EMP501 Reconciliation to Reflect 2020 SDL Holiday

Background

As part of the government’s efforts to assist the cash flow of employers during the initial 2020 Covid-19 lockdown months, provisions were added to the Disaster Management Tax Act to relax payment of SDL to SARS for the period of 1 May 2020 to 31 August 2020 (the “affected months”).

SimplePay followed the guidelines from government, which stated that the correct way to record this payment holiday would be by replacing the 1% percentage in the SDL calculation by 0% on the monthly EMP201’s as a temporary change for the 4-month period. We also followed this change through to our bi-annual filing documents (EMP501 and tax certificates).

Declaration to Reflect SDL Holiday

With filing season open, SARS have identified that some employers are submitting EMP501’s and tax certificates with SDL recorded for the relief period, when it should be nil. As a result, the reconciliation process automatically flags SDL as payable for those months and thus overdue, which then results in interest and late payment penalties being incorrectly levied against the employer.

Last week, we notified you that SARS has flagged this issue and has requested that employers double check their SDL figures when completing the reconciliation. Although we were confident that this would not be an issue for most of our customers, we chose to pass the notice on, to cater for any customers who do not make use of the filing documents generated by SimplePay (e.g. those who outsource submissions).

We apologise for any concern that this notification may have caused. Our development team have run additional tests on customer data and we would like to assure you that the SDL is recorded correctly on the EMP501 and tax certificates generated by SimplePay.

You can confirm this by opening the PDF version of your EMP501, where you’ll see the SDL values for May to August as zero under the SDL heading.

Credit for Payments Made

If, despite the correct declaration of 0%, you in fact paid the SDL to SARS for the affected months, the SDL amount paid will be indicated as an unallocated credit on your statement of account. The SDL for this period will again be declared as 0% on your 2021 EMP501 reconciliation as well as the IRP5/IT3(a) certificates.


If you have any questions on any of the information provided in this blog and how it further relates to SimplePay, you can contact us at [email protected] 

Keep well and stay safe.

Team SimplePay

Submission Channel Consistency Requested for 2021 Employers Filing Season

In a previous blog post, we discussed the opening of the 2021 employers filing season which runs from 1 April to 31 May 2021 and many employers should now have submitted or be in the process of finalising their filing for 2021.

An important point to note concerning your filing is that SARS requires that employers be consistent in the submission channel used to submit their EMP501 reconciliation and tax certificates for a particular filing period. For example, where an employer submitted their EMP501 reconciliation through SARS eFiling for the August 2020 interim submissions, the employer must not revise their first submission through SARS [email protected], or vice versa. 

Error Reports

As part of the filing process, SARS will recalculate the PAYE and SDL payable for each employee from the amounts which are reported on the submitted tax certificate. 

SARS will then compare the amounts they calculated against the PAYE and SDL amounts that are stated on that tax certificate where there are any significant differences between the two amounts, SARS will issue an error report with details of the tax certificates that have differences.

These error reports will be sent via the same channel that the employer used to submit the EMP501 and the tax certificates. For example, where an employer has submitted their EMP501 reconciliation through SARS eFiling, the error report will be sent to them via the SARS eFiling portal only and will not be accessible via other means.

Re-submission of Tax Certificates

In line with the above principle, corrections to the certificates must only be resubmitted using the same channel that was used for the initial filing.

Changing Submission Channels

You will have the option to use a different submission channel for the next filing period but must again be consistent during that filing period in making use of the same channel for any resubmissions.


If you have any questions on how the information provided in this blog relates to SimplePay, you can contact us at [email protected] 

Keep well and stay safe.

Team SimplePay

TERS Phase 2: Non-Sectoral Claim Applications

In our previous blog post covering the COVID-19 TERS initiative, we introduced Phase 2 of the initiative and discussed the requirements for making an application for relief on behalf of an employee for the first period, under Claim Code 1. In today’s blog post, we will cover the process relating to claims under the remaining codes (2, 3 and 4), for which applications officially opens on 13 April 2021.

One of the notable highlights of the State of the Nation address earlier this year was the announcement of the extension of the COVID-19 TERS relief scheme from 16 October 2020 to 15 March 2021. This ‘Phase 2’ of the COVID-19 TERS relief scheme is split into two payment iterations which will focus on claims based on loss of income during two specific periods. 

  • The first period is between 16 October to 31 December 2020; and
  • The second period is between 1 January to 15 March 2021. 

Only claims for the first period are currently being accepted by the UIF and claims relating to the second period will be dealt with at a later date.

New Verification Requirements Added

In order to claim for an employee falling under Claim Code 2, 3 or 4 the TERS online portal will require you to complete a new two step verification process. A detailed explanation of each of these codes can be found here.

The verification process revolves around the requirements set out in the guideline on the submission of COVID-19 related health data from workplaces to the National Institute for Occupational Health (NIOH), which places the legal obligation on all employers to collect and report data on certain categories of employees to the NIOH. The UIF have decided to use the registration and submission of this data to the NIOH by the employer as a means of verification for the processing of non-sector based claims.

Employers who are not registered with the NIOH will be unable to proceed with a claim under Claim Code 2, 3 or 4..

To register with the NIOH you are directed to visit their website to complete the registration and employee declaration. At least 4 days should be allowed between receipt of your Business ID, upon successful registration, and returning to the TERS portal to lodge a claim.

Claim Process

  1. All claims will be lodged via the UIF online portal and, irrespective of claim code, you will be required to upload the following documents:
  • Signed approval / acceptance letter;
  • Bank Confirmation Letter (current);
  • Proof of payment to employees for previous benefits claimed & received for the prior period (e.g. EFT, payroll report, pay recon);
  • Refund to the UIF (if applicable); and
  • Letter of authority

(these are the same documents required for previous TERS applications)

  1. If you intend making a claim on behalf of an employee falling under Claim Code 2, 3 or 4 you will be required to complete the two step verification process:

Step 1: Verification of Employer Registration with NIOH

You will be asked to confirm (via dropdown) your registration with the NIOH and also that you have declared your affected employees.

Step 2: Verification of Employee Declaration with NIOH

You will be required to individually capture the details of each affected employee, whose ID/Passport/Asylum seeker number will be verified against those in the NIOH database.

Important Areas to Note When Applying

Lockdown Period

Benefits will be calculated by the amount of days claimed within the designated lockdown period, which is from 16 October 2020 to 31 December 2020. Any dates which do not fall within this range will not be accepted.

Monthly Salary

Regardless of the lockdown period being claimed (even if for the full two-and-a-half months’ lockdown period) you must only enter the normal monthly salary for the employee. DO NOT alter/extrapolate this value to meet the cumulative lockdown period.

Remuneration earned for hours worked (excluding leave income and advance)

Unlike monthly salary, this column must reflect the full lockdown period’s cumulative remuneration. The remuneration earned for the entire period must be stated but all advances, ex gratia payments, or income related to annual or other leave must be excluded.


Although Phase 2 of the COVID-19 TERS initiative is seen as an extension of the previous relief program, it is important to note the key differences in Phase 2 relating to who the benefit is actually aimed at. Each specified Claim Code has its own identifying factors and criteria which must be strictly adhered to. This undoubtedly limits the applicability of the initiative this time around and greatly reduces the potential beneficiaries of the relief.  

The UIF can be contacted directly on 0800 030 007 for general queries on this issue as well as the lodging of disputes relating to an application. Greater detail on the process can also be found in the UIF’s correspondence sent to employers. 

If you have any questions on how the information provided in this blog relates to SimplePay, you can contact us at [email protected] 

Keep well and stay safe.

Team SimplePay