PUBLIC SERVICE STAFF RULE G.

I/II

PART II

PAYROLL OPERATIONAL GUIDELINES

1. PURPOSE

The purpose is to provide guidelines on the processing of payroll elements in

respect of remuneration, benefits, allowances and deductions to ensure
effective and efficient calculations for payroll runs.

2. ACRONYMS

The following acronyms are used throughout this part:

2.1 HRO : Human Resource Office

2.2 HRP : Human Resource Practitioner
2.3 PO : Payroll Office and/or Payroll Officer
2.4 Advice : Personnel Advice
2.5 PDMS : Payroll Deduction Management System
2.6 DCH : Deduction Code Holder
2.7 IFMS : Integrated Financial Management System
2.8 APS : Avril Payment Solutions
2.9 JEG : Job Evaluation and Grading
2.10 PSSR : Public Service Staff Rule
2.11 HOSSM : Home Owners Scheme for Staff Members
2.12 NamRA : Namibia Revenue Agency
2.13 GIPF : Government Institutions Pension Fund
2.14 PoB : Public Office-Bearer
2.15 OMA : Office/Ministry/Agency

3. PUBLIC SERVICE ORGANISATIONAL STRUCTURE

3.1 The organisation and establishment of OMAs and other financial

information form part of the IFMS. OMAs can only access their respective
payrolls.

3.2 Appropriate organisational structures are developed to execute the

mandate of the Public Service through the various OMAs. It consists of
various organisational components which comprise of different job
categories and its concomitant post designations with the aim to
achieve the mandate of the different OMAs.

3.3 A post refers to the level of a job within an OMA and it is usually shown
by the post designation, for example, an Administrative Officer Grade
12. A job refers to the specific tasks and duties to be performed for a
particular position. For example, an Administrative Officer may have
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 specific tasks of drafting correspondence, filing reports, and drafting
monthly reports. Another Administrative Officer, with the same post
designation, may have different tasks, such as preparing a distribution list
and arranging for the distribution of documents.

3.4 The organisational components of OMAs are not automatically loaded

on IFMS/Payroll. Currently, all job categories and post designations
applicable to each OMA are provided on the payroll. This forms part of
the Master Data.

3.5 The creation of a new job category or amendment to an existing one on

the payroll are dealt with under the Master Data.

4. GRADING AND PAY STRUCTURE

4.1 The Public Service grading and pay structures are linked and the grading
structure consists of a sequence of grades into which post designations
have been graded while the pay structure defines the monetary value
(salary scale and salary notches) attached to grades. It consists of 15
grades and is applicable to all staff members in the unified job
categories, teaching and related job categories as well as the three
uniform services.

4.2 The pay structure consists of a key scale, the scale of salary and salary
notches. The key scale is a list of all the salary notches from the minimum
to the maximum.

4.3 A scale of salary for each grade is developed from the key scale,
indicating the minimum to the maximum salary.

4.4 A salary notch is the annual basic salary granted to a staff member upon
appointment, transfer or promotion to a specific post designation.

4.5 The grading and pay structure are linked with other remunerative
aspects, e.g. a Grade 4 post designation would automatically qualify for
the management package as approved.

4.6 Representation of grading and pay structures on payroll

The implementation of the JEG introduced a new grading and salary

system. The result of the grading necessitated that differentiation on the
approved grades be made in terms of the scale of salary or type of job
category and individual staff members. This differentiation represents
itself on the payroll as described below with the acronym preceding the
grading itself. The grading remains the same result as per JEG and this
differentiation is only applicable to salary and/or benefits of the job
category/post designation concerned.

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 4.6.1 NG means it is a normal grading and is applicable to all job
categories including the uniform services, except teachers and
teaching-related job categories.
4.6.2 NTG means a normal grading applicable to all teaching and
related job categories.
4.6.3 PJG means personal-to-job category and is applicable to those job
categories indicated as such. The defined scales of salary for the
applicable grading are not applicable.
4.6.4 PHG means personal-to-holder and is applicable to an individual
staff member. The defined salary notches for the applicable scale
of salary are not applicable.

4.7 Other employment groups

Other employment groups include Public Office-Bearers, Judges and

Magistrates, Traditional Leaders, and ex-staff members and/or persons in
receipt of Employees’ Compensation. This category does not have
grading structures per se but a ranking system has been provided for use
on the payroll.

5. ASSIGNMENT OF ELIGIBILITIES IN TERMS OF THE PUBLIC SERVICE REWARD

MANAGEMENT POLICY

5.1 Remuneration consists of the total value of all payments in money or in

kind made or owing to the staff member arising from his/her
employment. Remuneration includes basic salary, service bonus,
remunerative allowances, overtime and service benefits. Each element
is payable separately according to its own set of rules.

5.2 The Public Service offers a Total Fixed Remuneration package, meaning
that each benefit is defined and payable separately. In line with the
master data rules, all these elements are linked to the grading and pay
structures e.g. a Grade 4 post designation would automatically qualify
for the management package as approved, or the danger and risk
allowance is applicable only to Fisheries Inspector, etc. Once again, POs
are only allowed to select the relevant element. Each element will be
described hereunder.

5.3 Basic salary

5.3.1 The salary notch of a staff member constitutes the basic salary and
is paid in equal instalments of 12 months. It is paid monthly in arrears
via the banking system. This allows the Ministry of Finance to pay
salaries by direct transfer to the bank or building society account of
each individual staff member.

5.3.2 The master data has been set up in such a way that the assigning
or picking of a grade will automatically generate the correct scale
of salary and the salary notches attached to it. However,

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 employees’ compensation has no salary scales on IFMS as such this
has to be entered manually.

