroll system, regardless of amount.
❌ It's a common misconception that casual or weekend staff can be paid 'cash in hand' without the payment going through payroll. That's not the case and all wages must go through the payroll system ✔️
✅ If you're operating a limited company, directors in the company are considered to be employees in much the same way as anyone else. So any salary paid to directors must also be processed through the payroll system.
✅ You will need to calculate and deduct PAYE tax from employees' wages and remitting PAYE tax to ZIMRA within 10 days after the end of the month.
✅ You should contribute for all employees whose earnings meet the NSSA insurable threshold and ensure timely payment of contributions.
✅ Where necessary (e.g. if they work with children or vulnerable adults) you should carry out a background check on any new employees. This checks their background and criminal record to make sure they are suitable candidates to work with vulnerable people.
✅ No later than the first day of work, you must provide each employee with a written statement of employment. This must include details of their role, rate of pay and pay interval, holiday entitlement and any probationary period. At the same time, they should be given details of notice periods, sick pay and other statutory paid leave.
✅ You'll have an ongoing need to maintain accurate records of employee data, payroll, and tax deductions. And you must submit annual returns (Form P4) to ZIMRA within 30 days after year end.
Managing your payroll and employee admin
Becoming an employer is good for the business but does add a whole new layer of employee admin work. There are plenty of associated administrative tasks to be taken care of and the penalties for getting it wrong can be severe and affects your cashflows 💸.
Several professional accountants can take care of payroll processing and the reporting to NSSA AND ZIMRA, to make sure you stay compliant with the regularly changing rules 📑.
If you want to run your payroll inhouse, you can as well engage the independent accountants about a 'health check' to ensure everything is in order ✅.
Get in touch with them! They are just a few clicks away.