Employer Interim Reconciliation Declarations
Employers have until 31 October 2022 to submit their Interim Reconciliation Declaration (EMP501) to SARS using SARS eFiling or SARS e@syFile™. During this period, employers are required to reconcile their (PAYE, SDL, and UIF) declared on their monthly Employer Declarations (EMP201) for the first six months of a tax year (1 March 2022 to 31 August 2022). The tax values of the interim IRP5/IT3(a)s certificates generated, accurate payroll information, and employees’ tax (PAYE) payments made, should make up the Employer’s Reconciliation Declaration (EMP501) that should be submitted to SARS.
Employers with 50 or fewer employees can file a reconciliation that contains a maximum of 50 IRP5/IT3(a) certificates (tax certificates) electronically via eFiling. By logging into SARS eFiling and clicking on the “EMP501” work page, the employer will be able to complete the Tax Certificates and the EMP501 reconciliation, and the payroll system will generate a tax certificate file, which will then be imported into eFiling. Employers with more than 50 employees should use SARS e@syFileTM to submit the reconciliation and generate certificates.
Did you know that the employer of a deceased employee also has a tax obligation in respect of the deceased employee?
When an employee passes away, the employer is required to deliver an employee’s tax certificate within 14 days of the date on which employment ceased, to the deceased employee’s representative (executor). This is according to Paragraph 13(2)(b) of the Fourth Schedule to the Income Tax Act.
An employer must not wait for the employer reconciliation period to issue the deceased employee’s tax certificate regardless of whether or not the Employer Reconciliation (EMP501) has been submitted to SARS.
This will enable the executor, as the representative taxpayer, to manage the tax affairs of the deceased employee efficiently and without any delays
What’s New?
The PAYE BRS for Employer Reconciliation was updated on 27 October
The PAYE BRS for Employer Reconciliation version 21 2 is now published (previous version was 21 1). The new version:
- Relaxed the validations for email addresses. and
- Amended the description for the Fixed Rate Indicator.
Enhancements to the Tax Directive Process
On 10 October this year, SARS enhanced the Tax Directive Process by validating specific data captured on the tax directive application form against the information held by the Financial Sector Conduct Authority (FSCA). The changes will only impact the back-end processes of SARS. There will be no changes made to the IBIR-006 Tax Directives Interface Specification. The following data will be validated against the funds’ information as registered with the FSCA:
- The registered fund name
- Participating employer name, and
- FSCA registration numbers (participating employer number included) should be captured as it is on the FSCA data base.
Data captured on the tax directive application must correspond with the registration data with the FSCA. Incorrect data or omitted data will result in the tax directive applications being declined.
A new reason has been added on the IRP3a to cater for foreign companies that are not registered for Pay As You Earn (PAYE) to make severance payments to South African tax residents who have performed work within the Republic for the said company. When the employer pays the employee, the tax practitioner or SARS will select reason <Severance benefit – Paid by a non-resident Employer>. When the taxpayer/tax practitioner completes the return, a new field will be added on the ITR12 to cater for payments made by foreign entities.
Where funds and fund administrators experience spelling errors between information on the FSCA website that is not aligned with your FSCA registration letter, a request to correct the spelling error must be sent to the following contact person: Jodine Scholts at [email protected] at the FSCA. Please note that this email address is only for the correction of spelling errors of names.
All other issues relating to the FSCA, must be directly addressed with the FSCA via the existing channels available to the Funds and Fund Administrators.
Ensure that you are using the name exactly as it is listed on the FSCA website until the changes on the name have been effected to avoid a rejection of the directive application.
