#YourTaxMatters: Employer Filing Season

Rights and obligations of employers

According to law, an employer must register with the South African Revenue Service (SARS) within 21 business days after becoming an employer, unless none of its employees are liable for normal tax.

Registration by an employer includes registering with SARS for Pay-as-You-Earn (PAYE), and/or the Skills Development Levy (SDL), while also paying Unemployment Insurance Fund (UIF) contributions.

Where an employer is liable to pay SDL, they must register with SARS and indicate the jurisdiction of the specific Skills Education and Training Authority in South Africa (SETA) within which they need to be classified.

The Annual Reconciliation declaration is an integral part of an employer’s compliance status. The purpose of a reconciliation statement is to reduce your administrative burden as an employer. The PAYE Interim Reconciliation submission for the first six-month period takes place between September 1 and October 29.

During the Interim Reconciliation, employers are required to submit accurate reconciliation declarations for the six-month transaction period 1 March to 31 August, in respect of the Monthly Employer Declarations (EMP201) submitted, the payments made, the Employee Income Tax Certificates [IRP5/IT3(a)] and Employment Incentive Tax (ETI), if applicable. The Interim Reconciliation is intended to assist the employer to confirm that the information submitted is indeed correct.

The employer reconciliation process (interim and annual) must be done according to the ‘Business Requirement Specifications for PAYE Employer Reconciliation’ which is available on the SARS website www.sars.gov.za

Requirements by employers as per the Income Tax Act

• Deduct or withhold employees’ tax from remuneration.
• Pay the amount deducted or withheld to SARS monthly, on or before the 7th of the following month.
• Reconcile employees’ tax during the annual and interim reconciliation.
• Issue tax certificates (IRP5s/IT3(a)s) to employees.

Submission Channels

• Employers can request, complete and send the reconciliation declaration via:
  • eFilling
  • e@syfile
• Take note of the following on submission channels:
• eFiling – reconciliation submission via eFiling ensures a smooth employer reconciliation process to all registered small, medium and large business employers. Employers can either generate a tax certificate import file from the payroll system and import this file into eFiling, provided that the number of certificates is not more than 50, or complete the relevant tax certificates and return on the specified forms, and submit electronically to SARS.
• e@syFile Employer – employers generate a tax certificate import file from their payroll system, and import this file into e@syFile Employer. Within e@syFile Employer, employers capture additional manual certificates, cancel certificates, capture EMP501 details, and submit to SARS.

 Additional Benefits of using e@syFile Employer:

• Employers can finalise, submit, and pay monthly returns (EMP 201)
• Finalise and submit your interim and annual returns (EMP501)
• Register employees for Income Tax and obtain feedback

 Failure to meet your employer obligations may result in the following:

• Late payment penalties are levied at 10% of the liability due.
• Additional interest may be imposed upon failure to pay.
• If an employer wilfully and without just cause fails or neglects to withhold and pay PAYE to SARS, the employer may be found guilty of an offence and upon conviction, be subjected to a fine or imprisonment for a period not exceeding two years.
• Inconvenience for your employees who may be stopped for an audit when they submit their Personal Income Tax returns.

 Regional News

Free Tax Workshops: SARS would like to invite all interested parties to a series of free tax education sessions to be held at our Edenvale, Vereeniging and Krugersdorp branches on the following dates:

To reserve your seat, please RSVP via the following email addresses:

• Edenvale branch (47 Van Riebeeck Ave/Hendrik Potgieter str): EngagementAlberton@sars.gov.za
• Vereeniging (c/o Merriman & Joubert Str): EngagementSoweto@sars.gov.za
• Krugersdorp (40 Kobie Krige Street): EngagementWestrand@sars.gov.za