Visit the national COVID-19 Online Resource and News Portal at www.sacoronavirus.co.za or see SARS COVID-19 news items and tax relief measures here.

Pay As You Earn

What’s New? 

  • 13 July 2021 – Introduction of penalties for PAYE

The penalty for late filing of a Pay-As-You-Earn (PAYE) reconciliation was introduced for the first time this year.  However, we are still in the process of enhancing our Dispute Resolution process so that this penalty can be disputed separately from a PAYE late payment penalty.

In the event that you receive another PAYE penalty for the same tax period, you will not yet be able to do a Request for Remission or lodge an Objection against the added penalty on eFiling when your prior Request for Remission or Dispute has already been finalised.

Our enhancements to the Dispute Resolution process should be ready soon, but in the event that you wish to do a Request for Remission or Dispute in relation to such an added penalty, SARS will as an interim measure accept a written Request for Remission or ADR1/ADR2  forms in relation to the added PAYE penalty.  

To make use of the interim process to submit a Request for Remission, Notice of Objection or Notice of Appeal, please follow these steps:

Step 1

Check on eFiling that the penalty amount for which you wish to request remission, object or appeal against is indeed blocked from being submitted.  If eFiling blocks you then proceed to Step 2.

Step 2

Type or write a Request for Remission, and make sure that you include the reason for your request as well as the PAYE reconciliation period or transaction numbers of the penalties incurred or the EMP201 periods.  Before you do all of this please visit the Request for Remission of Administrative Non-compliance penalty webpage to understand the legislative requirements.

If you already submitted a Request for Remission but you remain aggrieved by the outcome then use the ADR1 form in the case of an objection.  If you already objected and the objection was dismissed, and you wish to appeal, then use the ADR2 form.  The ADR1 and ADR2 forms can be downloaded here https://www.sars.gov.za/find-a-form/.

Step 3

Submit your Request for Remission, ADR1 or ADR2 to [email protected] or [email protected]You will receive a case number which must be used in any future correspondence with SARS relating to this matter.

Step 4

Once we have considered the request for remission, objection or appeal, SARS will notify you by way of a letter addressed to your preferred channel of communication.

  • 30 June 2021 – [email protected] version 7.1.4 was released
  • 28 June 2021 – [email protected] version 7.1.3 was released
  • 8 June 2021 – Updated PAYE BRS Employer Reconciliation version 20.0.1
  • 7 June 2021 – [email protected] version 7.1.2 was released
  • 1 June 2021 – Employers Filing season is now closed. It was open from 1 April to 31 May 2021. You may still submit, but please note that penalties may apply.
  • 19 May 2021 – Watch our YouTube video on the consequences of non-compliance for PAYE tax by clicking on the image below:
  • 6 May 2021 – Updated PAYE BRS Employer Reconciliation version 20.0
  • 6 May 2021[email protected] version 7.1.1 was released
  • 15 March 2021 – Employer Annual Reconciliation: 1 April 2021 to 31 May 2021

    SARS constantly strives to improve its service offering to taxpayers. Changes introduced to SARS’ systems are a vital part of our vision to have a more accurate reconciliation process.  Correct information submitted on time to SARS leads to a seamless tax experience for both employees and employers. For more information, please read the letter to our stakeholders.

  • 8 March 2021 – Preparation for annual Employers Filing Season

    SARS calls on employers to ensure that they are ready to submit their annual reconciliation declarations with the latest and most accurate payroll information about their employees and the tax they have deducted.

    The data that must be submitted to SARS from employers should cover the Monthly Employer Declarations submitted, payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March 2020 to 28 February 2021.

    Employers have from 1 April 2021 to 31 May 2021 to submit their data to SARS.

  • 15 December 2020 – [email protected] version 7.1.0 was released
  • 11 December 2020 – Updated PAYE BRS Employer Reconciliation version 19.5

    The correct validation for information code 4587 – Section 10(1)(o)(ii) exemption taken into account by the employer for PAYE purposes has been reinstated. In addition, the validation of source code 4102 – PAYE has been updated to be clear and concise.

