What’s New?
- 25 April 2024 – Employer Annual Reconciliation period
The submission period for Employers’ Annual Reconciliation Declaration (EMP501) is 1 April to 31 May 2024.
Importantly, these reconciliation declarations (EMP501) must include the latest and most accurate payroll information regarding their employees, and the tax they have deducted covering the full tax year from 1 March 2023 to 28 February 2024.
The employer’s annual reconciliation must be submitted by 31 May 2024, so that employee’s auto-assessments and tax returns can be prepared accurately.
For more information, watch the guidance videos below:
- 24 April 2024 – Employer Annual Declarations (EMP501): 1 April to 31 May 2024
One of SARS’s strategic objectives is to improve our service to deliver a seamless taxpayer experience that provides clarity and certainty to make it easier to meet your tax obligations. This letter guides you how to manage your pay-as-you-earn (PAYE) tax obligations during the annual declaration period.
Your tax compliance helps SARS to achieve its Higher Purpose, which is to enable the State to provide for the well-being of all South Africans.
Employees’ Tax Compliance Starts with You, the Employer
The Employer Annual Declaration period is open from 1 April and closes on 31 May 2024. During this period, Employers must submit their annual reconciliation declarations (EMP501) with accurate and up-to-date payroll information about their employees. Your EMP501 must include:
- Monthly Employer declarations (EMP201) for PAYE, Unemployment Insurance Fund contributions (UIF), and the Skills Development Levy.
- Information about payments made (excluding penalties and interest paid).
- Employee tax certificates (IRP5/IT3[a] generated) covering the tax year from 1 March 2023 to 29 February 2024.
How to Fulfil Your Obligations
Before submitting the 2024 EMP501, Employers must submit any outstanding monthly declarations (EMP201) . Please settle all payments due to avoid administrative penalties for non-compliance or late submission, and to reduce interest charges on delayed or outstanding amounts.
Employers, tax practitioners, and payroll administrators should download the most recent version of SARS e@syFile Employer, accessible through SARS eFiling at www.sarsefiling.co.za.
Employers must register employees who are not registered for Income Tax by using the single (“Individual ITREG”) or bundled (“Bundled ITREG”) IT Registration for existing tax numbers. New registrations can be processed on e@syFile Employer.
First-time job seekers must register for Income Tax via eFiling or on the SARS MobiApp for a seamless registration process.
Why Is It Important to File Accurately and on Time?
The employer-reconciliation process is a key phase in the Income Tax Filing Season. This enables SARS to issue individuals with an auto-assessed or pre-populated Income Tax Return (ITR12). Incomplete or incorrect information will make it difficult for employees to fulfil their tax obligations. Timely distribution of IRP5 and IT3 certificates by Employers is very important because employees require these certificates to file their ITR12s during tax season.
Non-compliance Penalties
Submitting an incomplete EMP501 or submitting and EMP501 after the due date will result in administrative penalties, amounting to 1% of the year’s PAYE liability. This penalty increases by 1% monthly, reaching up to 10% of the year’s PAYE liability.
What Constitutes a Criminal Offence?
It is a criminal offence for an Employer wilfully or negligently to
- Fail to submit full and complete EMP201 or EMP501 returns to SARS by the due date.
- Fail to issue an IRP5 or IT3(a) certificate to an employee within the specified periods.
- Fail to deduct or withhold PAYE or UIF, or not to pay any PAYE or UIF deducted or withheld over to SARS as required by law.
- Use or apply PAYE deducted or withheld for any purpose other than to pay that amount to SARS.
Any person found guilty of one of these offences is liable, on conviction, to a fine or imprisonment for up to two years.
Another of SARS’s Strategic Objectives is to make tax non-compliance hard and costly through, where necessary, hard enforcement (for example, court action, asset seizure, and criminal prosecution). Failure by an Employer to comply with its obligations does not only harm that Employer and the fiscus, but also employees. SARS vigorously pursues Employers that fail to comply.
It is crucial to submit the required documents and payments to SARS by the prescribed dates.
Channels to File Your EMP501
Employers with more than 50 employees:
- Must file an EMP501 using e@syFile Employer.
Employers with one to 50 employees can:
- File an EMP501 using SARS eFiling or e@syFile Employer.
- Create a tax certificate from their payroll and import the file on SARS eFiling.
- Change, cancel, or capture certificates on SARS eFiling if the number of certificates is less than 50.
Check the Status of Your Submission
To ensure that an EMP501 has been successfully filed with SARS, it is vital to monitor the status of submissions. As a result, if a submission is rejected because it is incomplete or has a data error, it is considered not to have been submitted, and you will be liable for non-compliance penalties.
Keep Employer Records
Please keep a register that contains the personal details and financial records of each employee as prescribed by the Commissioner and make them available for scrutiny by the Commissioner when required. The records must be kept for at least five years, following the submission of a tax return or other data to SARS.
More Information
For more information about completing manual certificates, please consult the e@syFile Employer User Guide or Step-by-Step Guide to the Employer Reconciliation Process.
Visit our YouTube channel, SARS TV (@sarstax), and watch the video, “How to submit an Employer Annual PAYE Reconciliation EMP501”.
