REGISTERING FOR EMPLOYEES’ TAX [PAY-AS-YOU-EARN (PAYE)]
Registering as an Employer
Top Tip: The way you register for tax & customs and update your existing details has changed from 12 May 2014. For more information, click here.
According to law, an employer must apply for registration with the South African Revenue Service (SARS) within 21 days after becoming an employer, unless none of the employees are liable for normal tax. Application to register as an employer for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF) must be made on an EMP101e form – Payroll Taxes – Application for Registration.
Registering as a branch
Where an employer has, for registration purposes, applied for separate registration of branches of the enterprise, each branch is considered to be a separate employer. Application to register a branch separately from the main branch must be made on an EMP102e form – Payroll Taxes – Application for Branch Registration.
Change of registered details
An employer must inform SARS in writing within 21 days of any change in registered particulars (e.g. change of name, address or when he/she no longer operates as an employer, etc.).
An employer, who is required to register with SARS, for PAYE and/or SDL purposes, is also required to register with SARS for the payment of UIF contributions.
Registration for SDL purposes
Where an employer is liable to pay SDL, the employer must register with SARS and must indicate the jurisdiction of the Skills Education and Training Authority in South Africa (SETA) within which the employer must be classified. Although some employers are exempt from the payment of SDL, these employers are not all excused from registration.
The following employers are exempt from paying SDL—
- Any public service employer in the national or provincial sphere of Government. (These employers must budget for an amount equal to the levies payable for training and education of their employees);
- Any national or provincial public entity if 80% or more of its expenditure is paid directly or indirectly from funds voted by Parliament. (These employers must budget for an amount equal to the levies payable for training and education of their employees);
- Any public benefit organisation (PBO), exempt from the payment of Income Tax in terms of Section 10(1) (cN) of the Income Tax Act No.58 of 1962, which solely carries on certain welfare, humanitarian, health care, religion, belief or philosophy public benefit activities or solely provides funds to such a PBO and to whom a letter of exemption has been issued by the SARS Tax Exemption Unit (TEU);
- Any municipality in respect of which a certificate of exemption is issued by the Minister of Labour;
- Any employer whose total remuneration subject to SDL (leviable amount) paid/payable to all its employees over the next 12 month period will not exceed R500 000. If this is the reason for exemption, these types of employers are not required to register for the payment of SDL.
Registration for UIF contribution purposes
Where an employer is liable to pay UIF contribution, the employer must register with SARS or the UIF office (whichever is applicable) for the payment of the contributions.
The following employers, who are not exempt from contributing to the fund, must register with the UI Commissioner. An employer who—
- Is not required to register for Employees' Tax (PAYE) purposes at SARS
- Has not registered voluntarily as an employer for Employees' Tax (PAYE) purposes at SARS
- Is not liable for the payment of SDL.
An employer/employee is NOT REQUIRED to contribute in the following circumstances —
- Where an employee is employed by the employer for less than 24 hours a month
- Where the employee receives remuneration under contract of employment contemplated in Section 18(2) of the Skills Development Act
- Employees in the national and provincial spheres of Government who are officers or employees as defined in section 1(1) of the Public Service Act 1994, and their employers;
- Where that employee has entered the Republic for the purpose of carrying out a contract of service, apprenticeship or learnership within the Republic if, upon termination thereof, the employer is required by law or by the contract of service, apprenticeship or learnership (as the case may be) or by any other agreement or undertaking, to repatriate that person, or if that person is so required to leave the Republic;
- The President, Deputy President, a Minister, Deputy Minister, a member of the National Assembly, a permanent delegate to the National Council of Provinces, a Premier, a member of an Executive Council or a member of a provincial legislature; and
- Any member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders and a member of the Council of Traditional Leaders.
Top Tip: The Employment Tax Incentive encourages employers to employ young workers by providing a tax incentive to the employers. Read more.