Pay As You Earn

What’s New? 

• Employer Annual Reconciliation Period Deadline: 31 May 2025!

  The submission period of the Employer Annual Reconciliation Declaration (EMP501) is now open until 31 May 2025.

  All reconciliation declarations must include the most up-to-date and accurate employee payroll information, as well as the tax deducted for the full tax year, from 1 March 2024 to 28 February 2025.

  Importantly, the employer’s annual reconciliation must be submitted by 31 May 2025 to ensure that employees’ tax assessments and pre-populated tax returns are prepared accurately.

  The submission of correct and accurate employee information by employers on time contributes to the economic growth of our country.

  For more information, employers can watch instructional videos on “How to submit EMP501 declarations” on our Step-by-step videos webpage.

• 28 March 2025 – Starts soon! Employer Annual Declarations (EMP501): 1 April to 31 May 2025
  Dear Employers, 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. One of SARS’s strategic objectives is to improve our service to deliver a seamless taxpayer experience that provides clarity and certainty. This letter guides you on how to fulfil your tax obligations during the Employer Annual Declaration period.

  See what is new this year, how to submit, more about penalties and more, click here.

• 17 February 2025 – Upgraded e@syFileTM Employer – Version 8.0 with effect 1 March 2025
  SARS has launched e@syFile™ Employer – version 8.0. The platform has been redesigned to enhance your filing experience. Version 8.0 will replace all previous versions of the software, effective 1 March 2025. Please download version 8.0 timeously to familiarise yourself with the new features. See the enhancements, system requirements and more detail here.

• 16 September 2024 – The Employer Interim reconciliation opens 16 September 2024 to 31 October 2024 for the 2025 Employer Filing Season

  The following enhancements have been implemented for the interim PAYE Filing Season:

  • A new source code has been added to the IRP5/IT3(a) certificate:
    • Source code 3926 was added relating to the savings withdrawal benefit. Specifically, a withdrawal from a Retirement Fund’s Savings Component/Pot.
  • Two source codes have been removed on the IRP5/IT3(a) certificate:
    • Source code 2039 was removed (“Employer Contact Person Fax Number”)
    • Source code 3137 was removed (“Employee Fax Number”)
  • Enhancements have been made to the financial fields on the IRP5 certificate: A warning message will be displayed if all digits of a financial field are the same e.g. 4444.00
  • Updates to the employer statement of account:
    • The employer statement of account has been enhanced to display the status of payroll taxes.
    • The statement will now include Employment Tax Incentive (ETI) account balance.
  • Enhancements to the EMP501 Reconciliation process:
    • Directive validation module has been enhanced to allow for validation of multiple source codes for one directive number.
    • The employer will be prevented from requesting EMP501 reconciliation prior to the Interim Filing season start date, e.g. the employer requests an interim EMP501 reconciliation on 20 August 2024 before the start date, which is 16 September 2024. The request will be rejected.
    • The employer will also be prevented from submitting the saved interim EMP501 reconciliation on eFiling if the final EMP501 reconciliation has been submitted already.
    • Notification will be issued where an IT3(a) certificate with Income Tax reference number is submitted, and PAYE should have been deducted.
  • Enhancements to employer deregistration process:
    • Where amendments were made to the EMP501 reconciliation which is in the Excessive Liability Change (ELC) process, deregistration of payroll taxes will not automatically be re-instated.
    • The coding date of de-registration will always be set to a date later than the processed date of the last return. This date will not be considered if the Revised Declaration is submitted
  • Enhancements to ETI account: ETI refund and forfeit process has been enhanced.

  The e@syFile™ Employer application has been upgraded and the new e@syFile offers improved performance and includes the following features:

  • Easier navigation and data capture experience has been prioritised with a new look-and-feel and arrangement functions and workflows.
  • Full installations with every software update.
  • Quick links to related functionality has been introduced to remove the need to continuously navigate through multiple menu items
  • Enhanced user maintenance functionality to add and remove users and restrict functionality

  Employers can update the old e@syFile™ while still installing the new version, rather than uninstalling the old version. Both the old and new versions can operate on the same PC. For the bi-annual submission, either the old or the new version of e@syFile™ Employer can be used to submit the reconciliation. However, for the annual filing season, only submissions via the new version of e@syFile™ Employer will be accepted.

  For more information, see the Frequently Asked Questions on the e@syFile webpage.

