On the 8^th of August 2019, the EEA4 report layout has been changed as per Gazette 42627.  This new layout has been introduced in our 2020 Update 2b release.  Here is what you need to know:

1. There is now a New EEA4 Information Tab located on Setup, Company Parameters, Skills and Equity.  You need to:
   • Check the Tick Boxes that is applicable to your company
   • Select a key reason for the Income Differentials that apply to your company
   • Specify what transactions should form part of Fixed or Variable income (Unfortunately we will not be able to advise you on this, however, the Gazette gives a breakdown on page 6 and 7, if you are still unsure please reach out to your labour broker)
   • Our guide regarding this can be found here
     
     
2. The EEA4 report now consists of 7 pages:
   • Pages 1, 2, 4 and 7 are found under View, Skills and Equity, EEA4, Employer details
   • Pages 3, 5 and 6 are found under View, Skills and Equity, EEA4, Income differential Statement
     
     
3. The below message will display as soon as you select either the Employer Details or Income Differential Statement, this is not an error message, it is just a reminder to you to insure that you setup the details on Company Parameters, press OK on this message to continue:
   
4. Employee Inclusions:
   • Section C:
     • Temporary Employees
     • Foreign National Employees
     • Permanent Employees
   • Section D:
     • Foreign National Employees
     • Permanent Employees
       
       
5. Calculations:
   • Section C:
     • For any employee that has been employed for the full reporting period (October - September) the amount for their remuneration will be displayed based on the amounts that where entered for the Fixed+Variable incomes that you have processed for the individual
     • For employees that was only employed for a portion of the reporting period, their income will be annualized in a similar way to the PAYE calculation (annualize the Regular taxable income and add Irregular income onto this after the regular income has been annualized, see example below:
       Basic Salary YTD: R220 000
       Annual Bonus YTD: R10 000
       Periods Worked: 11
       Frequency: Monthly
       
       Calculation:
       R220 000/11*12= R240 000
       R240 000 + R10 000 = R250 000
       Total Remuneration: R250 000
       
       
   • Section D:
     • This section displays the highest remunerated employees in all Occupational Levels except the lowest Occupational Level and it also displays the lowest remunerated employees in the lowest Occupational Level. The report splits the employee’s remuneration between Fixed and Variable Remuneration.
     • Please note that the lowest occupational level can differ between companies. Example company A employees only Top Management, Senior Management and Professionals. Therefore, company A’s lowest occupational level will be Professionals. Company B employees Professionals and Semi-Skilled employees, therefore, company B’s lowest occupational level is semi-skilled.
     • For employees that have been employed for the full reporting year, it will display the Fixed and the Variable Remuneration as specified per transactions processed
     • If you have only been employed for part of a period the same annualization method as section C but does it separately for Fixed and Variable Remuneration. See example below:
       Calculation Fixed:
       Basic Salary YTD: R220 000 (Fixed and not ticked as Annual Equity Remuneration)
       Annual Bonus YTD: R10 000 (Fixed and ticked as Annual Equity Remuneration)
       Other Bonus YTD: R12 000 (Variable and ticked as Annual Equity Remuneration)
       Commission YTD: R30 000 (Variable and not ticked as Annual Equity Remuneration)
       Periods Worked: 11
       Frequency: Monthly
       
       Fixed Remuneration: R220 000/11*12= R240 000 R240 000 + R10 000 = R250 000 
       Variable: R30000/11*12 = R32 727.27 R32 727.27 + R12 000 = R44 727.27
       
       Total Fixed Remuneration: R250 000
       Total Variable Remuneration: R44 727
       Total Remuneration: R294 727 (Rounded to the nearest rand)
       
       
   • Section E:
     
     • This section displays the top 10% of the highest remunerated employees, the bottom 10% of the lowest remunerated employees, the employee who falls in the middle of the top and bottom 10%. It also displays the number of times (factor) the top earner earns more than the bottom earner. All other information for this section must be completed under Setup…Company Parameters…Skills & Equity…EEA4 Information. See example below:
       Total Remuneration of my employees:
       Employee 1: R1 000 000
       Employee 2: R600 000
       Employee 3: R400 000
       Employee 4: R200 000
       Employee 5: R50 000
       
       Top 10%:
       5 Employees *10% = 0.5 (Round up to the nearest round number)
       Top 10% is 1 employee, therefore Employee 1 is the top 10% with R1 000 000 as their remuneration.
       
       If the top 10% is for example 5 employees, you will add the total remuneration of all the employee and divide it by the number of employees (5) to get the average.
       
       Bottom 10%:
       5 Employees *10% = 0.5 (Round up to the nearest round number)
       Bottom 10% is 1 employee; therefore Employee 5 is the bottom 10% with R50 000 as their remuneration.
       If the bottom 10% is for example 5 employees, you will add the total remuneration of all the employees and divide it by the number of employees (5) to get the average.
       
       Median:
       The middle employee, if there is an odd number of employees it’s the employee in the middle.
       Employee 1: R1 000 000
       Employee 2: R600 000
       Employee 3: R400 000
       Employee 4: R200 000
       Employee 5: R50 000
       
       If there is an even number of employees, then you will calculate the average of the middle two employees:
       Employee 1: R1 000 000
       Employee 2: R750 000
       Employee 3: R600 000
       Employee 4: R400 000
       Employee 5: R200 000
       Employee 6: R50 000
       Calculation R600 000 + R400 000 = R1 000 000 R1 000 000/2 = R500 000
       
       Factor of how much the top earner earns more than the bottom earner:
       Employee 1: R1 000 000
       Employee 2: R600 000
       Employee 3: R400 000
       Employee 4: R200 000
       Employee 5: R50 000
       
       Calculation: R1 000 000/R50 000 = 20 Therefore, the factor is 20 times.