5.4 Salary advance

A salary advance in terms of Treasury Instruction HC 06 can be granted

to a staff member depending on the actual working days he/she had
worked for that particular month. The emphasis of the advance is not a
loan and can only be granted in cases of death, and medical expenses
of the staff member and his /her immediate family members. Only the
Accounting Officer or his/her delegate can approve a salary advance.
The PO should make sure that the salary advance to be given does not
exceed the net salary for the specific month.

5.5 Service Bonus

5.5.1 A service bonus equal to the value of one month’s basic salary is
payable on the pay date of the birthday month of a staff member.
Master Data has been set up in terms of PSSR D.X and include
eligibility criteria and calculation methodologies for full and pro-
rata payment.

5.5.2 The service bonus is linked to salary and is therefore reducible when
a staff member or member of the services does not receive a salary.
5.6 Overtime

5.6.1 Overtime is the time worked in excess of the ordinary working hours
in an ordinary working day and does not include any work done on
a Sunday (if it’s not an ordinary working day for the staff member)
or a Public Holiday.

5.6.2 The Labour Act, 2007 (Act 11 of 2007) prescribes the calculation of
overtime. Although the calculation of overtime payment is the
function of the HRP, the final calculation is done by payroll
according to the formulae below. It must be noted that overwriting
of the overtime amount is not allowed even where it differs from the
calculation of the HRP.

(a) Overtime duty performed on a day (i.e. Monday to Friday) other

than a Sunday or public holiday: (Annual Basic Salary ÷ 2080) x 1.5
= hourly rate
(b) Overtime duty performed on a Sunday (or Public Holiday or during
night: (Annual Basic Salary ÷ 2080) x 2 = hourly rate
(c) Overtime duty performed during shifts:
Before 40 hours : (Annual remuneration ÷ 2080) x 6%
After 40 hours : (Annual remuneration ÷ 2080) x 2

5.7 Service Benefits

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 A number of service benefits are available to staff members on condition
that the criteria as contained in the respective PSSR for each are met.
These are as follows:

5.7.1 Housing:

There are four housing assistance benefits, each with its own PSSR.
These are as follows:

(a) Home Owners’ Scheme for Staff Members (HOSSM)

Staff members (excluding Managers) may purchase houses

according to the approved loan amounts under the HOSSM.
Participation in HOSSM is not applicable to staff members
employed on any type of contract in the Public Service. The
Master Data comprises of a combination of the salary notch,
post designation, etc.

(b) Housing allowance for staff members below management

This allowance is payable to staff members who do not receive

housing assistance under HOSSM, the Rent Allowance, the 100%
Public Service Housing Scheme or provided with free
accommodation (inclusive of water and electricity). Master
Data is set according to pre-determined salary ranges.

(c) Rent Allowance

A rent allowance is payable upon application subject to the

submission of proof of the rental obligation and no other housing
assistance has been granted. The Master Data is set at the
following formula:

20% of the actual rent of the staff member but not exceeding
25% of the monthly basic salary.

(d) Housing allowance for managers

This allowance forms part of the remuneration package of the

management to assist with housing obligations and is payable
per the various management post designations.

5.7.2 Transport Benefits

A transport allowance is payable to staff members below the

management cadre to assist with the cost of travelling from
residence to the place of work.

5.7.3 Motor Vehicle Allowance

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 (a) A Motor Vehicle Allowance is payable to assist staff members
and members of the services in the Management Cadre and
those who fall in the job category identified as personal-to-job
category and those who retained it on a personal-to-holder
basis to procure vehicles for use on official duty in order to
reduce the provision of Government vehicles to such staff
members.

(b) It consists of two parts, namely the capital cost of which 75% is
taxable and the running cost which is tax-free.

5.8 Remunerative Allowances

5.8.1 Remunerative allowances are determined and approved by the

Prime Minister on the recommendation of the Public Service
Commission and regulated and paid according to measures as
approved.

5.8.2 Remunerative allowances are reflected on the pay slip, except

those identified as compensatory for which receipts need to be
submitted before payment.

5.8.3 Remunerative allowances are income and therefore fully taxable.

5.8.4 In cases where a staff member qualifies for any allowance, the HRP
must issue an Advice on which the relevant allowance and period
are indicated. A complete code structure exists within the payroll
system to be used for the payment of allowances to staff members.
If no allowance code exists on the payroll system, salary offices
should request such a code from the payroll System Administrator
at the Ministry of Finance. The request should be supported by
relevant authorisation and details as approved by the Prime
Minister on the recommendation of the PSC as well as the proof that
the necessary account combinations also exist in the General
Ledger system.

6. DEDUCTIONS

Payroll allows two types of deductions, namely statutory and non-statutory.

Accounting Officers shall see to it that all statutory and non-statutory
deductions from salaries are paid to the ministries or organizations concerned
within the prescribed period or as soon as possible after the end of the month
in which the deductions were made. Before a deduction code can be
registered on the payroll system, it needs to be approved by the Accountant
General to ensure that a deduction code is not only registered in the payroll
system but also created in the general ledger (vote or suspense account
code).

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6.1 Statutory Deductions

6.1.1 Pay As You Earn (PAYE)

(a) Income Tax must be computed as determined by NamRA in

terms of the Income Tax Act, 1981 (Act 24 of 1981). A deduction
code for tax deduction is registered within the payroll system.
(b) Tax deductions are no longer (w.e.f. 01 January 2006 – PILOTS and
01 April 2006 – OTHERS) effected to the Receiver by means of a
cheque – the deductions are forwarded by means of electronic
transactions (automatic journals generated). Monthly
reconciliation is however still needed.
(c) It remains the responsibility of each OMA to submit the
completed monthly returns (PAYE4) to NamRA on or before the
20th of each month. Failure to remit tax and submit the relevant
PAYE4 return to NamRA is an offence in accordance with the
Income Tax Act, 1981 (Schedule 2) and penalties and interest
may be charged. The Ministry of Finance is not responsible for
such penalties.

