Lockdown Recap Blog #3

Despite a shortened week caused by not one, but two public holidays, it has been yet another busy period. In this blog we shall recap and link you to the important news and updates from the past days.

Recent Blogs and their Content

To help address confusion surrounding everything to do with lockdown, we have been creating several blogs to both inform you on updates to support measures and let you know how SimplePay is making your life easier to access these. 

It is worth noting that the more recent the blog, the more up to date the information is, so it is advisable to work back from the most recent when looking for information. Equally though, the previous blogs are extremely useful for providing context and building a broad base of knowledge.

Below you will find a list of the most recent blogs and their content, just in case you missed them!

29 April Update Blog Contents:

  • Clarification on how the TERS Payout functions and the impact of employer additional payments; 
  • Expansion of applicability for the 35% PAYE deferment scheme; 
  • Delay to Tourism Relief Fund Payout; and 
  • Information on updates to annuity funds.

28 April Update Blog Contents:

  • Summary of the Minister for Finance’s speech on 23 April, notably listing prospective financial support measures

24 April Update Blog Contents:

  • Information on how TERS benefit is to be distributed to employees;
  • Increase in the amount of employers able to apply to TERS; and
  • TERS application tracker.

23 April Update Blog Contents:

  • Nature of TERS payouts;
  • Clarification on the dates for TERS CSV export; and
  • A summary of poignant parts of President Ramaphosa’s speech from 21 April. 

Blogs which predate the ones listed are linked in our previous two lockdown recap blogs (below). 

Lockdown Recap #2 Content:

  • PAYE tax deferment, TERS, ETI, Tourism and Industrial support, Interest Rate reduction, filing.
  • Details of changes that occurred between 6 and 14 April (+retrospective additions);

Recap Blog #1 Contents:

  • List of Governmental body contact numbers, FAQ’s on a variety of topics and an explanation of the options open to employers and their employees.
  • Details of changes that occurred between 27 March and 14 April.

Dedicated TERS Blogs

Update 7 May: The Department for Employment and Labour has not yet started accepting TERS applications for the month of May. They have requested that applicants continue to revisit the website until applications for May become live.

8 May Update blog: clarification on the manner in which you calculate TERS benefit payouts, as well as the effect of employer contributions on the TERS benefit amount.

New System Item: TERS Benefit Payout Contents:

  • Details of how you can record employee’s TERS payout on the payslip using SimplePay.

Update to TERS Application Channel Content:

  • New mandatory online application method (CSV Export is still utilised).

COVID-19 TERS CSV Export Content:

  • Details surrounding the TERS CSV export required when applying, which can be exported from Simplepay.

A full list of COVID-19 related posts, including information on UIF claims can alternatively be found on our website. 

Additional Updates

30 April: Lockdown Level 4

Following President Ramaphosa’s speech on 21 April, tomorrow South Africa will enter into lockdown level 4. This reduces the strictness of the measures that have been in place over the last 6 weeks, and provides opportunities for some businesses to reopen their doors.

The Government website provides information on what the changes that will come into place tomorrow are. A page on these measures can be found here.

Status of Changes from the Finance Minister’s Speech – 28 April

There was mention of an increase in the COVID-19 Employment Tax Incentive (ETI) amount from R500 to R750; When does this come into effect?

The increase in the amount of ETI will be given legal effect when the changes to the Disaster Management Tax Relief Bill and the Disaster Management Tax Relief Administration Bill are passed into law. These were meant to have been released today, 30 April, but unfortunately appear to have been delayed.

If you have any questions on ETI in the meantime, a useful source is the SARS Question and Answer page, found here.

We are making good progress on finishing the necessary adjustments to our system for you with respect to ETI, in time for the 7 May deadline. If it does turn out that this increase of R750 per employee is retrospective to 1 April, and you have already completed your EMP201 submissions we shall endeavor to ensure that the ETI carries over to the next month. If this is not possible for whatever reason, we shall get in contact with you to request that you resubmit your EMP201s.

How will the Skills Development Levy Holiday Function?

As above with ETI, we are still waiting for the release of the Bills to know how this is going to function. 

This is a less pressing matter though as the initial drafts from SARS do not have the commencement of the payment holiday until 1 May, or in other words until your next pay run. We shall therefore get back to you as soon as we know more about this.

Frequently Asked Questions

How can I track the progress of my TERS application?

In our blog on 24 April, we mentioned the new TERS application tracker. This is likely the fastest way to follow the progress of any applications which you have. 

Alternatively, you can call the TERS hotline on 012 337 1997.

Something has gone wrong during my online application to TERS – HELP! 