  • 5 October 2020 – [email protected] version 7.0.9 was released
  • Covid-19 PAYE Deferral Relief: Payment of Deferred Amounts 

    Affected employers were advised on 6 October 2020 that they can unfortunately not include the Covid-19 PAYE Deferred Relief payment due on 7 October 2020 in their September 2020 EMP201 declaration payments via eFiling. Separate payments via eFiling were required for September 2020 which were due on 7 October 2020.

    The EMP201 payment function via eFiling has now been amended and employers will be able to submit a single payment via eFiling in respect of their monthly EMP201 declaration payment and the Covid-19 PAYE Deferred Relief payment with immediate effect. Employers will be able to increase the EMP201 declaration payment amount on eFiling to include the Covid-19 PAYE Deferred Relief Amount payable in respect of the relevant month. 

  • 6 October 2020 – Covid-19 PAYE Deferral Relief: Payment of Deferred Amounts [Refer to the above 26 October 2020 notice]

The Statement of Account (EPMSA) was amended during the first half of September 2020 to include detail of the monthly deferred payments [Payment Reference Numbers (PRN’s) and amounts] payable over the six month period from 7 October 2020 to 5 March 2021.

Affected employers can unfortunately not include the Covid-19 PAYE Deferred Relief payment due on 7 October 2020 in their September 2020 EMP201 declaration payments via eFiling:

  • Employers are required to pay the PAYE Deferred Relief payment separately via eFiling by using the PRN next to “COVID-19 INSTALMENT” for October 2020 on the EMPSA which is available on the eFiling profile.
  • Alternatively, employers may use the EFT payment option by using the “SARS-PAYE” beneficiary option under the SARS public beneficiary listed on the banking platforms and using the PRN on the EMPSA or the EMP201 declaration for September 2020. 

If any changes to this process is implemented before the next payment which is due on 6 November 2020, SARS will issue a further notice before that date.

  • 14 September 2020 – Known issue with Information code 4587

Information Code 4587 – Section 10(1)(o)(ii) exemption taken into account by the employer for PAYE purposes : Relaxation of validation rules for August 2020 (202008) Employer Interim Reconciliation.

SARS acknowledges concerns raised by payrolls that the application of the current validation rules for code 4587 may result in certain employers not being able to submit their interim IRP5/IT3(a) certificate information.

These validation rules as specified in the SARS Business Requirements Specification: PAYE Employer Reconciliation (2020 Release) version 19.4 will be relaxed for the August 2020 Employer Interim Reconciliation submission.

The relaxation of the validation rules will be implemented during the weekend of 19 September 2020 and the affected employers are requested not to submit their Interim Reconciliation documents before Monday, 21 September 2020.

These validation rules will be reviewed and clearly defined to provide clarity. An updated SARS Business Requirements Specification: PAYE Employer Reconciliation (2020 Release) will be issued shortly and the amended validation rules will be implemented towards the end of 2020.

  • 14 September 2020 – Employer Interim Reconciliation submission period is from 14 September to 31 October 2020

    During the Employer Interim Reconciliation, employers need to reconcile their Monthly Employer Declarations (EMP201) for the first six months of a Reconciliation Year (March to August) with the tax values of the interim IRP5/IT3(a) certificates for the same period and submit their Employer Reconciliation Declaration (EMP501). Read more on the changes below or click here for the letter to our stakeholders.

New source codes for the 2021 Year of Assessment

The following new source codes are applicable for the 2021 Year of Assessment:

    • Income code 3618/3668: Fund Administrators must use these codes to declare regular pension or purchased annuity payments originating from provident or provident preservation funds.