(d) Reconciliation of PAYE by OMAs

(i) The “PAYE4 Remittance Advice” is generated by the system

and will be available after all pay-runs for a specific month
have been completed and before the next month-end run.
This particular report must be submitted in duplicate with the
“PAYE4” form to Ground Floor, Cash Office, NamRA and
telephone number 061 2092150.
(ii) The copy of the “PAYE4 Remittance Advice” must be
stamped by NamRA for acknowledgement of receipt and be
kept in the “Tax Reconciliation Register”. The report can be
printed from the Payroll System.
(iii) OMAs should implement a tax reconciliation register with
immediate effect. The following should be recorded in the
register:
Month
(aa) Total tax deducted (month end; appointment and
supplementary runs);
(ab) Total tax deducted per payroll register;
(ac) Amount of tax refunded to staff members;
(ad) Salaries reversed (salaries written back)’ and
(ae) Total amount payable to Receiver of Revenue.

(iv) Details of tax refunds or salary reversals should be recorded

in the tax register and should be recorded on a monthly basis
together with the name of the staff member, employee code
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 and the amount. This is necessary to verify that amounts are
deducted from the next payment to the Receiver of Revenue
and to enable OMAs to reconcile the tax suspense account.
If an electronic salary is reversed or a repayment is done, it
has an effect on the suspense accounts therefore, it is vital to
verify the reductions on the next payment to all institutions.
(e) The accounting entries for tax are as follows:
With the payroll deduction of tax at the time of each pay-run -

Dt – Vote
Cr – TAX Revenue Account

(f) NamRA does not refund OMAs.

6.1.2 Pension

(a) Membership:
A staff member qualifies to be a member of the Government
Institutions Pension Fund (GIPF) if he/she is permanently
employed as stipulated in Section 5 of the Public Service Act,
1995 (Act 13 of 1995). The membership fee is automatically
deducted as from the 1st day of employment.

(b) Contributions:

(i) An member of the GIPF contributes 7% of his/her basic salary

towards the Fund as an employee’s contribution. (Refer to
Pension Indicator as mentioned in “Employment Details”). A
deduction code for pension contributions is registered within
the payroll system. Monthly deductions are automatically
effected when the pension code indicator is defined upon
appointment. Reconciliation reports are generated monthly.
Public Office-Bearers (PoBs) contribute 10% of their basic
salary towards the Pension Fund for Public Office-Bearers at
the GIPF.
(ii) The OMA contributes 16% on behalf of the employer (GRN)
meaning, for every dollar that the member contributes the
employer contributes 16% or N$2.286 (16% divided by 7% =
N$2.286). Public Office-Bearers contribute 10% and the
Government 25% or N$2.5 for every dollar that a member
contributes.
(iii) It may happen that shortfalls are experienced in monthly
pension contributions. The responsibility vests with every OMA
to recover arrear pension contributions and promptly
facilitate the settlement of arrear contributions when staff

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 members return from unpaid maternity leave or other
instances.
(c) The employee and employer contributions are automatically
generated by the system. Both contributions must be paid over
to the pension fund on or before the deadline as prescribed by
the fund administrator. Late payments will result in interest being
charged for the specific OMA. The Ministry of Finance and Public
Enterprises facilitates the payment to GIPF on behalf of all OMAs.

(d) Pension contributions are calculated as follows:

(i) Staff Members

(aa) Employee portion: 7 420.50 x 7% = 519.44 (monthly
contribution)

(ab) Employer portion: 519.44 x 2.286 = 1 187.44 (monthly

contribution)

(ii) Political Office-bearers

(aa) Employee portion: 24 236.08 x 10% = 2 423.61 (monthly
contribution)

(ab) Employer portion: 2 423.61 x 2.5 = 6 059.03 (monthly

contribution)

(e) Reconciliation of GIPF overpayments by OMAs

Details of GIPF refunds or salary reversals should be recorded in

the GIPF register separately and the month, name of a staff
member, employee number, and amount should be recorded.
This is necessary to verify that the amounts are deducted from
the next payment to the GIPF.

(f) The accounting entries for GIPF deductions are as follows:

(i) With the payroll deduction of GIPF at the time of each pay
run -
Dt – Vote
Cr – GIPF Suspense Account

(ii) With payment to GIPF;

Dt – GIPF Suspense Account
Cr – Bills Payable

(g) GIPF does not refund OMAs.

(h) It is important the PO keep and update the following registers for
verification and reconciliation purposes:
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 (i) Tax Reconciliation Register;
(ii) All reverse electronic salaries Register;
(iii) GIPF Payments Register; and
(iv) All Refunds (Repayments).

6.1.3 Social Security

(a) Social Security deductions are compulsory and applicable to

permanent as well as temporary staff members.

(b) The contribution is computed as 0.09% of the basic salary.

However, if a staff member earns more than N$9000.00 a month,
the membership fee will not be more than N$81.00. The
employer’s contribution is computed for every N$1.00 the
employee contributes, thus the employer also contributes N$1.00.

(c) A deduction code for Social Security deduction is registered

within the computer system. Monthly deductions are
automatically effected, after which reconciliation reports are
generated. Both contributions must be paid over to the Social
Security Commission on or before the deadline as prescribed by
the fund Administrator.

