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.
- 1 April 2016 - Employer Annual Reconciliation
Employers are required to submit their Pay-As-You-Earn (PAYE) Employer Annual Reconciliations between 18 April and 31 May 2016 to SARS, confirming or correcting payroll tax amounts which were declared during the 2015/2016 tax period.
This year, employers are urged to accurately verify and update each employee’s personal and financial details before submitting their Annual Reconciliation Declaration (EMP501) and Employees Income Tax Certificates [IRP5/IT3(a)s] to SARS.
Should these details be incorrect on an IRP5 certificate, the employee will be unable to file his/her Income Tax Return for Individuals (ITR12) during Tax Season. Individuals will no longer be allowed to make any corrections to pre-populated IRP5 details on their returns.
In cases where details are incorrect, employees will have to revert to their respective employers who will need to make changes on the IRP5 and re-submit these to SARS. This process can be time consuming and it may become problematic for employees to file on time.
Employers play a very important part in the income tax cycle which effectively starts on 18 April with the submission of the annual reconciliations. We rely on your cooperation to make the submission of ITR12s later in the year as stress-free as possible for all involved. Need help? Call the SARS Contact Centre on 0800 00 7277.
- 20 January 2016 - The 2017 BRS for PAYE Employer reconciliation is published:
- 1 September 2015 - Employer Interim Reconciliation is open from 1 September to 30 October 2015 for the period 1 March to 31 August 2015
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, UIF and/or Employment Tax Incentive (ETI),
if applicable. 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?
It 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 before the public holiday or weekend.
The following payment methods are available:
- Electronic payments through the internet (EFT)
- At a branch of one of the relevant approved banking institutions. Cheque payments may not exceed R50 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 R50 000. This limit applies irrespective of the number of tax periods being paid, or should multiple cheque payments be made.
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.