      The following income codes differentiate between pension or purchased annuity payments originating from the following sources respectively:

      • 3603/3653 – pension or purchased annuity payments originating from pension or pension preservation funds,
      • 3618/3668 – pension or purchased annuity payments originating from provident or provident preservation funds,
      • 3610/3660 – pension or purchased annuity payments originating from retirement annuity funds, and
      • 3611/3661 – taxable portion of a purchased annuity paid by long-term insurers not from a retirement fund.
    • Income code 3724: Employers must use this code to declare any payment received by their employees from a COVID-19 Disaster Relief Organisation. These payments do NOT include payments received from the Unemployment Insurance Fund (UIF) Temporary Employees Relief Scheme (TERS).
      • Payments from the UIF TERS are exempt from tax and must not be reflected on the IRP5/IT3(a) certificate issue by employers to their employees.
    • Deduction code 4055: Employers must use this source code to declare any donations made by employers on behalf of employees to the COVID-19 Solidarity Fund.
      • Donations made to other qualifying COVID-19 Disaster Relief Organisations must be declared under existing deduction code 4030.
    • Information code 4587: Employers must use this code to indicate the value of the section 10(1)(o)(ii) foreign remuneration exemption taken into account for calculating PAYE.

Excessive Liability Change Workflow

SARS have found that some employers do not capture the correct PAYE liability on the monthly EMP201 returns. The incorrect calculation of the monthly PAYE liability may result in imposition of penalties and interest. This includes corrections done on the EMP501 reconciliation and any shortfall is attributed to the last month of the reconciliation period.

As from the 2019 Year of Assessment, SARS is comparing the PAYE liabilities captured on the EMP501 with the PAYE liabilities declared in the EMP201 returns and processed in the accounts for the relevant months. If the liabilities captured on the EMP501 is significantly reduced, SARS will inform the employer of the said excessive liability changes per letter. SARS will request the employer to amend its EMP501 submission.  If the employer chooses not amend the EMP501 submission, SARS will route the EMP501 for manual intervention. SARS will determine if the changes are correct based on the reason provided by the employer. If the employer did not provide sufficient motivation, SARS will engage with the employer to resolve the issue.

Employment Tax Validation

The Employer Reconciliation process is a crucial first step in the wider income tax reconciliation process enabling SARS to issue individuals with their personal income tax return prepopulated with payroll data. This, together with information from other providers of third party information, makes it easier for individuals to fulfil their income tax obligations.

Therefore, it is important that the information contained in IRP5/IT3(a) certificates is correct. SARS will validate the employment tax liabilities declared on the IRP5/IT3(a) certificates and if inconsistencies have been identified, notify employers per letter on eFiling or [email protected]™.

New Notice of Non-Compliance Penalty Assessment

From the end of September 2020, a monthly Notice of Non-Compliance Penalty Assessment will be issued to employers showing all the imposition of penalties on the account for that specific month.

[email protected]™ changes

      • Enhanced resubmission function:
        When a resubmission of an EMP501 reconciliation is done, [email protected]™ will include all IRP5/IT3(a) certificates instead of only the amended certificates.
      • Time-out issue resolved:
        The time required to download the [email protected]™ Employer varies due to network and PC configurations. In some instances, employers get a time-out notification while the download is running and they have to login again. To address this, SARS had introduced a pop-up message to advise the user that he/she cannot use [email protected]™ functions while downloading the new version
      • Summary report:
        SARS will provide a summary report to employers with big payroll systems or use [email protected]™ to merge data from multiple payroll systems to verify the certificates included in a reconciliation submission. This function will be available under the EMP501 Reconciliation and will allow employers to extract a pipe delimited file for a specific period of reconciliation.
  • 31 August 2020 – DISASTER MANAGEMENT TAX RELIEF BILL [B 11B—2020] & DISASTER MANAGEMENT TAX RELIEF ADMINISTRATION BILL [B 12B—2020]

    The above-mentioned Bills are currently being considered by Parliament.  These Bills were passed by the National Assembly on 26 August 2020 and are now with the National Council of Provinces for approval before they are sent to the President for Assent.

