EMPLOYEES’ TAX: PAY-AS-YOU-EARN (PAYE)

What is it?

Employees’ tax refers to the tax required to be deducted by an employer from an employee’s remuneration paid or payable. The process of deducting or withholding tax from remuneration as it is earned by an employee is commonly referred to as PAYE.
 
An employer who is registered or required to register with SARS for PAYE and/or Skills Development Levy (SDL) purposes, is also required to register with SARS for the payment of Unemployment Insurance Fund (UIF) contributions to SARS.
 
Top Tip: The 2014 Employer Annual Reconciliation closed 30 May 2014, click here for the latest information.

Who is it for?

The amounts deducted or withheld must be paid by the employer to SARS on a monthly basis, by completing the Monthly Employer Declaration (EMP201). The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL and/or UIF. A unique Payment reference number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.

How and when should it be paid?

PAYE must be paid within seven days after the end of the month during which the amount was deducted. If the last day for payment falls on a public holiday or weekend, the payment must be made on the last business day prior to the public holiday or weekend.
 
The following payment methods are available:
  • eFiling
  • Electronic payments through the internet (EFT)
  • At a branch of one of the relevant approved banking institutions (ABSA, FNB, Nedbank or Standard Bank). Cheque payments may not exceed R500 000. This limit applies irrespective of the number of tax periods being paid, or should multiple cheque payments be made.
  • At a specific SARS branch, cheque payments may not exceed R100 000. This limit applies irrespective of the number of tax periods being paid, or should multiple cheque payments be made.
Note:
Employers who pay, or are likely to pay Employees’ Tax exceeding R10 million in any
12-month period, must submit Employees’ Tax declarations and make payments electronically.
 
 
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 Top FAQs

What is a payment form?
The payment form serves as a source document that specifies which taxes must be/are being paid. A payment form may either be in the form of an assessment or

What is a payment reference number?
Each payment form is pre-populated with a unique payment reference number, or PRN, which is used to match the allocations on the payment form to the actual payment made.

How do employers make interest and penalty payments?
When paying interest and penalties relating to a specific EMP201, indicate this by completing the applicable fields on the EMP201. SARS will allocate the payment to interest and