Sadly we cannot express any special knowledge as to what may have happened during an online application to TERS. Therefore we would recommend that you persevere with trying to contact the TERS hotline on 012 337 1997. We understand that this is an incredibly stressful and frustrating situation and will continue in our endeavors to obtain and provide any additional information we can.

I have submitted a UIF application through SimplePay, but have not received a response yet; what should I do?

Having submitted an application for UIF using SimplePay, first you will receive a status reading “awaiting response”, which will then change to “confirmed”. 

At this moment in time it is taking a minimum of seven (7) days for a response to come back from UIF. Therefore, we would request that you wait a minimum of seven (7) days before contacting us with a query on this. If, after this period, your submission has still seen no progress please feel free to get in touch with our customer service team on [email protected]

We hope that this information proves useful to you. If you have any queries on how the above relates to payroll and the SimplePay system, please feel free to get in touch with our customer support team at [email protected].

Keep well. Stay home. Stay safe.

Team SimplePay

Lockdown Update – 29 April

In the blog today we have a clarification on TERS payouts and additional payments by employers. Additionally, we will provide information on possible changes to annuity funds for individuals who are currently drawing down from a living annuity, an expansion to the 35% PAYE deferment as well as other relevant news.

TERS Payouts and Additional Payments by Employers

Update 8 May: If looking for guidance on the calculations relating to the TERS payout and effect of additional employer contributions, please kindly disregard the SAICA guidance below and refer to our latest blog post here.

Update 7 May: The Department for Employment and Labour has not yet started accepting TERS applications for the month of May. They have requested that applicants continue to revisit the website until applications for May become live.

We have received a few queries from employers asking if they may make additional payments to employees after receiving their TERS benefit payouts. Based on our understanding of the scheme as well as other reputable sources, it seems that, not only is this not allowed, but could in fact amount to fraud.

When submitting the TERS application, employers are expected to complete the Leave income during shutdown field with the amount anticipated to be paid to each employee by the company, over and above the TERS payout. The reason for this is that it is taken into consideration in calculating the payout per employee – employers who are able to pay their employees a portion of usual income should do so and will then likely get lower payouts than those employers with zero cash flow.

Failing to accurately declare these amounts and / or subsequently paying additional amounts to employees, could result in employers / employees receiving an “overpayment” from TERS, which in turn amounts to fraud. This opens employers up to potential penalties and legal action.

The South African Institute for Chartered Accountants (SAICA) has recently released a very helpful publication which provides additional information and clarity on the above. The information it contains aligns with information received from the UIF and other stakeholders and we strongly recommend that if you are participating in TERS that you read it  to ensure that you are applying the scheme correctly.

35% PAYE Deferment Update

The number of businesses which can defer the payment of 35% of their PAYE liability without any penalties or interest has increased. The annual turnover threshold has been increased from R50 million to R100 million, increasing the number of businesses that can benefit from this short term cash flow relief.

Businesses with a turnover in excess of R100 million can also apply for this relief, which applications will be dealt with on a case by case basis. The business must prove that it was materially negatively affected by the lockdown, which appears a very ambiguous statement. We are hoping for additional clarity in the coming days.

More information on this can be found on our second lockdown recap blog here.

Delay in Tourism Relief Fund Payouts

The Department for Tourism has delayed the release of funding it has allocated to companies based in the tourism sector, due to a legal challenge. It is awaiting the verdict to be handed down upon whether it is deemed racially discriminatory, that applicants to the fund must be BEE compliant to qualify.

The final verdict shall be released in the next few days, after which it will become apparent whether the allocation of funds can remain, or whether they need to be re-examined.

Annuity Funds

In the  SARS draft explanatory note for the approaching amended bill, a new proposal has been made with regards to helping individuals receiving monies from living annuity funds. This is not directly relevant to payroll, but may assist you during the lockdown period.

There have been changes proposed to the amount of an individual’s annuity fund which can be withdrawn, resulting in added flexibility. Rather than having to wait for the anniversary date of the annuity, it is proposed that for the 4 months between May and August the amounts withdrawn can be altered. This can benefit individuals in two ways:

  1. The heightened band (17.5-20%), increases the amount of money that can be withdrawn, meaning that individuals who need immediate cash flow can gain access to it, by increasing their periodic withdrawal.
  2. The lower band (0.5-2.5%), allows individuals to delay the sale of investments in shares which have underperformed, till a more opportune time.

We hope that this information proves useful to you. If you have any queries on how the above relates to payroll and the SimplePay system, please feel free to get in touch with our customer support team at [email protected].

Keep well. Stay home. Stay safe.

Team SimplePay

Lockdown Update – 28 April

The Minister for Finance’s speech on 23 April reiterated much of the information laid out in the President’s speech on 21 April, outlining the size of the budget as well as the 4 key components to counter the pandemic. 