6.2 Non-Statutory Deductions

6.2.1 Public Service Employees Medical Aid Scheme (PSEMAS)

(a) Membership to the PSEMAS is voluntary and staff members may

apply to become members. The HRO is responsible to inform the
PO by way of a copy of the Medical Aid application form.
(b) The membership fees are currently N$120.00 per month (standard
option) and N$240.00 per month (Higher option) per main
member. The membership per dependant is N$60.00 per month
(standard option) and N$120.00 per month (higher option) for
every dependant registered under the main member’s name. A
deduction code for Medical Aid deduction is registered on the
payroll system.
(c) The membership contributions are registered as non-taxable
revenue (administrative fees) under the Ministry of Finance and
Public Enterprises.
6.2.2 Court Orders

It must be noted that a deduction code needs to be granted to the

law firm. The application must be forwarded to the Accountant
General.
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 6.2.3 Rental of Government Houses

(a) The salary pay sheets in respect of deductions for the rental of
official accommodation should be provided to the Ministry of
Works and Transport (Department of Works) to be reconciled
against the list of allocations of Government houses to staff
members.

(b) A deduction for renting official accommodation is effected from

the salary of a staff member who resides in a Government owned
house. The tariffs are pre-determined by the Prime Minister on the
recommendation of the PSC from time to time as per existing
directives.

(c) It must be noted that these deductions have tax implications.

6.2.4 Trade Unions

The membership contributions to a recognised Trade Union is

deducted from the staff member’s salary.

6.2.5 Ministerial Revenue

These deductions are registered as non-taxable revenue

(administrative fees) under the relevant OMAs. The deduction
codes are registered on the payroll system.

6.2.6 Board and Lodging

These deductions are meant for staff members who are employed
by the Ministry of Health and reside in nurses’ homes that belong to
the said Ministry. These are fixed amounts that cater for boarding
fees.

6.2.7 Parking, Mess Fees, Social Club and Private Telephone

These deductions are effected from the salaries of staff members

who contribute or utilize certain facilities within OMAs. However,
Mess Fees are only applicable to the Namibian Defence and Police
Forces.

6.2.8 Housing

(a) Housing deductions are made in favour of private institutions.

Various deduction codes for housing are registered within the
payroll system. Monthly deductions are automatically effected
whereby reconciliation reports are generated. These payments
must be paid over to various institutions to recover monthly
instalments due by staff members. It must be noted that these
reports are available well in advance. POs must ensure that

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 these payments reach these institutions on time to avoid interest
being charged against staff members’ housing loans.

(b) The following types of housing deductions exists:

(i) Low Cost Housing (Build Together)

The Ministry of Urban and Rural Development grants low cost
housing loans to the lower income groups to build houses
through the Built Together Scheme. The deduction codes for
local authorities are registered on the payroll system. The
monthly deductions are effected where-after reconciliation
reports are generated. These payments must be paid over
to the various local authorities to recover monthly
instalments due by the staff members.

(ii) Housing Loans

Housing loan deductions are effected from the salaries of
staff members who participate in the Government housing
scheme and receive a monthly housing subsidy. Housing
deductions for managers have a tax implication that is
determined by the actual bond repayment or rent.

6.2.9 Ministerial Debt

A ministerial debt is monies owed to the Government by staff

members. All ministerial debt must be recovered from a staff
member’s salary in monthly instalments as a credit to Rejection
Suspense Account (see details of recovery of the amount due to
the State in the manual for accounts payable).

6.2.10 Salary overpayment

Salary overpayments are debts that resulted from overpayments

on salaries or allowances and have tax implications.

6.2.11 Salary Advance

The PO must make sure that the salary advance is deducted from
the staff member’s salary from the next ensuing payment of
salary (T.I H C 0602). This means, the advance must be recovered
at the end of the month in which the said advance was granted.
The remaining balance is payable to the staff member at the end
of the month.

6.2.12 Daily Subsistence and Travel Allowance (DSA)

The DSA deductions are effected from the staff member’s salary
to recover outstanding advances.

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 6.2.13 Leave without pay/suspension

These deductions are effected from staff member’s salary to

recover outstanding advances.

6.2.14 Fines

Fines are monies that resulted from penalties imposed e.g.

misconduct, military court cases etc. that must be deducted
from a staff member’s salary.

6.2.15 Stop Order

By virtue of the stop order system, a staff member may request

his/her Accounting Officer to deduct monthly amounts from
his/her salary. For this purpose, approval must be granted
beforehand by the Treasury and to the credit of specific
beneficiaries. The Accountant General may, upon consideration
of the conditions which Treasury laid down in this regard, grants
stop order facilities (deduction code).

6.3 Payroll Deduction Management System (PDMS)

6.3.1 Introduction

(a) The function of payroll is to calculate the individual staff

member’s salary or pay and to produce the relevant
documentation like pay slips. It is not the role of payroll to
manage the voluntary deductions or non-statutory deductions
of staff members. Voluntary deductions that are currently being
accommodated on the payroll are insurance (short term and
long term), micro lending and education facilitators.
(b) Over the years, the Government has allowed the deductions of
voluntary deductions from the payroll to assist and support staff
members. This allowed those staff members without bank
accounts to also share in the services and privileges of life and
other insurances, housing and other services. Staff members
have access to these services without the costs usually involved
with operating a bank account.
(c) The volume of these transactions has however increased over
time and some staff members are being put under considerable
financial stress due to these deductions.
(d) In an effort to help its staff members, the Government decided
to implement a service to support and manage these
deductions and to control the deductions being submitted to
the payroll. In 2002 a tender was awarded to Avril Payment
Solutions (Pty) Ltd (APS) to provide this control and
management service for the Government payroll (DPMS). APS
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 only provides the service and related computer system but APS
has no jurisdiction to decide on any of the rules that govern the
allowable deductions and affordability criteria that was set.
(e) The Ministry of Finance and Public Enterprises in conjunction with
other parties like NAMFISA and the Office of the Attorney
General, determine set of rules and regulations that govern this
service.

(f) The deduction code holders must:

(i) Attend to queries from staff members (provide client
services) and release the HRO and PO for more important
business. Through this process, it also releases the
Government of a significant burden to assist staff members
with enquiries that should have been handled by the
different deduction code holders.
(ii) Handle the support of queries related to deductions on the
Government payroll submitted via PDMS. For this purpose, a
contact list is available.

