Reconciliations

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.

  • 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 for the 2024 tax year

    The following source codes have been amended: 2025, 2036, 3040, 3231, 3232, 3233, 3234 and 4150.
  • 27 October 2022 – The PAYE BRS for Employer Reconciliation was updated

    The PAYE BRS for Employer Reconciliation version 21 2 is now published (previous version was 21 1). The changes are:

    • Relaxed the validations for email addresses and
    • Amended the description for the Fixed Rate Indicator.
  • 14 September 2022 – Employer Interim Reconciliation submission 19 September to 31 October 2022

    This year, the Employer Interim Reconciliation Declaration (EMP501) submission period opens on 19 September 2022 and closes on 31 October 2022. Employers are required to reconcile their Monthly Employer Declarations (EMP201) for the first six months of a Reconciliation Year (1 March 2022 to 31 August 2022). 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, employees’ tax (PAYE) payments made, thereafter an Employer’s Reconciliation Declaration (EMP501) is submitted.  Click here for more information on the employer interim reconciliation submission.

  • 12 September 2022 – Employer Interim Reconciliation Filing Season 

    Please be advised that in preparation for the opening of the Employer Interim Reconciliation Filing Season on 19 September 2022, the prepopulated liabilities reflected on the Reconciliation Declaration (EMP501) during the period 14 to 16 September 2022 may not be complete.

    • This will only affect employers for whom a Revised Declaration (EMP201) was processed from 14 to 16 September 2022, for a month during the relevant EMP501 reconciliation period.
    • Affected employers are advised to submit such a Reconciliation Declaration (EMP501) from Monday, 19 September 2022.

What is Reconciliation?

It involves an employer submitting an accurate Employer Reconciliation Declaration (EMP501), Employee Tax Certificates [IRP5/IT3(a)s] to be issued and if applicable, a Tax Certificate Cancellation Declaration (EMP601).

The three elements that must reconcile in order for your submission to be successful are the:

  • Monthly Employer Declarations (EMP201s) submitted [Pay-As-You-Earn (PAYE) and/or Skills Development Levy (SDL), Unemployment Insurance Contributions (UIC) amounts due and Employment Tax Incentive (ETI), if applicable]
  • Payments made (excluding penalty and interest payments)
  • IRP5/IT3(a)s generated – PAYE, SDL and UIC values.

Who is it for?

Employers need to submit their reconciliation by the date published in the Government Gazette.

When and how should submissions be made?

Reconciliation declarations should be submitted twice during year of assessment, for the:
  • Interim period – which is for the six month period 1 March to 31 August
  • Annual period – which if for the full year 1 March to 28/29 February.

The Business Requirement Specification (BRS) defines the data submission requirements for the tax certificates [IRP5/IT3(a)s],  and the reconciliation for PAYE, SDL, UIC and/or ETI, if applicable.

Business Requirement Specifications (BRS) and timelines

See the table on the PAYE landing webpage for the BRS, Year Applicable and the Submission dates.

* 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. 

Completing your reconciliation online is the quickest, easiest and most convenient option. You can use either:

Copies of all declarations submitted and related supporting documents (relevant material) must be kept for five years.
Top Tip: Should your submission not balance across the three elements [EMP201, payments submitted and IRP5/IT3(a)s)], we will alert you by letter.

Don’t forget the following important details:

1. Make sure you have the latest version of e@syFile™ Employer available.
 
2. Import the electronic Employee Tax Certificates [IRP5/IT3(a)s] CSV files from your current payroll system.
 
3. Reconcile your EMP501 –
  • Capture all additional manual IRP5/IT3(a)s, and e@syFile™ Employer will use the information, from all the tax certificates, to automatically calculate the certificate totals for your EMP501.
    • Enter your monthly liabilities, payments and Employment Tax Incentive (ETI) information, if applicable, and e@syFile™ Employer will calculate the rest!
4. Manually completed Payroll Tax, posted, are no longer accepted.
These forms include:
  • Monthly Employer Declaration (EMP201)
  • Employer Reconciliation Declaration (EMP501)
  • IRP5/IT3(a)s
  • Tax Certificate Cancellation Declaration (EMP601)
  • Reconciliation Declaration Adjustment (EMP701).

Top Tip: An exception is made for employers with a maximum of five IRP5/IT3(a)s. The employer can still go into a SARS branch where an agent will help them capture these IRP5/IT3(a)s and the EMP501. Remember to make an appointment first before going into a branch.

These electronic channels are free, convenient and available 24/7.

5. Make sure your reconciliation submission balances.
  • The EMP501 must reconcile to your EMP201s, which should have been submitted during the period (giving you a chance to correct this, where needed).
  • The EMP201s must reconcile to payments made for the period.
  • The EMP201 payments must reconcile to your IRP5/IT3(a)s generated.

Top Tip: Experiencing problems due to duplicate or incomplete EMP501 submissions made on e@syFile™ Employer, read more here.

6. Send your reconciliation before the deadline to avoid penalties and interest being charged.

When an audit is done internally by SARS on the EMP501, and PAYE liability is amended thereby, the employer is required to re-submit the EMP501 in accordance with the audit result on the assessment (EMP217).
 
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