Despite the fact that not all of the components directly link to supporting businesses, they are useful to show how the Government is allocating the funding and give a clearer picture for the near future. We’ve covered each of these below, starting with the measures most relevant to you, your businesses and your employees.

1. Support for Companies and Workers

In a nutshell, these are the schemes mentioned in the speech:

  1. An increase in the expanded Employment Tax Incentive (ETI) amount from R500 to R750 per employee. 
  2. A skills development levy holiday of 4 months from 1 May to 31 August  2020. This will work by the EMP201 SDL contribution defaulting to zero for these months. We are awaiting clarity on the proposed changes, so we can accommodate this on our system.
  3. Fast-tracking VAT refunds. 
  4. Deferring the payment of excise duty on alcoholic beverages and tobacco products.
  5. A three-month deferral for filing and first payment of carbon tax liabilities to 31 October 2020.
  6. A postponement of some of the corporate tax proposals in this year’s Budget on interest expenses and assessed losses.
  7. An increase in the deferment of employee’s tax.
  8. An increase in the turnover threshold for automatic deferrals.
  9. Donations to the Solidarity Fund can offset your tax liability. Up to a third of such donations will be tax deductible. The limits for payroll giving to the Solidarity Fund shall be increased – including in determining the monthly withholding of employees’ tax.
  10. Finally, access to living annuity funds have been expanded by allowing individual to adjust the proportion they receive as annuity income, instead of waiting up to one year until their next contract anniversary date.

We are awaiting further guidance on different aspects of this list and will make any necessary changes to the system, as well as provide updates as soon as possible.

Several of the above points are reiterations of schemes which we have outlined in previous blogs, including our first and second recap blogs. There are one or 2 points that stand out from the list, such as the increase in ETI to R750 per employee and access to living annuity funds. 

It is not yet clear whether this increase in ETI is meant to be implemented from 1 April or 1 May, the latter being the more logical. We are in touch with the relevant stakeholders to ensure that we have the most up to date information possible. We shall update you as and when we know more, as well as when the necessary changes have been implemented in SimplePay.

Further support for businesses is provided in the COVID-19 loan guarantee scheme. This was mentioned in the 23 April update blog, and will assist businesses with a turnover of less than R300 million, with operational costs such as salaries. The core feature of the loan is that repayment of interest and capital starts after 6 months, with a maximum of 60 months to pay off the loan in full.

The National Treasury will be working with private banks and the South African Reserve Bank (SARB) to facilitate this scheme. More information on the scheme can be found on the National Treasury website and in their dedicated PDF, linked here. It is expected that the first banks should be ready to accommodate this scheme before the end of the month.

2. Extraordinary Health Budget

The Government is setting aside an amount of R20 billion, directed at aiding efforts with dealing with the pandemic. 

3. Relief of Hunger and Social Distress

Several different measures have been put in place to address this heading, as the lockdown has so drastically affected those living from hand to mouth.

R50 billion has been directed toward relieving those who are desperately affected by COVID-19. This will be utilised in the following ways:

  1. COVID-19 Relief of Distress Grant will pay R350 per month for 6 months, to individuals that are unemployed and do not receive any other form of social grant or UIF. More information can be found on the Department for Social Development website, linked here.
  2. Child Support Grant beneficiaries will receive an extra R300 in May.
  3. From June to October, caregivers will get an additional R500 per month. All other grants will be topped up by R250. 

4. Phased Re-Opening of the Economy

Under this final heading, Mr Mboweni focused on the need for screening and testing of individuals going back to work, with an overall cautious tone. Where risks do re-emerge, localised lockdowns will be put back in place.

Under this heading, three key phases are being put in place for the coming month, aiming to balance the protection of lives with an economically sustainable future:

  • Phase 1 – This is the current phase, which is aimed at preserving the economy. This comes in the form of immediate, targeted and temporary fiscal responses.
  • Phase 2 – This phase plans the recovery from the immediate effects of the crisis. Further detail of this step is still to be given.
  • Phase 3 – This phase implements a “pivot”, where the economy shall be positioned to encourage higher rates of growth.

All in all, the speech although providing more detail on many aspects of the President’s speech on 21 April, also leaves many questions unanswered. We shall endeavour to tie up these ends as this information becomes available, which for many hopefully will be upon the release of the amended Disaster Management Act (DMA) Bill on 30 April.

We hope that this information proves useful to you. If you have any queries on how the above relates to payroll and the SimplePay system, please feel free to get in touch with our customer support team at [email protected].

Keep well. Stay home. Stay safe.

Team SimplePay

Lockdown Update – 24 April

Since yesterday’s blog, we have a few updates on the distribution of TERS funds and a means to track applications.

