Pay As You Earn

What’s New? 

  • 1 September 2023 – Employer’s Interim Reconciliation is part of the Filing Season

    This year, the Employer Interim Reconciliation for Employers filing season starts on 18 September 2023 until 31 October 2023. During this period, all employers in both private and public enterprises must reconcile their Monthly Employer Declarations (EMP201). These reconciliations are based on the Monthly Employer Declarations (EMP201) submitted with the tax values of the interim IRP5/IT3(a)s certificates generated, accurate payroll information and employees’ tax (PAYE) payments made during the period 1 March 2023 – 31 August 2023. Thereafter, employers can submit an Employer’s Reconciliation Declaration (EMP501) to SARS. See more detail here in a letter to Employers.

  • 4 August 2023 – The PAYE Employer Reconciliation BRS for the 2024 tax year was updated

    The PAYE BRS for Employer Reconciliation version 22 1 2 is now published (previous version was 22 1 1). The validation rules for “Reason for non-deduction of tax” (source code 4150) have changed.

  • 31 July 2023 – Updated e@syFileTM Employer Beta release available for trade testing
    SARS will again provide you an opportunity to test the updated e@syFile™ Employer build before the formal release in mid-September 2023 for the Employer Interim Reconciliation. 

The updated e@syFile™ Employer BETA version with enhanced features for download will be released to you on 14 August 2023.  See the Business Requirements Specification here –  SARS_PAYE_BRS – PAYE Employer Reconciliation_V22.1.1 for the Employer Interim Reconciliation submission period 202308. 

During the testing period from 14 August 2023 to 6 September 2023, all online functionality will be disabled to prevent the incorrect submission of test data into the production environment. This means the application will default to offline mode. Certain menu options will also be disabled as a precautionary measure.

Enhancements will include:

    • Minor amendments to source code validations.
    • A separate read-only IRP5/IT3(a) certificate that can be issued to employees.

You will be provided with a link in a follow up letter which will allow you access for testing purposes. Please note that this link is confidential and only available to selected individuals. In order to maintain its confidentiality, please exercise caution and do not share it with others.

  • 20 June 2023 – PAYE Administrative Penalties Update

    During the month of June 2021, SARS introduced the PAYE Admin Penalty solution. The implemented interim solution provided SARS with the ability to impose PAYE administrative penalties, which meant charging admin penalties for the failure to submit EMP501 reconciliations on time.

    PAYE admin penalty was divided into 3 phases with the first 2 phases having already being implemented as follows.

    • Phase 1 was implemented in June 2021; and
    • Phase 2 was implemented in April 2022

    SARS is currently in the process of implementing phase 3, on 23 June 2023, which aims to incorporate the legal changes that were effected on the 19th June 2022. The PAYE Admin Penalty Phase 3 will include:

    • Admin Penalty Imposition – “Para 14(7) If the total amount of employees’ tax deducted or withheld, or which should have been deducted or withheld for the period described in subparagraph (3), is unknown, the Commissioner may estimate the total amount based on information readily available and impose the penalty under subparagraph (6) on the amount so estimated”;
    • Admin Penalty Adjustment – “Para 14(8) Where, upon determining the actual employees’ tax of the person in respect of whom the penalty was imposed under subparagraph (7), it appears that the total amount of employees’ tax was incorrectly estimated under subparagraph (7), the penalty must be adjusted in accordance with the correct amount of employees’ tax with effect from the date of the imposition of the penalty under subparagraph (6) read”

    It is important to note that the effective date of the enhancement to the admin penalty process (imposition and adjustment) will only be from the date of promulgation (19 January 2022). The legal changes to the admin penalty imposition and adjustment rules may not be applicable to any recon period prior to 19 January 2022, which means that this takes effect for recon period 202202 and onwards.

  • 2 June 2023 – The PAYE Employer Reconciliation BRS for the 2024 tax year was updated

    The PAYE BRS for Employer Reconciliation version 22 1 1 is now published (previous version was 22 1 0). The validation rules for source codes 3903/3953, 3905/3955 and 4150 was amended in this version.

  • 30 March 2023 –  Employer Annual Declaration opens on 1 April and closes on 31 May 2023
    During this period, employers are required to submit their annual reconciliation declarations (EMP501) that reflect accurate and the latest payroll information about their employees, monthly employer declarations (EMP201) for PAYE, UIF and SDL; payments made (excluding penalties and interest paid); and employee tax certificates (IRP5/IT3(a)s generated, covering the full tax year from 1 March 2022 to 28 February 2023. For more information on how we will help you to comply, submission channels, enhancements to e@syFile ™ Employer and more, see our letter to stakeholders.

  • 27 March 2023 – The PAYE Employer Reconciliation BRS for the 2024 tax year was updated

    The PAYE BRS for Employer Reconciliation version 22 1 0 is now published (previous version was 22 0 0). The validation rules for the Directive Information fields have been amended.

  • 24 February 2023 – PAYE Employer Reconciliation BRS v22 0 0 for the 2024 tax year was released.
    The following source codes were amended: 2025, 2036, 3040, 3231, 3232, 3233, 3234 and 4150.
  • 24 February 2023 – PAYE Employer Reconciliation BRS for the 2024 tax year
    The following source codes have been amended: 2025, 2036, 3040, 3231, 3232, 3233, 3234 and 4150.

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*                       

BRS – PAYE Employer Reconciliation for 2023 / 2024

2024 Annual Employer Reconciliation (1 March 2023 – 29 February 2024)

Interim: 18 Sep – 31 Oct 2023
Annual:
1 April – 31 May 2024

BRS – PAYE Employer Reconciliation for 2022 / 20232023 Annual Employer Reconciliation (1 March 2022 – 28 February 2023) 

Interim: 19 Sep – 31 Oct 2022
Annual: 1 April – 31 May 2023

BRS – PAYE Employer Reconciliation for 2021 / 20222022 Annual Employer Reconciliation
(1 March 2021 – 28 February 2022) 

Interim: 13 Sep – 31 Oct 2021
Annual: 1 Apr – 31 May 2022

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 / 20202020 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 / 20192019 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 / 20182018 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?

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. See How to register for PAYE on eFiling.

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?

The amounts deducted or withheld must be paid by the employer to SARS on a monthly basis, by completing the Monthly Employer return (EMP201). The EMP201 is a payment return 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:
  • 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.   

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