Interim Reconciliation Season 2021
This year, the Employer Interim Reconciliation Declaration (EMP501) submission period opens on 13 September 2021 and closes on 31 October 2021. During this period, employers are required to reconcile the payroll tax liabilities (PAYE, SDL and UIF) declared on their monthly Employer Declarations (EMP201) for the first six months of a reconciliation year (1 March 2021 to 31 August 2021). The tax values of the interim IRP5/IT3(a) certificates are then generated to contain accurate payroll information, payroll tax payments made to SARS. This information is then completed on the Employer Reconciliation Declaration (EMP501) and submitted to SARS.
Making it easy
To easily reconcile the following information is at your disposal via SARS eFiling and [email protected]™ Employer:
- The latest version of [email protected]™ Employer will be available from 13 September 2021. Employers must register employees for income tax purposes using Single (“Individual ITREG”) or bundled IT Registration (“Bundled ITREG”) for existing tax numbers as well as new registrations on [email protected]™ Employer.
- Please note that employers must submit outstanding monthly declarations (EMP201) and annual reconciliations (EMP501) to SARS before submitting the Interim EMP501 for 2021.
Criminal charges for failure to submit a return
An employer who, wilfully or negligently, fails to submit an EMP201 or EMP501 to SARS is guilty of an offence and is liable, upon conviction, to either imprisonment for up to two years or both imprisonment and a fine.
Employers with less than 50 employees can use either SARS eFiling or [email protected]™ Employer to submit their reconciliation documents. Employers with more than 50 employees must file the EMP501 Reconciliation using the [email protected]™ Employer.
Employer Interim Reconciliation on [email protected]™ Employer
- Align Validation with changes in external SARS PAYE BRS
- Validation Web Service upgrades
- Changes to import file and manual capture screen to allow up to five Tax Directives with additional fields required from 2022 Tax Year.
- [email protected]™ Employer import and pre-submission validation upgrades
- Enhancement to EMP501 process
- Send Deregistration request with future dated EMP501 submissions
- ETI enhancements (prevent incorrect submissions and allow reinstatement of ETI)
- Introducing updated HTML5 forms: EMP201 and EMP501
- Enhancement to ETV feedback
- Enhancement to Reassign Certificate function
Notice of Unemployment Insurance Fund (UIF) ceiling earnings
As from 1 June 2021, the earnings ceiling for the calculation of Unemployment Insurance contributions) is R17 712 per month or R212 544 per annually. For employees who earn more than this amount, the monthly contribution is calculated using the maximum earnings ceiling amount, therefore the maximum contribution which can be deducted from 1 June 2021 for employees who earn more than R17 712 per month, is R177.12 (R 177 712 x 1%). However, the employer is liable for an equal contribution resulting in a total monthly contribution for such employee of R 354.24. This increase from R14 872 to R17 712 per month is documented in the Government Gazette no. 44641 of 28 May 2021 or see the UIF webpage.
2021 Emergency Tax Relief
- An additional Employment Tax Incentive (ETI) of up to R750 per month for the four months from August to November 2021 for private sector employers who have employees earning below R6500, was again introduced this year. This additional ETI is the same that was applicable for the four months from April to July 2020, except that the additional ETI for August 2021 amounts cannot be claimed or carried over to September 2021.
- Any ETI refunds will be paid monthly for the four from August to November 2021.
- Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their Pay–As-You-Earn (PAYE) liabilities for the 3 months from August to October 2021, without penalties or interest. The total deferred amounts for the three months will be payable in 4 equal monthly instalments commencing on 7 December 2021 to 7 March 2022.
- Tax compliant businesses in the alcohol sector can apply for deferrals of up to three months for excise duty payments.
You must be tax compliant to qualify for the emergency tax relief.
Accuracy and on-time filing is critical
It is very important for employers to 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. The Employer Reconciliation process is a crucial first step in the wider income tax process enabling SARS to issue individuals with their personal income tax return prepopulated with payroll data. Therefore, incomplete or inaccurate information will negatively affect your employees’ ability to meet their tax obligations.
Status of Submission
Employers must always check the status of submissions to ensure their EMP501 has been successfully submitted to SARS.
Compliant Employers will find it easy to meet their filing obligations, while non-compliant employers will find it progressively more difficult to engage with SARS. We thank all the compliant employers who successfully submitted previous declarations that are accurate and made the necessary payments on time.