Additionally, changes have been made so that some employers who were previously unable to apply for TERS, are now eligible.

TERS – Employee Fund Distribution

Update 7 May: The Department for Employment and Labour has not yet started accepting TERS applications for the month of May. They have requested that applicants continue to revisit the website until applications for May become live.

As of last week, TERS payments have started to be distributed to employers to support their employees, however there has been no accompanying instruction on how this is to be distributed. This has made it impossible for the employer to correctly pay their employees the amounts due.

We have been informed that, for employers who have already received the funding, TERS will either issue, or make available a reconciliation report to instruct the employers on how to distribute the funds to their employees. For those still awaiting payment, a reconciliation report will be provided alongside payment, allowing for the correct amounts to be paid to employees.

TERS Access to Employers not Registered for UIF Benefit

Many employers are registered with SARS for UIF payment purposes, but have never signed up with the UIF. As TERS benefit claims require a UI Registration number, some employers have been unable to apply for TERS benefits. SARS is now assisting the UIF with registering all SARS-registered employers with the UIF. 

Once this is completed, the newly registered employer can submit back-dated declarations as far as possible, facilitating them in claiming the TERS benefit.

TERS Application Tracker

A useful tool to look out for if you are waiting to hear back from a submitted TERS application, is the new tracking functionality on the Department of Employment and Labour website. 

To track your application, you need to login at https://uifecc.labour.gov.za/covid19/.

EMP201 Tax Liability Deferrals

To reiterate a point made in our Lockdown Recap #2 Blog, to claim the 35% deferment correctly, you must submit your EMP201 to SARS with the full liability recorded. SARS themselves will deduct the relevant amount to provide you with the amount due. You do not need to do anything on your end to benefit from the deferment.

TERS Benefit Payout

We are happy to announce that we have created a new system item to accommodate the payment of the TERS benefit to employees. More information can be found on our blog here.

Today, we had hoped to bring you more from the relevant Ministers of the subjects laid out in the President’s speech this past Tuesday. Unfortunately, the Government delayed the release of the speech by Finance Minister, Tito Mboweni. We shall bring this information to you next week.

If you have any questions about this above blog, please feel free to get into contact with us at [email protected].

Keep well. Stay home. Stay safe.

Team SimplePay

New System Item: TERS Benefit Payout

As part of our commitment to supporting you during these uncertain times by simplifying payroll, we have introduced a new system item: TERS Payout. To recap, TERS is a COVID-19 relief measure introduced by government which provides employers with cashflow to continue to pay employees. You can find a more in-depth recap on TERS here.

The employer acts as the conduit for these payments and therefore the payments should not attract PAYE, UIF or SDL. They are also not reported on IRP5s. Employers that have already finalised payslips and made payments to employees were advised to create a custom reimbursement item for these payments. To save you time and to minimise any potential stress associated with setting the payslip item up incorrectly, we have created a system item for these payments.

To add the system item to an individual employee’s payslip:

  • Go to the employee’s profile
  • Click on Add next to Payslip Inputs
  • Select TERS Payout under Other
  • Enter the amount that needs to be paid to the employee
  • Click Save

To bulk add the system item to the payslips of employees:

  • Go to Employees > Bulk Actions > Payslip Inputs
  • Use the filters to select the relevant pay frequency, payslip date and pay point
  • Then use the filters to select TERS Payout under Other
  • Click on the checkbox next to an employee’s name to add the item to their payslip*
  • Enter the amount for each employee*
  • Then click Save under the filters to save your changes.

*Remember, you can click on the dropdown arrow next to the heading and then select Copy first value down to apply the first employee’s entry to all employees in a faster manner.

We hope that this small action taken by SimplePay to assist you during this period makes a big difference.

Team SimplePay

Lockdown Update – 23 April

TERS Application and Payouts Update

Update 7 May: The Department for Employment and Labour has not yet started accepting TERS applications for the month of May. They have requested that applicants continue to revisit the website until applications for May become live.

Update 28 April: We have updated our system to populate the Employment End Date in the TERS CSV file.

Update 24 April: Further clarification on the TERS CSV dates has been provided. The TERS benefit shall be accounted for individually on payslips, as it is not subject to PAYE, SDL or UIF. We are updating our system accordingly.

TERS Payouts

We have just received confirmation that employers are simply acting as conduits for these payments, which means that there is no PAYE, SDL or UIF levied and they are not reported on IRP5s. With this in mind, we are looking at updating the system to accommodate the payments and will provide an update ASAP.

In the interim, you can create a custom reimbursement item for this, otherwise if you can wait a bit longer, we’ll be adding a once-off system item for you to use for these payments. As always, we would recommend contacting the TERS hotline (012 337 1997) if you are at all unsure.