Thank you to all the compliant Employers who submitted accurate reconciliations in previous declarations and made the required payments. Your contributions are critical to the nation’s economic growth and development.
- 7 March 2024 – PAYE Employer Reconciliation BRS for the 2025 tax year
The changes include:
- New source code (3926) for the Withdrawal from a Retirement Fund from the Savings Component/Pot
- Amendment of descriptions and/or validation rules for:
- Unclaimed benefits (source code 3909)
- Certificate Number (source code 3010)
- Directive Number (source code 3230)
- Directive Income Source Code (source code 3232)
- Transfer of Unclaimed Benefits (source code 3923)
- NED Directors / Audit Committee Member Fees (source code 3620/3670)
The submission dates:
- Interim: 16 September – 31 October 2024
- Annual: 1 April – 31 May 2025.
For the latest e@syFile release notes, see our e@syFile webpage.
See below for more on the PAYE timelines and the latest BRS.
Business Requirement Specifications (BRS) and timelines
Business Requirement Specification | Year Applicable | Submission dates* |
|---|---|---|
| 2025 Annual Employer Reconciliation (1 March 2024 – 28 February 2025) | Interim: 16 Sep – 31 Oct 2024 | |
| 2024 Annual Employer Reconciliation (1 March 2023 – 29 February 2024) | Interim: 18 Sep – 31 Oct 2023 | |
| BRS – PAYE Employer Reconciliation for 2022 / 2023 | 2023 Annual Employer Reconciliation (1 March 2022 – 28 February 2023) | Interim: 19 Sep – 31 Oct 2022 |
| BRS – PAYE Employer Reconciliation for 2021 / 2022 | 2022 Annual Employer Reconciliation (1 March 2021 – 28 February 2022) | Interim: 13 Sep – 31 Oct 2021 |
| BRS – PAYE Employer Reconciliation for 2020 /2021 | 2021 Annual Employer Reconciliation (1 March 2020 – 28 February 2021) | Interim: 14 Sep – 31 Oct 2020 Annual: 1 Apr – 31 May 2021 |
| BRS – PAYE Employer Reconciliation for 2019 / 2020 | 2020 Annual Employer Reconciliation (1 March 2019 – 28 February 2020) | Interim: 23 Sep – 31 Oct 2019 Annual: 15 Apr – 31 May 2020 |
| BRS – PAYE Employer Reconciliation for 2018 / 2019 | 2019 Annual Employer Reconciliation (1 March 2018 – 28 February 2019) | Interim: 17 Sep – 31 Oct 2018 Annual: 1 Apr – 31 May 2019 |
| BRS – PAYE Employer Reconciliation for 2017 / 2018 | 2018 Annual Employer Reconciliation (1 March 2017 – 28 February 2018) | Interim: 15 Sep – 31 Oct 2017 Annual: 1 Apr – 31 May 2018 |
| BRS – PAYE Employer Reconciliation for 2016 /2017 | 2017 Annual Employer Reconciliation (1 March 2016 – 28 February 2017) | Interim: 12 Sep – 31 Oct 2016 Annual: 1 Apr – 31 May 2017 |
* The final submission periods are subject to business requirements / readiness and calendar working day dates. Final confirmation will be communicated at the time of the relevant submission period.
What is 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. You can register once for all different tax types using the client information system.
Top Tip: The Employment Tax Incentive encourages employers to employ young workers by providing a tax incentive to the employers. Read more.
Who is it for?
How and when should it be paid?
- eFiling
- Electronic payments (EFT)
- Payments at a bank: All payments can be made at any ABSA, Capitec, FNB, Nedbank or Standard Bank branch.
- Manual forms of payments will no longer be accepted by SARS. Cheques posted / delivered to SARS will be returned to the client.
The responsibility of the employer in respect of a deceased employee
What obligation rests on the employer?
Paragraph 13(2)(b) of the Fourth Schedule to the Income Tax Act provides that an employer, who ceased to be an employer in relation to an employee, for example when an employee dies, is required to deliver an employees’ tax certificate within 14 days of the date on which employment ceased to the former employee (or to such deceased employee’s representative).
The employer must therefore deliver an employees’ tax certificate within 14 days after the employee passed away. The employer is required to provide the employees’ tax certificate to the executor acting as the representative taxpayer of the deceased employee.
The provisions of paragraph 14(5) of the Fourth Schedule that states the employees’ tax certificate shall not be delivered until the EMP501 reconciliation was submitted to SARS is not applicable to the circumstances envisaged under paragraph 13(2)(b). An employer must therefore, in the case of an employee’s death, provide the employees’ tax certificate even if the reconciliation is not yet submitted.
What obligation rests on the executor?
The executor, as the representative taxpayer, is responsible to finalise the financial and tax affairs of the deceased employee efficiently and without any unnecessary delays. The executor should therefore ensure that the necessary documentation, like the employees’ tax certificate is obtained from the deceased’s employer.
Note: The provisions of paragraph 13(2)(b) also apply in the case of an employee who retired or resigned. The employer must ensure that the employees’ tax certificate is provided to the employee within 14 days after resignation or retirement. If the employer fails to provide the employees’ tax certificates, the employee must request it from the employer.