    The following links may be used to access these Bills:

  • 28 August 2020 – Extension of COVID-19 PAYE Deferral Relief

    Although the amended Disaster Management Tax Relief Administration Bill to extend the deferral of the payment of employees tax liability for tax compliant small to medium sized businesses with one month until 31 August 2020 has not been published yet, it is confirmed that the amended Bill was passed by the National Assembly on 26 August 2020.

    The amendment specifically refers to the –

    • deferral being applicable to amounts deducted or withheld during the period commencing on 1 April 2020 and ending on 31 August 2020 with same requirements as previously, and
    • require the payment of the deferred amounts to be paid in six equal monthly instalments, commencing on 7 October 2020 and ending on 5 March 2021.

The amended Bill should soon become available.

Under the circumstances, SARS had no alternative to the approach followed with the COVID-19 Tax Relief measures to date, which is to implement the pending legislation before it is passed. The Statement of Account (EPMSA) will be amended during September 2020 to include detail of the deferred payments. This will enable qualifying employers to remain compliant.

  • 25 June 2020 – FAQ published for COVID-19 SASSA grant applications being declined with
    a SARS reason

Q: ​​I’m unemployed and applied for the COVID-19 grant at SASSA but it was declined with a response ‘Registered at SARS for PAYE’ or ‘Receiving an income’?

A: It should be noted that SASSA determines the criteria for paying of the grant or not. According to SASSA, to qualify for the grant, you need to be unemployed (not having any source of income) and not receive UIF or any other grants. Should this not be correct, please email SASSA on [email protected] if any complaints.

  • 18 June 2020 – Updated PAYE BRS for Employer Reconciliation (2020 release) version 19.04
    In this version the descriptions of the source codes for the donations to the COVID19 Solidarity Fund has been amended, as well as the ETI fields to cater for additional ETI that may claimed as part of the COVID19 Tax Relief.
  • EMP201 deadline extension
    An extension for submissions of EMP201 is granted until midnight of 8 June 2020 due to problem on 5 June when the SARS system was down. Returns received after 5 June but before midnight 8 June 2020 will not incur any penalties or interest. Employers who could not file their EMP201s would not be able to complete the ETI on their returns and will have to submit a request to SARS to process the ETI on their behalf.
  • 1 June 2020 – Employers Filing season is now closed. It was open from 15 April to 31 May 2020. You may still submit, but please note that penalties may apply.
  • 18 May 2020 – [email protected] version 7.0.5 was released
    • Introducing an updated EMP201 declaration to incorporate Covid-19 changes in legislation for SDL
      payment holidays
    • Adjustment to validation for source codes 7002 and 7005 to align with the SARS PAYE BRS, allowing
      but not expecting a zero balance under specified circumstances.

  • 12 May 2020 – Employment Taxes Validation (ETV)
    From the 2020 year of assessment, SARS is performing tax calculations on the IRP5/IT3(a) certificates. Where it is found that the incorrect amount of tax was deducted from the employee, a letter will be issued, accompanied by a file containing a list of the certificates that have failed the SARS calculation.
  • 25 April 2020 – FAQs for Employers on Tax Relief for COVID-19
  • 23 April 2020 – Updated PAYE BRS for Employer Reconciliation (2020 release) version 19.03 was published.

    The PAYE BRS for Employer Reconciliation (2020 release) has been updated with the requirements for the COVID-19 Tax Relief to enable employers to claim the increase of the extended ETI, declare donations to the Solidarity Fund and payments received from UIF.
  • 22 April 2020 – PAYE BRS for Employer Reconciliation (2020 release) version 19.02 was published.
    The PAYE BRS for Employer Reconciliation (2020 release) was updated with the requirements for the COVID-19 Tax Relief for ETI to enable employers to calculate the extended ETI.
  • 17 April 2020 – Printing of IRP5/IT3(a) certificates
    We are aware that employers may be experiencing problems with the printing of IRP5/IT3(a) Employees’ Tax certificates from the eFiling platform. We recommend that you submit your Employer Reconciliation Declaration (EMP501) to SARS but do not yet print any IRP5/IT3(a) certificates. We will inform you when printing of IRP5/IT3(a)s using the eFiling platform may resume.
  • 15 April 2020 – Employer Annual Reconciliation was open from 15 April and closed 31 May.
  • 3 April 2020 – Frequently Asked Questions on Tax Measures (will be updated on a regular basis)
  • 31 March 2020 – Updated PAYE BRS for Employer Reconciliation (2020 release) version 19.01 was published.
  • 4 September 2019 Updated PAYE BRS for Employer Reconciliation (2019 release) version 18.05 was published.