TERS CSV Dates

Update 28 April: We have updated our system to populate the Employment End Date in the TERS CSV file.

The employment end date is in fact required in the CSV (despite us being told otherwise), but only if the employee had their service terminated so we are updating it ASAP. You can enter this manually before downloading and make use of the “copy down” option if the dates are the same for all employees, which they likely are.

President Ramaphosa’s Speech on Additional Economic Relief Measures

On Tuesday 21 April, President Ramaphosa once again took centre stage to address the nation on how the Government is continuing in its efforts to protect lives and support the economy.

Going forward, social relief and economic support shall be guided by these 4 pillars:

  1. An extraordinary health budget to respond to the coronavirus
  2. The relief of hunger and social distress
  3. Providing further support for companies and workers
  4. A phased re-opening of the economy

From the speech can be extracted several points of interest for businesses to look out for in the coming week, as they are released by the relevant Ministers this Friday (hopefully providing the necessary details on items such as the SDL payment holiday). In this blog we shall summarise these points.

Reprioritisation of the COVID-19 budget

A new budget of R500 billion is to be laid out. Of this, R130 billion is provided for by the current budget, with the shortfall being raised by local resources, global partners and international finance institutions.

This is spread across both social and economic support measures.

Preservation and creation of jobs

In his speech, President Ramaphosa has pledged a further R100 billion for protection and creation of jobs. Some of the measures mentioned in the speech include supporting workers wages and assisting companies in distress.

Directly addressing UIF, the President stated that R40 billion will be set aside for workers whose employers cannot afford to pay them.

Support for SMMEs

A further R2 billion has been pledged to support SMMEs and spaza shops, likely in the form of debt restructuring, loans and grants.

Loan Guarantee Scheme

In order to assist enterprises with their operational costs, such as salaries, rent and payment of suppliers, the Government in partnership with major banks, the treasury and the South African Reserve Bank is introducing a R200 billion loan guarantee scheme.

Initially, companies with a turnover of less than R300 million will be able to apply for a loan. 

SDL Contribution, VAT Refunds and Carbon Tax

In addition to the existing tax relief measures, the Government is introducing a 4-month Skill Development Levy (SDL) contribution holiday. 

We are currently looking at the best option from a system perspective and will provide updates and guidance via the system and blog ASAP. We will also make sure to do this and make any changes (if necessary) in time for the submission of April’s EMP201 by 7 May.

Additionally VAT refunds are being fast tracked to return capital to businesses, and a 3 month delay for filing and first payment of carbon tax has been announced.

Expansion of EMP201 Tax Deferment Scheme

To assist a greater number of businesses, the threshold for turnover to qualify for the tax deferral has increased to R100 million and the amount that can be deferred has been increased to 35%. 

Companies with a turnover of greater than R100 Million can apply directly to SARS to defer their PAYE contributions.

As mentioned in our previous blog, you should complete your pay runs as per normal, you do not need to do anything special on SimplePay to gain the 35% PAYE liability deferment through your EMP201 submission.

More information on this scheme can be found in our Week 2 recap blog

Tax Deduction for Taxpayers Who Donate to the Solidarity Fund

It was also announced that taxpayers who donate to the Solidarity Fund will be able to claim up to an additional 10% tax deduction from their taxable income.

If you would like to read more about the social measures being put into place by the Government, a copy of the President’s speech can be found here.

Thursday 23 April, the President will address the nation again, looking forward beyond lockdown, at the measures that will be implemented to reopen the economy.

In the meantime, we will keep you posted when further detail of the above is released on Friday 24 April.

Should you have any queries over the content or processes to follow within this blog, please feel free to contact our support team via [email protected]

Keep well. Stay home. Stay safe.

Team SimplePay

Form UI-2.7 for Employees Terminated with Codes 9, 10, 17, 18 or 19

We recently introduced the functionality to download pre-populated individual UI-19 forms for employees so that you do not need to manually complete these. We have now expanded this functionality to generate UI-2.7 forms alongside individual UI-19 forms. These are applicable to employees that remain employed with the company, but are terminated on the system using the following UIF status codes:

  • 9 – Maternity
  • 9 – Adoption 
  • 10 – Long-term leave due to illness
  • 17 – Reduced Working Time
  • 18 – Commissioning Parental
  • 19 – Parental

When selecting one of these codes, two additional fields will appear:

Expected return date: This is the date that you expect the employee to return to work. It is imperative that this is completed correctly, as it is used to generate the UI-2.7 form. If the employee’s date of return is later extended, you will need to update it here in order to update the UI-2.7 form.