6.3.2 Role of Parties

(a) The Staff Member

(i) The staff member is required to complete an application

form and sign the relevant stop order. The insurance
company or lender will then check the affordability of the
deduction via PDMS. If the deduction is affordable
according to the rules and regulations as approved by the
Ministry of Finance and Public Enterprises, the service will
then be rendered.
(ii) If a staff member’s salary number changes, it is his/her
responsibility to notify all DCH, who has deductions on their
pay slips, of their new salary numbers. Failure to report a
change in a salary number may result in the staff member
not being able to claim benefits on an insurance policy as
non-payment may result in the termination of the policy
contract. Non-payment of loans may also result in legal
action being taken against a staff member.

(ii) The DCH cannot recover arrears via PDMS and staff members
must contact their DCH to pay arrears in cash or to make
alternative arrangements.

(b) Ministry of Finance and Public Enterprises

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 (i) The role of the Ministry is to monitor the PDMS, the DCHs, and
APS to make sure all transactions are done according to the
rules that were set up.
(ii) The Ministry may also, at its discretion, review and change
rules to ensure it is in the best interest of the staff members.
The Ministry considers requests for deduction facilities in
terms of the State Finance Act and Treasury Instructions and
is under obligation to grant deduction facilities to any
institution.
(iii) The Ministry has the power to temporarily or permanently
suspend or restrict a DCH when the DCH does not conduct
its business via the PDMS system in a responsible, legal and
fair manner to the staff members.
(c) Human Resource Office and Salary Office

(i) The Human Resource Office does not have to sign stop orders
anymore. The retention of the pay slips by staff members is
of utmost importance since all deductions are reflected on
the pay slips.

(ii) The Human Resource Practitioner and Salary Officer must be

able to explain the affordability rule and must direct the staff
member to the correct DCH.

(iii) The Human Resource and Salary Offices must make sure that
they have the latest contact lists of APS. APS will distribute
the lists at least every 6 months. An additional list can be
requested from APS and is also available electronically.

(iv) The Human Resource Office must provide information to

DCH on staff members who have resigned or whose services
have been terminated. This information must be provided to
the DCH when enquiries in this regard are received. The POs
must also assist the DCH with any information that may lead
to the tracing of “missing” staff members (missing staff
members refers to staff members who have disappeared
from the payroll.

(d) Deduction Code Holders and APS

(i) The Deduction Code Holders (DCH) are now in full control of
their deductions as authorized by the staff members. DCH
can via PDMS add, change and delete unauthorized
deductions and integrate it into their current systems to
improve their services to staff members.
(ii) DCH cannot access any sensitive data regarding a staff
member. Even an affordability check will only result in

15 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER

 acceptance or decline and will never reveal a salary, other
deductions or sensitive information.
(iii) Staff member’s privacy is respected and protected. No
private or salary information is revealed to deduction code
holders.
(iv) APS is tasked with the integrity and confidentiality of the
information. They are subject to the jurisdiction of the
Attorney General and must fully comply with all
requirements to privacy and data protection as
implemented in the Public Service.
(v) A high emphasis is placed on physical and virtual security.
DCH must provide services to their clients and must ensure
that they enable their clients to make informed financial
decisions for example: if a client wants to stop his or her
insurance policy, what are the consequences of such
decisions, etc.
(vi) It is the responsibility of the DCH, in this case the insurance
company or lender, to add the deduction via PDMS onto
the payroll. It is also the responsibility of the DCH to inform
the staff member, should the transaction not be affordable.
Alternative methods of payment may be considered by the
DCH, but it is the DCH’s company policy that becomes
applicable.
(vii) When deductions terminate, it is the responsibility of the DCH
to stop the deduction or to change the amount, whichever
the case may be. To stop a deduction should not take more
than one pay run.
6.3.3 Affordability Calculations

(a) The Ministry has implemented an affordability rule. The aim of

this rule is to manage the amount of deductions that will be
allowed by the PDMS. This does not mean that staff members
may not utilize their salaries for these types of services. It only
means that if a staff member wants to more deductions to be
made, he/she must arrange other arrangements like a bank
deduction or cash.
(b) The purpose of the affordability rule is to protect the staff
member against exploitation.
(c) The affordability rule requires that a staff member must take
home the bigger of N$750 or 35% of basic salary plus recurring
allowances.
(d) All voluntary deductions that existed on the payroll prior to May
2003 were included in the take-home data, irrespective of the
affordability rule.

16 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER

 For example:
Mr X wants to take out a life insurance policy. As part of his
application process the insurance company will check if the
deduction will be allowed by MOF. The amount of the new
insurance deduction is N$200. The affordability test is calculated
as follows:

Mr X earns a basic salary of N$3500 and receives a recurring rent

allowance of N$500. He/she has deductions including tax,
social security and others totalling N$2000.
From the total of N$4000, Mr X must take home 35% which is
equal to N$1400 (in this case N$1400 is bigger than N$750).

Basic Salary =N$3500

Plus Rent Allowance +N$500
Minus Current Deductions - N$2000
Minus Take home pay - N$1400
Available for new deductions =N$600
There is thus enough available to allow the N$200 deduction.

7. PAYMENT EXECUTION

7.1 The ultimate goal of payroll is to execute payments efficiently. In this

regard, all salary-related payments e.g. month-end (normal),
supplementary and A-run payments are done electronically. Payment
by cheque has been discontinued.