  The following guides were updated:

  • IT-easyFile-G01 – Third Party Appointment AA88 e@syFile™TC Employer Guide – External Guide
  • PAYE-easyFileG01 – e@syfile™TC Employer Guide – External Guide
  • EMP-GEN-02-G01 – A Guide to the Employer Reconciliation Process – External Guide
  • PAYE-AE-06-G06 – Guide for Codes Applicable to Employees Tax Certificates 2025 – External Guide
  • PAYE-AE-06-G07 – Guide for Validation Rules Applicable to Reconciliation Declarations 2025 – External Guide
  • PAYE-AE-06-G08 – Guide for Completion and Submission of Employees Tax Certificates 2025 – External Guide
  • PAYE-GEN-01-G19 – Guide for Employers iro Employees Tax for 2025 – External Guide
  • GEN-VDP-02-G01 – Voluntary Disclosure Programme – External Guide
• 13 September 2024 – Employers’ Interim Reconciliation Is Part of Filing Season:

  The Employer Interim Reconciliation submission period runs from 16 September to 31 October 2024. Employers, in both the private and public sectors, must reconcile their declarations for the first six months of the reconciliation year (1 March 2024 to 31 August 2024) and submit their Employer Reconciliation Declaration (EMP501) via eFiling or e@syFile™ Employer. 

For employers to submit their reconciliation correctly, their declaration must include:

• • Monthly Employer Declarations (EMP201) submitted with the tax values (PAYE, UIF, SDL) matching the interim IRP5/IT3(a) certificates generated;
  • Payments made (excluding penalties and interest paid); and
  • Accurate payroll information and tax certificates (IRP5/IT3[a]) generated for the period 1 March 2024 to 31 August 2024.

Reconciliation Made Easier

• • Step 1: Employers, tax practitioners and payroll administrators, must download the latest e@syFile™ Employer version from sarsefiling.co.za.
  • Step 2: Import the electronic Employee Tax Certificates (IRP5/IT3[a]) CSV files from their current payroll system.
  • Step 3: Capture all additional IRP5/IT3(a)s manually. Note e@syFile™ Employer will use the information from all the tax certificates to calculate the certificate totals for the EMP501 automatically.
  • Step 4: Enter their monthly liabilities, payments and Employment Tax Incentive (ETI) information (if applicable). Note e@syFile™ Employer will calculate the rest. e@syFile employers have the option to use prepopulated data or work offline without prepopulated data. Employers who declare ETI must use the “Accept SARS Data” option to ensure that ETI is prepopulated on the EMP501. ETI values may not be captured or increased on the EMP501.
  • Step 5: Make sure that their details are correct and up to date.
  • Step 6: Submit Reconciliation, view EMP501 Dashboard and view PAYE Dashboard to ensure reconciling processed successfully.  For large reconciliation allow a couple of minutes for process.

Submission Channels

• • Employers with 50 or less employees can use either SARS eFiling or e@syFile™ Employer. If the employer has 50 or less IRP5/IT3(a) certificates, a tax-certificate file can be generated from the payroll system and this file can be imported into SARS eFiling.
  • Employers that file EMP501s for more than 50 employees must use e@syFile™ Employer.
  • An exception is made for employers with a maximum of five IRP5/IT3(a) The employer can visit the nearest SARS branch, and an agent will help to capture these IRP5/IT3(a)s and the EMP501. Remember to book an appointment before visiting a SARS branch.

Note: SARS is in the process of moving to a new e@syFile platform. Therefore, for this submission period, both the e@syFile platforms will be available, and for the 02 submissions (2025 onwards) only the new e@syFile should be used.

For more information, go to the new Frequently Asked Questions on the e@syFile webpage.

Accuracy and Timely Filing Are Critical

• • Employers must capture the correct PAYE liability on the monthly EMP201 returns. Incorrect calculation of the monthly PAYE liability could result in the imposition of both penalties and interest. This includes corrections made on the EMP501 reconciliation, because any shortfall is attributed to the last month of the reconciliation period.
  • Employers must submit an accurate EMP501 using the e@syFile™ Employer or SARS eFiling by 31 October 2024 to avoid penalties.

Consequences of Non-compliance

If an employer submits the EMP501 late, SARS will charge administrative penalties. The penalty will equal 1% of the year’s PAYE liability, which will increase each month by 1% up to a maximum of 10% of the year’s PAYE liability. Furthermore, an employer who wilfully or negligently fails to submit an EMP201 or EMP501 return to SARS is guilty of an offence. As a result, they are liable, upon conviction, for a fine or imprisonment for up to two years.

What Constitutes a Criminal Offence?

An employer will be guilty of an offence and subjected to a fine or imprisonment for up to two years if the employer:

• • Fails to deduct employees’ tax from remuneration or pay tax to SARS within the prescribed period;
  • Does not deliver IRP5s or IT3(a)s to employees or former employees within the prescribed periods; and/or
  • Uses employees’ deducted tax or withholds it for purposes other than to pay the amount to SARS.

Status of Submission

Employers must always check the status of submissions to ensure that their EMP501 was correctly filed with SARS.

More Information

For additional information about completing manual certificates, employers can keep an eye on this webpage for the updated e@syFile™ Employer User Guide or access the Step-by-Step Guide to the Employer Reconciliation Process. The updated guides will be available on 16 September 2024.