Paid During Temporary Absence: If you select this checkbox, the system will still generate payslips during the employee’s period of absence, and no UI-2.7 form will be available. If you do not select this checkbox, no payslips will be generated for the employee during their period of absence and a UI-2.7 form will be generated for the employee. 

To download the UI-2.7 form generated by SimplePay:

  • Go to the employee’s profile after ending their service.
  • Click on Manage End of Service.
  • Click on the PDF icon under Service Period History.

The first page of the PDF document will be your UI-19 form and the second page is the UI-2.7 form.

For more information on ending an employee’s service, visit our help site here.

Team SimplePay

Update to TERS Application Channel

Over the past few weeks we have made multiple mentions of how employers should apply by email for the COVID-19 Temporary Employer-Employee Relief Scheme (TERS) benefit. We received an update today, 16 April, that this method of application is no longer available. 

Employers should now make use of a new online method on the Department of Employment and Labour website.

Through this new application process, employers will still be able to submit the same CSV file generated by SimplePay, which was previously used when applying via email. More information on downloading this CSV file can be found on our COVID-19 TERS CSV Export Help page.

Please note: We are currently waiting on feedback about an error with this new online application when the CSV file doesn’t contain the employee’s Termination Date. It would be best to wait a few days before making use of this online application process whilst any errors are being corrected with their system.

Should you have any queries over the content or processes to follow within this blog, please feel free to contact our support team via [email protected]

If your question is related to a step within the application process, or an error that has occurred within the process, we would encourage you to follow this up on the TERS hotline, on 012 337 1997.

Keep well. Stay home. Stay safe.

Team SimplePay

Lockdown Recap #2

Update 23 April: We have received word that the termination date is in fact needed in the CSV (after being told to leave it out) and are doing the update as a top priority. In the meantime you can populate the termination date field before downloading the CSV and use our “copy down” functionality if the date is the same for all employees. We have received confirmation that the TERS benefit paid by employers to their employees will not be subject to PAYE, SDL or UIF. You may pay this amount off-system if you choose, but we recommend waiting until we have updated our system to include a new TERS benefit item. We will send out a notification when the system has been updated.

Update 20 April: SimplePay has updated the TERS CSV export as per the Government’s latest changes. Foreign identification numbers will also be automatically included when generating the TERS CSV export.

It has been another busy period since our last recap blog, with the headline being President Ramaphosa’s announcement on the extension of the lockdown by 2 weeks to 30 April. This blog is aimed at building on the detailed content already provided in our week 1 recap blog. Below you will find a chronological summary of changes that have occurred since the mentioned recap blog, as well as some clarifications on questions that have been asked by yourselves over this past week.

Changes between 6 and 14 April

6 April: Procedure to follow for the 20% Deferment of Tax 

Update 23 April: The amouunt of PAYE liability that can be deferred by employers has been increased to 35% from 20%

As outlined in the FAQ of our previous week 1 recap blog, you do not need to do anything to claim the deferment. You should complete your pay runs as per normal, you do not need to do anything special on SimplePay to gain the 20% PAYE liability deferment through your EMP201 submission. SARS has indicated that their systems have been updated so that when they process your submission, the relevant payment amount will be correctly calculated. They will then provide you with a statement of account for the reduced amount due.

Should you wish to do a manual calculation and subtract the 20% yourself, this is also an accepted means of payment. In light of the above and in order to focus our capacity on crucial COVID-19 and other system updates, we have decided not to update our EMP201s to accommodate the deferment.

Should you have any further questions on the deferment, please contact SARS for assistance on 0800 00 7277.

7 April: Temporary Employer-Employee Relief Scheme – TERS

Update 16 April: The email application is now obsolete. A new online application is now available. Read more here.

Last week on 7 April, the Department of labour changed the format of the CSV Export file and application process. This meant that the added CSV export functionality which we provided had to be altered in order to match the new layout. 

We are glad to inform you that this functionality is live and further information can be found in the TERS blog post here. Please note that if you export the CSV file using SimplePay, the corresponding excel spreadsheet attached to the email does not need to be completed.

We should mention to you that our advice from the previous blogs still remains, i.e. to apply, send an email to [email protected]. You should then receive an automated response containing the requirements and process to follow.

Should you have any questions surrounding anything to do with TERS we would recommend you contact them at [email protected].

TERS FAQs

How can foreign identification numbers that are not reflected on the CSV Export template be added? 

Update 20 April: SimplePay has been updated to now automatically include foreign identification numbers in the TERS CSV export.

This has come to our attention, so we are busy updating our system to allow for foreign identification numbers to be automatically included. 

We recommend that you wait to export the CSV template until our update has been implemented. Otherwise, it will be necessary to manually edit the CSV file.

Where can I find the UIF Reference number, referred to in the CSV Export?