7.2 Electronic banking of Government salaries

7.2.1 Background

(a) The Ministry of Finance and Public Enterprises and FNB Namibia
have entered into an agreement for the development of an
electronic banking system for salary payments and since June
1998, the salaries of staff members have been paid into their
bank accounts by means of electronic transfers. Currently, Bank
of Namibia handles all EFT payments.
(b) The approved financial institutions (banks) are as follows:
(i) First National Bank
(ii) Bank Windhoek
(iii) Standard Bank
(iv) Nedbank
(v) Namibia Post

(c) The new system has done away with the paper schedules and
cheques that each month had to be distributed to the various
banks.
(d) Namibia Post is not part of the electronic banking system and a
transfer lists should be dealt with in the normal manner. An
17 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 electronic transfer is done to NAMPOST through a beneficiary
bank and a transfer list (proof of payment) should be forwarded
to Nampost at least 5 working days before pay date to allow for
the distribution of the funds to the staff member’s account by
payday.

(e) Deposit lists for the various banks are available from the payroll
system for information purposes.

7.2.2 Procedures

(a) Front and Load Report Rejections

(i) An upfront rejection refers to payment of staff member’s

salary rejected by the EFT system. In this case, the staff
member’s name will appear on the deposit list with an entry
e.g. banking institution unknown.
(ii) A load report rejection refers to information of the salary
system known as the unpaid list. This means, the file rejects
the entry due to due, for an example, an invalid account
number, branch code, unknown institution etc.
(iii) The upfront and load report rejection lists are made
available to OMAs prior to payday (before 15th of each
month).
(iv) Commercial banks will forward the total amount for the
rejections to the Ministry (Section Electronic Banking)
through the Bank of Namibia by the 15th of each month.
(v) A journal entry will be passed by the Ministry to credit the
various rejection accounts and a breakdown of the totals
will be forwarded to OMAs concerned. OMAs remain
responsible for the reconciliation of their suspense accounts
and therefore strict control should be exercised over
payments.
(vi) The concerned OMA is required to rectify the rejections
immediately on the payroll system with the correct banking
details of each individual to ensure that payments are
correct on the next salary run.

(b) Salary Recall

(i) Complete salary recall requests form and forward to the

Ministry of Finance and Public Enterprises (Electronic
Banking).

(ii) Salary recalls received after the cut-off dates will not be
accepted and will be returned to the Ministry concerned.
18 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 (Urgent applications after cut-off dates will only be
considered on receipt of proper motivation).

(iii) Under no circumstances may a salary recall request be

forwarded directly to banking institutions as this creates
problems and duplications.

(i) Process payment well in advance to ensure that each staff

member receives his/her salary on payday.

(c) Staff member’s responsibility

It is important that staff members in OMAs are informed of the in

following:

(i) Changes in bank account details should be reported to the

Human Resource and Salary Offices as soon as possible.
(ii) The staff member must always leave a forwarding account
number at the relevant bank when he/she closes or
changed his/her account.

(d) Salary not deposited into bank account due to closure/change

of account

The Salary Office must do the following:

(i) Determine the reason for non-payment (check upfront

rejection list, salary recalls etc.).
(ii) Confirm that the bank account is closed/changed and that
no payment has been made to the bank concerned.
(iii) Confirm if no deposits have been received into new bank
account.
(iv) Confirm that the bank has not put a “hold” on the account.
(v) OMAs are cautioned that double payments might occur.
Those responsible must be cautious before authorising the
payments.
(vi) Reconciliation of payments and amounts returned should
be done as soon as the lists the referred to above are
received. Overpayments must be re-covered immediately.
(vi) The payroll system must be rectified immediately with the
correct banking details.

(e) Helpdesk

A helpdesk has been set up at the Ministry of Finance and Public

Enterprises to assist OMAs with enquiries. An enquiry received
directly from a staff member will not receive attention. Staff
members are thus requested not to come to the Payroll
Helpdesk Offices to make personal enquiries. Such enquiries
must be directed to the Salary Offices of OMAs to respond to
such enquiries as soon as possible.
19 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
8. OTHER PAYROLL MATTERS

8.1 Last Pay Certificate

The purpose of a last pay certificate is to inform the receiving O/M/A of

the last date of payment of salary and all concomitant records. Copies
of deductions such as court orders, trade unions, social security and all
departmental debts must be attached. This certificate should be
forwarded to the Human Resource Office, which in turn should forward
it together with the staff member’s personnel file to the receiving OMA.

8.2 Re-instatements

8.2.1 The IFMS Payroll offers the facility to re-instate staff members whose
services were previously terminated.

8.2.2 This process is similar to a transfer (as they share the same screen),
but should not be confused. This process (after paperwork
formalities) will be initiated by the OMA from which the staff
member in question last worked. There is a flag that indicates if the
entry is reinstatement or not.

8.2.3 The OMA where the staff member was last employed, will capture
all details of where the staff member should be employed. All
expenditures will be accounted for at the new OMA to which the
staff member is assigned. Salary Offices must verify all allowances
and deductions of the staff member being re-instated, as all
details that were last paid and deducted are activated with this
process.

8.2.4 Arrear payments will be considered in the supplementary runs.

8.2.5 The payments relating to re-instatements are similar to new

appointments, and are considered in the “A-runs”.

8.3 Notification from HRO effecting changes

The PO receives an advice from the HRO to effect transfers, promotions.

These should be treated the same as in paragraph 9.3.

8.4 Pay sheet control

8.4.1 The Ministry of Finance and Public Enterprises provides pay sheets
in three parts to the OMAs to ensure on-time payments of salaries.
8.4.2 The Treasury Instruction HC 0402 stipulates that the following
certificate must be furnished by the person in charge, on all pay
sheets:
20 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 (a) The net amounts shown on the pay sheet were placed in the
relative envelopes and paid out by ………………………..
(b) The net amounts shown on this pay sheet, we paid out in the
presence of ……………………..
(c) I certify that the salaries of the above-mentioned persons have
been duly authorized ……………………………
(d) I certify that, unless otherwise indicated, the above-mentioned
persons were employed during the periods stated.”
(e) Please take note that this Treasury Instruction’s stipulation
implies that all staff members must sign next to their names on
the pay sheet irrespective of whether the staff members
receive their salary by way of salary cheque or bank deposit.
(f) The original pay sheets must be kept at the specific duty station
and the completed duplicate must be submitted to the Salary
Offices of the various line ministries.