Business Requirement Specifications (BRS) and timelines

Business Requirement Specification
       Year Applicable                 Submission dates*                       
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 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:
  • 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.

To access this page in different languages click on the links below:

Related Documents

EMP-GEN-02-G01 – A Guide to the Employer Reconciliation Process – External Guide

EMP101e – Application for Registration PAYE SDL UIF – External Form

EMP102e – Application for Separate Registration of Business or Branch – External Form

EMP123 – Application for Cancellation of Registration of a Person iro All His Business – External Form

EMP123T – Application for the Cancellation of Registration of a Separately Registered Business – External Form

EMP128 – Confirmation of Partnership – External Form

GEN-ELEC-21-G01 – How to download the new SARS eFiling Browser – External Guide

LAPD-ETI-G01 – Guide to the Employment Tax Incentive

LAPD-Gen-G01 – Taxation in South Africa

LAPD-Gen-G02 – Guide for Tax Rates Duties Levies

LAPD-Gen-G08 – Guide on the Taxation of Professional Sports Clubs and Players

LAPD-IT-G05 – Guide on the Employers Tax Responsibilities wrt Artists Models or Crew in the Film Industry

LAPD-IT-G06 – Guide to the Taxation of Film Owners

LAPD-IT-G19 – Comprehensive Guide to Dividends Tax

LAPD-IT-G24 – Guide on Mutual Agreement Procedures

LAPD-IT-G25 – Guide to the Exemption from normal tax of income from films

LAPD-VAT-G12 – VAT and PAYE NonExecutive Directors FAQs on BGRs 40 and 41

PAYE-AE-06-G06 – Guide for Codes Applicable to Employees Tax Certificates 2021 – External Guide

PAYE-AE-06-G07 – Guide for Validation Rules Applicable to Reconciliation Declarations 2021 – External Guide

PAYE-AE-06-G08 – Guide for Completion and Submission of Employees Tax Certificates 2021 – External Guide

PAYE-BO-SOP01-L03 – Application for Determination of Residential Benefit Value – EMPRB External form

PAYE-GEN-01-G01 – Guide for Employers in respect of Tax Deduction Tables – External Guide

PAYE-GEN-01-G02 – Guide for Employers in respect of Fringe Benefits – External Guide

PAYE-GEN-01-G03 – Guide for Employers in respect of Allowances – External Guide

PAYE-GEN-01-G04 – Guide for Employers iro Employees Tax for 2015 – External Guide

PAYE-GEN-01-G05 – Guide for Employers in respect of Employment Tax Incentive – External Guide

PAYE-GEN-01-G10 – Guide for Employers iro Employees Tax for 2016 – External Guide

PAYE-GEN-01-G11 – Guide for Employers iro Employees Tax for 2018 – External Guide

PAYE-GEN-01-G12 – Guide for Employers iro Employees Tax for 2017 – External Guide

PAYE-GEN-01-G13 – Guide for Employers iro Employees Tax for 2019 – External Guide

PAYE-GEN-01-G14 – Guide for Employers iro Employees Tax for 2020 – External Guide

PAYE-GEN-01-G15 – Guide for Employers iro Employees Tax for 2021 – External Guide

SDL-GEN-01-G01 – Guide for Employers in respect of Skills Development Levy – External Guide

UIF-GEN-01-G01 – Guide for Employers in respect of the Unemployment Insurance Fund – External Guide

VDP-EMP-01-G01 – Guide for Treatment of PAYE for VDP Purposes – External Guide

Frequently Asked Questions

Table of Contents

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