The UIF reference number which should be captured, is the one provided by the Department of Labour and not the one provided by SARS. 

What is the status of the CSV export functionality in light of the most recent changes from the Department of Labour?

Update 20 April: SimplePay has been updated to cater for the below changes.  

We are busy implementing the Government’s latest updates to the TERS CSV export. We’d recommend waiting but if you’d like to proceed without our updates, please ensure you edit the export as follows: (1) add the “/” back into the UIF number after the 7th digit (e.g. “1234567/8”) and (2) update the “Shutdown to” date to 2020-04-30.

9 April: New Tourism  and Industrial Sectors Support Blog

At the end of last week we released the latest in our collection of support for business blogs. If you haven’t seen it already, please see our Support for the Tourism and Industrial Sector Blog here.

14 April: COVID-19 Employer Tax Incentive (ETI)

In our previous blog on the COVID-19 ETI scheme found here, we stated that we will complete the required updates so that employers can benefit from this scheme. We are still in the process of updating our system and shall let you know as soon as the update is live.

14 April: Further Reduction in Interest Rates

On 14 April, the South African Reserve Bank (SARB) announced a further reduction in the interest rate by 100 basis points (1%). This means that the official interest rate for employer loans now stands at 5.25% per annum.

The system has now been updated and is taking this into account for the calculation of fringe benefits on employee loans.

17 April: Employer Annual Reconciliation filing Open

SARS has announced that the 2019/20 employer annual reconciliation filing season is to run from 15 April to 31 May.

We have been flat out to try and facilitate COVID-19 relief for you all, which has meant that we are not quite done with our filing preparation and data checks, which are needed to allow smooth filing.

We are hoping to have the system ready for filing for you by early next week. As luck would have it SARS has announced that the system will be down for maintenance on Friday, 17 April, between 15:30 and 21:00. We therefore would advise that you take the weekend off, so that you can return next week energised for filing!

Other FAQs

UIF FAQs

Update 21 April: The Department of Employment and Labour has opened a dedicated UIF toll free hotline, running 8am – 10pm Monday to Friday. The number is 0800 030 007.

How do I pay my UIF contribution if the Department of Labour call centres are closed?

Despite both the labour centres and call centres being closed, this does not necessarily mean that the entire Department of Labour is closed. Therefore if you normally pay your taxes in one of these ways, we recommend that you reach out to the Department of Labour at [email protected].

We hope this has helped summarise the past week for you as well as clarify some of your questions.

Keep well. Stay home. Stay safe.

Team SimplePay

Support for the Tourism and Industrial Sectors

Update 14 April: Further information on the application process for the Tourism Relief Fund

Support for Tourism Industry

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we may also notify you of these by email and system notifications.

In light of the constraints put upon the tourism and hospitality sectors in order to flatten the curve of the spread of COVID-19, the Department for Tourism has been granted an additional R200 million to assist Small, Medium and Micro-sized Enterprises (SMMEs) in these sectors. This relief is provided in addition to the other support opportunities that non tourism specific SMMEs can take advantage of. Details of general SMME relief schemes can be found in our previous blog on Support for Businesses.

The Tourism Relief Fund will be allocated to SMMEs across all 9 provinces and various tourism sub-sectors, providing a once off grant of up to R50,000 per company. To be considered, an application must be submitted by 31 May 2020. A degree of preference will be given in favour of rural areas, townships, women, young people and people with disabilities.

Funding will be balanced between both businesses which are supported by programs, such as the tourism incentive program, and businesses that are not benefiting from any programs. This will be done via the prospective application process.

Businesses can apply if they fall into one of the following categories:

  • Accommodation: Hotels; Resort properties and Bed and Breakfast (B&B’s)
  • Hospitality and Related Services: Restaurants (not attached to hotels); Conference (not attached to hotels), Professional catering; Attractions
  • Travel and Related Services: Tour operators; Travel agents; Tourist guides; Car rental companies; and Coach Operators.

Qualifying Criteria

In order to be eligible to apply for funding, the following criteria must be met:

  • Formally registered business with Companies and Intellectual Property Commission (CIPC).
  • Turnover must be below R2.5 million per year.
  • Have a valid tax clearance certificate or PIN.
  • Proof of minimum wage compliance.
  • Provide proof of UIF registration for employees employed by the business.
  • Be an existing tourism-specific establishment as outlined in the scope of application; this being falling within the sub-sectors of Accommodation Establishments, Hospitality and Travel Related services, as mentioned above (suppliers and intermediaries are not eligible).
  • Must be in existence for at least one business financial year.
  • Prove that the relief is required as a result of the impact of COVID-19.
  • Must submit statements of financial position; this can be done via balance sheet, income statements, cash flow statements.
  • 6 months’ bank statements need to be submitted.
  • Indicate the intended use of the grant.

