The 2019 Employer Annual Reconciliation filing season will soon be opening on 17 April 2019 (it is usually 1 April but has been delayed due to system upgrades at SARS). You have until 31 May 2019 to submit your Annual Reconciliation Declaration (EMP501) for the period 1 March 2018 – 28 February 2019 to SARS.
SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS and these are available under the Filing section of the menu. Submissions of your EMP501 can be done via eFiling or the [email protected] application. You may need to update your [email protected] application to the latest version, 6.9.4. This can be done here. Please remember to back up your current information on your computer before installing a new version of [email protected]
For more information about the bi-annual filing process, refer to this help page. We also have a useful guide to take you through it step by step. The guide contains an important checklist which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]
As always, please feel free to contact us at [email protected] if you have any questions.
As of 1 March 2019, all contributions made by employers to funds provided by Bargaining Councils should be treated as a fringe benefit and are therefore subject to tax. These funds include, but are not limited to sick and holiday funds for employees that belong to the Bargaining Council. Note that if the fund administered by the Bargaining Council is a retirement fund, the taxation rules for retirement funds that are effective from 1 March 2016 (and that provide for a tax deduction to reduce the taxable benefit value) are applied.
In some instances, both you (the employer) and the employee contribute to the fund. The taxable fringe benefit is equal to your contribution and should now be reported on the IRP5/IT3(a) under the following new codes:
4584: Employer contributions to a Bargaining Council Fund
3833: Taxable benefit iro Employer contributions to a Bargaining Council Fund
Employee-paid contributions do not impact PAYE (they are not tax deductible) and therefore are not reported.
What action do you need to take?
If you set up these contributions using a Custom Employer Contribution item, you need to update this custom item on your payroll or Bargaining Council template to a Custom Benefit item. This will ensure that the contribution is treated as a taxable fringe benefit.
A new checkbox has been added which allows you to indicate that the Custom Benefit item is a Bargaining Council Item. This ensures that the new tax codes are applied to the custom item.
If you have many companies and need to automate this process, please get in touch with our Support team to discuss possible solutions.
If you have any further queries, please do not hesitate to contact us.