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