How to Apply

The application process can be done by following the following steps:

  1. Go to www.tourism.gov.za
  2. Either complete the application form on the website, or download the application form and complete it. *Every section of the application form must be completed in order to be considered.
  3. If you have completed the application online, you must provide send the supporting documents via email; or alternatively if you have downloaded the application form, send this along with the specified documents to [email protected]
  4. You will receive an automated response

Required Documentation

Alongside the application form, here is a list from 14 April of documents required:

  • Registrations certificate issued by CIPC
  • Certified ID copies of the Directors/Members
  • 6 months banks statements
  • Latest annual financial statements – income, cash flow and financial position
  • Business profile, being 2-5 pages maximum
  • Relevant industry certification – depending on business focus area
  • Latest UIF/U-filing contribution certificate
  • Tax clearance certificate or pin
  • Proof of compliance with minimum wage requirements
  • Grading certificate or proof of application to be graded
  • Certificate of B-BEE or Affidavit
  • Proof of UIF registration for employees employed by the business
  • Medical certificate for persons with disabilities where applicable

Upon submission, the Department of Tourism aims to process each application within 30 working days and successful applications should receive funds within 7 working days after approval. This relief is only available to South African citizens. 

Should you have any further queries there is a dedicated line provided by the Tourism Services call centre on 0860 868747. Additional information can also be found on the Department for Tourism web page, or the South African Tourism site.

Support for Industrial Sector Businesses

IDC COVID-19 Essential Supplies Intervention

In Ebrahim Patel’s speech on behalf of the Department of Trade, Industry and Competition, he mentioned a package of more than R3 million to help aid the industrial sector. This package, put together by the Industrial Development Corporation (IDC) is aimed at addressing the situation of vulnerable firms and to fast-track financing for companies critical to the efforts to fight the virus and its economic impact.

If your company has been effected in one of the following ways, you could apply for funding:

  • Supply chain interruptions ​
  • Access to raw materials – cost and quality ​
  • Access to markets – perishable products lost in transit due to longer delivery periods​
  • Working capital disruptions – longer lead times ​
  • Market loss – e.g. export markets constrained by logistics or replaced by production
  • Surge of imports to address the spike in demand​
  • Underperforming budgets – impact of extended downtime ​
  • Reduced Productivity – employees wellbeing: physical and psychological ​

Applications can be made on the IDC website and the qualifying criteria and documents required can be found within this document.

Working Capital Support

R700 million has been earmarked to suppliers of identified critical goods that are affected by the outbreak of COVID-19. Funding will be provided to companies for the acquisition and/or manufacturing of essential supplies on an urgent basis. A list of the relevant supplies to date is listed here for ease of reference:

  • Bulk supplies of disinfectants and sanitizers;
  • Accredited masks;
  • Accredited test-kits;
  • Medical Gloves;
  • Packaging (bottles, caps, pumps, sachets etc);
  • Sanitisers (hand or industrial);
  • Toilet Paper, Wipes, Tissue Paper, Sanitary Pads;
  • Cleaning materials;
  • Chemicals;
  • Approved drugs;
  • Ventilators and filters;
  • Nebulisers and nebulising agents;
  • Hospital beds;
  • Oxygen;
  • Aprons;
  • Safety Visors;
  • Raw materials to manufacture essential products;
  • Urgent regulatory and compliance testing of products or treatments if required.
  • Products for care of babies and toddlers;
  •   Personal toiletries, including haircare, body and face wash, roll-ons, deodorants, toothpaste

Even if the items your company produces is not on the list, it may be in the future as the list is constantly being updated. Alternatively, if your company has a track record of making comparable products, then you may still be able to secure funding, provided that your company is capable of delivering on the contract in terms of capacity, resources and experience.

As above, the application can be made on the IDC website and the Qualifying criteria and documents required can be found within this document.

A useful page for sector specific support, post investment support and the IDC’s corporate social investments can be found here

What Funding is Available?

There are various forms of funding available under the scheme, but each is limited to a 3 month term. Examples of the instruments available include:

  • Short term loan for once off- contract or import funding
  • Revolving Credit Facility
  • Guarantees to banks for banking facilities, imports, ordering requirements

IDC loans are made at a rate of prime +1% and Manufacturing Competitiveness Enhancement Program (MCEP) loans are available at prime +2.5%. Guarantees are made at a flat rate of 2%.

To reiterate, applications can be made on the IDC website, here.

NOTE: You may find it useful to reach out to the incentives you believe may be relevant to you, as listed in this document. They will likely be able to give further guidance on your applicability for the various schemes available.

Keep well. Stay home. Stay safe.

Team SimplePay