8.5 Accounting entries for Register of Payment

8.5.1 Electronic Salaries

(a) Dt – Vote/Main Division with gross salary

(b) Cr – Deductions to the different suspense accounts, tax,
housing, GIPF, etc.
(c) Cr – PDMS for non-statutory payments
(d) Cr – Electronic Banking with net salary

8.5.2 Payments to Institutions for deductions effected

(a) Dt – Suspense Account e.g. Housing institutions

(b) Cr – Bills payable

8.5.3 Salary Reversals

(a) All payments issued on the Payroll System must be

reversed/written back on the system. Only payments for those
months that are closed on the Payroll can be reversed.
(b) If a salary is reversed, the next payment to the respective third
party institution will be reduced with the amounts that were
reversed. The reduced amounts should be the same as the
amounts that were previously debited or credited to such
accounts.

8.5.4 Write back of salary within the same financial year

Payment by electronic banking (salary):

21 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER

 (a) Dt - Rejection account with nett salary as paid into bank
account
(b) Dt - Deductions to respective Suspense accounts
(c) Dt - PDMS deductions to Rejection account
(d) Cr – Vote

8.5.5 Reversal after financial year ended:

Electronic salary:

(a) Dt - Rejection account

(b) Dt - All deductions to respective Suspense accounts
(c) Dt - PDMS deductions to Rejection accountant
(d) Cr - Miscellaneous account with gross salary

8.6 Register of payment – Payroll Cashbook Report

8.6.1 The register of payment reflects the basic salary payable to staff
members as well as the total of each allowance payment. The
total of the basic salary and the total of the allowances should be
equal to the gross salary for the specific month.
8.6.2 In the register of payment, all the various deductions are reflected
next to each deduction code. The gross salary less the deductions
is equal to the net salary.
8.6.3 For each deduction made from a salary payment, a detailed
reconciliation report is generated.
8.6.4 For each deduction, a specific suspense account code is created
within the OMA’s general ledger.
8.6.5 The register of payment (Payroll Control Pay Sheet Report) should
reflect a list per department and date of payment, in alphabetical
order, the information on that specific pay run -

(a) Name of staff member

(b) Employee code
(c) Pay point number
(d) Total gross salary with breakdown of salary and allowances
(e) Total deductions with breakdown of type of deductions and
amounts
(f) Nett salary payable
(g) Payment method (bank deposit)
(h) Total for the payroll report indicating gross salary,
deductions, nett salary, and total nett per payment method.

8.6.6 The Control Pay Sheet Summary should reflect the following
information:

(a) A breakdown per main division reflecting pay run

22 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 (b) Total payments
(c) Total deductions
(d) Total net pay

8.6.7 The Breakdown of salary per pay point/main division of each

department should reflect the following information;

(a) Main division

(b) Pay point
(c) Basic salary amount
(d) Vote allocation of each type of expenditure (salary and
allowances) with amount
(e) Vote allocation of each type of deduction with amount.
Note that all PDMS deductions are credited to the Salary
Interface Control Suspense Account.
(f) Total of nett pay per pay point/main division
(g) Total of deductions per pay point/main division

9. STAFF APPOINTMENTS AND MOVEMENTS

9.1 Introduction

9.1.1 Although these rules follow a specific format from appointment to

termination of service to the assignment of eligibilities, changes to
the personal position of a staff member (whether it is a transfer or a
change in conditions of employment (confirmation of probation) or
the granting of an acting allowance, can be done at any point.
9.1.2 The appointment or any changes to the personal position of a staff
member is dealt with in two ways (until such time that HR and Payroll
is integrated):
9.1.3 Updating the organisational staff establishment of the OMA if a
vacant post is filled;
9.1.4 Completion of the Personnel Advice (see below for details on this);
and
9.1.5 Submitting the above to the Payroll Unit for purposes of payment
and/or rectification.
9.1.6 This process is followed for the duration of a staff member’s tenure
from appointment to termination of service, including changes in
job category, rank, grading, service benefits and conditions of
employment.

9.2 Personnel Advice:

The HRO must verify whether the following information appears on the
advice:

9.2.1 Personal Details

(a) Correct name & surname

23 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 (b) Title (Mrs, Ms, Mr, Dr, etc.)
(c) Nationality (To determine whether staff member is a Namibian
citizen or a foreign national)
(d) Valid Namibian ID number
(e) Passport number (foreigners)
(f) Date of birth
(g) Gender
(h) Marital status
(i) Number of dependants
(j) Employee ode
(k) Tax number
(l) Mode of payment
(m) Electronic Fund Transfer for which the following details is
required:
(i) Name of Bank,
(ii) Name of Branch,
(iii) Branch Code,
(iv) Account number
(v) Type of account

9.2.2 Employment Details

(a) Job category (Public Office-Bearers, Judges, management

cadre and other staff members)
(b) Rank, grade, scale of salary and salary notch
(c) Date of appointment
(d) Employment classification (Permanent, Temporary, Contract,
etc.)
(e) Incremental date
(f) Bonus indicator
(g) Pay Point and Section
(h) Pension indicator and group
(i) Pension admittance date

9.3 Salary register a prerequisite for all appointments in the Public Service

9.3.1 The HRO in OMAs must keep a salary register where all Personnel
Advices relating to an appointment is entered in numerical order.
Pages of the salary register must be kept in strict alphabetical order.

9.3.2 The supervisor shall ensure that the particulars contained in the
Personnel Advice are correctly entered in the salary register, and
shall sign and date the advice. He or she shall also certify him/herself
that the calculations that have been made are correct.

