Employers are required to pay PRGF contributions at the rate of 4.5 % of the monthly remuneration of each worker. However, Small and Medium Enterprises (SME) will pay PRGF at a lower rate for the first three years, the difference being met by Government from a seed capital earmarked for that purpose. The PRGF rate, applicable on monthly remuneration, is based on the annual turnover of the SME.

On filing the PRGF monthly return, the employer is required to select the annual turnover in which it falls from the following list:

  Not more than Rs 2 million
  More than Rs 2 million but not more than Rs 10 million
  More than Rs 10 million but not more than Rs 50 million
  More than Rs 50 million

Visit the website of the MRA for more information.

Sicorax HRMS Payroll automatically updates the PRGF Contribution Rate to 4.5% for all companies. Before exporting the PRGF Returns from Sicorax HRMS Payroll, it is compulsory to update the below before performing payroll calculation of the month. After payroll calculation is performed, Sicorax HRMS Payroll will automatically calculate the PRGF contribution for the selected employees based on the Monthly Remuneration, where Monthly Remuneration as defined by the MRA is the monthly basic wage, payment for extra work performed and any productivity bonus and attendance bonus paid to a worker.

The following must be updated before performing payroll calculation:

 
 *  Company PRGF Rate (Small and Medium Enterprises (SME) ONLY)
 *  Employees PRGF Contribution flag 
 *  Payments & Deductions PRGF mapping

For Small and Medium Enterprises (SME), you must manually insert the Company PRGF Rate as per the below instructions.

Note: As per MRA requirement, after a specific number of years this special rate is not applicable. Therefore, you must manually set the company PRGF Rate to zero therefore, the normal PRGF Contribution Rate of 4.5% will automatically apply.

• Step 1: Go to Payroll/Settings/Parameters

• Step 2: Click Company Tab

• Step 3: Insert PRGF Contribution Rate % as per MRA requirement

• Step 3: Click Save

To auto-activate employee's PRGF Flag while creating new recruits, follow the steps below:

• Step 1: Go to Payroll/Settings/Parameters

• Step 2: Click Company Tab

• Step 3: Select Default PRGF (New Recruit) flag

• Step 4: Click Save

To update employees PRGF flag in bulk, use the steps below. (As per MRA's requirement, employees Pension scheme flag must also be updated).

• Employee PRGF Flag, if activated, indicates that the employer contributes to the PRGF for the employee

• Pension Scheme Flag, if activated, indicates retirement benefits of the employee are payable under the Statutory Bodies Pension Funds Act; or in accordance with a private pension scheme.

• Step 1: Go to HRMS/Settings

• Step 2: Click Client Data Import

• Step 1: Click Employee PRGF Flag

• Step 2: Choose Fill Excel with Company Data and Choose Company from the drop-down list

• Step 3: Click Download template button

• Step 4: Click Ok to open the Excel template

• Step 5:The above steps generate an Excel file which consists of a list of active and leavers of the month where the PRGF and Pension Scheme Flags of the employees must be updated.

• Save the Excel file to a location

• Step 6:On the Excel file, update columns PRGF Flag and Pension Scheme Flag for the respective employees

• Pension Scheme Flag with values Y (YES) or N (NO) - Where Y indicates that the retirement benefits of the employee are payable under the Statutory Bodies Pension Funds Act; or in accordance with a private pension scheme.

• PRGF Flag with values Y (YES) or N (NO) - where Y indicates that the employer contributes to the PRGF for the employee.

However, the PRGF contribution is applicable to all workers of the private sector, excluding:

• (i) A worker drawing a basic wage of more than Rs200,000 a month;
• (ii) A migrant worker or a non-citizen; and
• (iii) A worker whose retirement benefits are payable under the Statutory Bodies Pension Fund Act or in accordance with a private pension scheme

  To help you with the above flags, please find below some possible values:-

• A worker drawing a basic wage of more than Rs200,000 a month

Pension Scheme flag (Yes) PRGF flag (No) or Pension Scheme flag (No) PRGF flag (No)

• A migrant worker or a non-citizen

Pension Scheme flag (Yes) PRGF flag (No) or Pension Scheme flag (No) PRGF flag (No)

• Retirement benefits of the employee are payable under a Private pension scheme

Pension Scheme flag (Yes) PRGF flag (No)

• Retirement benefits of the employee are payable under the Statutory Bodies Pension Funds Act

Pension Scheme flag (Yes) PRGF flag (No)

• Retirement benefits of the employee are payable neither under Private pension scheme nor under Statutory Bodies Pension Funds Act

Pension Scheme flag (No) PRGF flag (Yes)

• After the Excel file is updated, Save and close the file

• Step 7: Choose the Excel File from it's location and Import

• To view the result of the import, go to Employee List as shown above.

To update employees PRGF flag and employees Pension scheme flag by employee, follow the steps below:

• Step 1: Go to Employee List, Activate PRGF Flag and Pension Flag (as per requirement)

• Step 2: Click Save

• Step 3: Click Next (to update PRGF flag and employees Pension scheme flag for the next employee)

To update the payments & deductions which are related to the PRGF, follow the below steps.

• For queries on PRGF payments & deductions grouping, please call the MRA

• Step 1: Payroll/Monthly Procedures

• Step 2: Click PRGF icon

• Step 3: Click PD Mapping Tab

• Step 4: E.g for the payroll item Salary, choose the PRGF value from the list

• Step 5: Click save

It is compulsory to repeat steps 4 to 5 for all payments & deductions which are related to the PRGF. You will find below additional illustrations for Commission and Allowances and Severance Allowance. Concerning Severance Allowance. (As per the MRA, this is the amount already paid to worker as severance allowance/compromise agreement excluding PRGF contributions under Sec 71(1) © of WRA)

After payroll calculation is performed, PRGF Contribution will appear as follows on the payroll detailed checklist