Employer Annual Declarations (EMP501): 1 April to 31 May 2025
Dear Employer
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.
Employees’ Tax Compliance Starts with You, the Employer
The Employer Annual Declaration period is open from 1 April and closes on 31 May 2025. During this period, Employers must submit their annual reconciliation declarations (EMP501) with accurate and current employee payroll information. Your EMP501 must include:
- Monthly Employer Declarations (EMP201) for PAYE, Unemployment Insurance Fund contributions (UIF), and the Skills Development Levy (SDL).
- Information about payments made (excluding penalties and interest paid).
- Employee tax certificates (IRP5/IT3[a] generated) covering the tax year from 1 March 2024 to 28 February 2025.
What’s New?
SARS has introduced an enhanced version of the e@syFile™ Employer software (version 8.0) to enrich your filing experience. The latest version comes with improved capability, ensuring a smoother, more efficient reconciliation process. We encourage employers, tax practitioners, and payroll administrators to download the new e@syFile™ Employer v8.0 from the e@syFile download page on www.sars.gov.za before submitting the Employer Annual declarations.
How to Fulfil Your Tax Obligations
Before submitting the 2025 EMP501, you must submit any outstanding monthly declarations (EMP201) and annual EMP501 reconciliations. 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.
It is the responsibility of employers to register employees who are not registered for Income Tax.
This can be done using Individual ITREG for a single employee or Bundled ITREG for multiple employees. Both options are available on e@syFile™ Employer.
Why Is It Important to File Accurately and on Time?
The employer reconciliation process is the key precursor to the Income Tax Filing Season which takes place later in the year. The information gathered during the Employer Annual Declaration period aids SARS to issue taxpayers 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.
It is crucial to submit the required documents and payments to SARS by the dates given above.
Channels to File Your EMP501
Employers with more than 50 employees:
- Must file an EMP501 using e@syFile™ Employer.
Employers with between one and 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 Employee 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 on the Businesses & Employers page on www.sars.gov.za.
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.