24 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER

9.4 Appointment

Once a Personnel Advice has been received for a new appointment, it

is the responsibility of the PO to capture the details of the advice under
the appointment function on payroll.

9.5 Transfer

9.5.1 Once a Personnel Advice has been received for a transfer it is the
responsibility of the PO to capture the details of the advice under
the transfer function on payroll.

9.5.2 For an internal transfer, the PO should transfer the staff member
electronically (through the system) to the new organisational unit.
All static data for the staff member remains intact and are
“transferred” ensemble to the receiving OMA.

9.5.3 The correct rank, scale of salary, salary notch, pay point as well as
any benefits must be ensured.

9.5.4 For an external transfer, the PO should transfer the staff member
electronically (through the system) to the new OMA. The current
OMA will capture all details of where the staff member should be
employed. The necessary information must be availed by the
receiving OMA. All static data for the employee remains intact and
are “transferred” ensemble to the receiving OMA.

(In fact, only the ministerial details change and/or the salary details
change but the static transactions remain in the static transactions
table. These can then be viewed at the new OMA immediately
after the transfer is completed)

9.6 Promotion

9.6.1 Once a Personnel Advice has been received for a promotion, it is

the responsibility of the PO to capture the details of the advice
under the promotion function on the payroll.
9.6.2 The PO is to effect changes as per advice, such as the correct rank,
scale of salary, salary notch and date of promotion as well as pay
point (where a change occurs).
9.7 Exemption
9.7.1 An exemption on the payroll means that a staff member`s
remuneration and benefits are stopped while they are absent from
their duty station but their services have not been terminated. This
could be on authorised or unauthorised leave. These will be
continued at a future date when the staff member assumes duty.
An exemption can also be imposed on an employee who`s services

25 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER

 are terminated, but they are yet to be paid their last terminal
benefits.

9.7.2 When an exemption is imposed on a staff member, no

remuneration and benefits are paid to such staff member until the
exemption is lifted by the Payroll Helpdesk and MOF.

9.7.3 Exemptions on the payroll happens during periods when an

employee is authorised to be absent from his/her duty station
without remuneration including maternity leave and
accompanying spouses on foreign missions. Services that are
terminated and awaiting termination benefits include resignation,
retirement, dismissal or death.

9.8 General

9.8.1 Arrear payments will be considered in the supplementary runs.

9.8.2 Transfers payments in respect of salaries for transferred employees
are considered in the next Normal (month-end) run and is
immediately on the payroll of the receiving OMA/Department.
9.8.3 Important: The Employee Code remains the same throughout the
entire employment of a staff member in the public service.
9.8.4 During transfers, Staff members must not be exempted by the
transferring department OMA/Department as the exemption will
also apply in the receiving OMA/Department which results in no
salary being generated in the receiving OMA/Department.

9.9 Termination of service

9.9.1 Termination of service takes various forms such as resignation,

retirement, restructuring, death, dismissal and secondment. Each
reason for termination of service have its own set of procedures and
rules.
9.9.2 Once a Personnel Advice has been received for a Termination of
Service it is the responsibility of the PO to capture the details of the
advice under the Service Termination function on payroll.
9.9.3 The service termination function is the final transaction, as the
master file for a staff member will be deactivated on the system.
The following requires to be done:

(a) Salary

(i) If the termination date is at the end of the current month, the
staff member is entitled to the full salary.
(ii) The PO must ensure that the salary master files are terminated
on time to avoid overpayments. If the salary master file was
not terminated on time, the PO must determine the
overpayment and recover it from the leave gratuity. If the
26 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 service termination (stop salary) advice is received well in
advance, the staff member can be exempted from the next
pay run to avoid overpayments.
(iii) If the termination date is before the end of the month, the
salary must be recalled from the financial institution and
reversed on the system.
(iv)All additional payments e.g. overtime, difference in salary,
service bonus, severance allowance etc. must first be paid
before the service is terminated. Payment of pro-rata salary
should also be made before service is terminated.

(b) Leave Gratuity

(i) The HRO determines the number of leave days payable to

the staff member. The PO must verify that the information on
the leave gratuity advice i.e., basic salary and allowances
correspond with the information on the salary master file. If
not, it must be updated where necessary on the system.
Leave gratuity calculation must be verified and payment be
effected.
(ii) In cases where the leave gratuity days are not received in
time, the staff member must also be exempted from the
payroll until all information is received and final payments are
done and once the information is received, the OMA`s must
ask for the Pay flag to be removed by the Payroll helpdesk.
This can only be done by the Payroll Helpdesk.
(iii) Where the leave gratuity amount is higher than N$10,000.00
a tax directive must be obtained from NamRA as stipulated
in the Income Tax Act of 1981.
(iv)Note to be taken that the tax directive request should only
include the leave gratuity payment. Tax on pro-rata bonus will
be automatically calculated by the system, which will take
rejection deductions specified, into consideration.

(c) Recovery of ministerial debt

(i) The leave gratuity payable on termination of services should

be used as a set-off against any Ministerial debt, which a staff
member may have, unless such debt can be recovered by
other means, e.g. outstanding salary and allowances.
(ii) In cases where the staff member’s services terminate as a
result of death, any departmental debt must be claimed
from the deceased’s estate and not from the leave gratuity.
(iii) It is the responsibility of PO to determine if there are any
outstanding debts on salary advance, DSA advance,
collateral guarantee (personnel office to advice), house
27 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER
 rent, W&E (if house was rent), and other amounts due to
Government (rejections and revenues) to be deducted from
the leave gratuity amount.
(d) Additional government debts (rejections and revenue) can
be deducted from the above-mentioned payments.

28 PSSR G.I/II – PAYROLL OPERATIONAL GUIDELINES – OFFICE OF THE PRIME MINISTER