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

2021 Employer Annual Reconciliation Filing Season

The 2021 Employer Annual Reconciliation filing season will soon be opening on 1 April 2021. You have until 31 May 2021 to submit your Annual Reconciliation Declaration (EMP501) for the period 1 March 2020 – 28 February 2021 to SARS.

SARS has warned that late submissions will result in a penalty of 1% of total annual PAYE being levied each month after May 2021 until the EMP501 is submitted (up to a maximum of 10%). This principle will no doubt be a permanent feature for the future and we can expect it to be applied to the August 2021 mid-year tax certificate submissions too. In addition, please remember that any employer who wilfully or negligently fails to submit a return to SARS is guilty of an offence and is liable, upon conviction, to a fine or to imprisonment for a period of up to two years. This applies to EMP201’s as well as EMP501’s.

SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS. These are available under the Filing section of the sidebar menu. Submissions of your EMP501 can be done via eFiling (for less than 50 employees) or the [email protected] application. You may need to update your [email protected] application to the latest version, 7.1.0. 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]

Please always check the status of submissions to ensure their EMP501 has been successfully filed at SARS.

As always, please feel free to contact us at [email protected] if you have any questions.

Team SimplePay

ETI Refresher and Employer Reconciliation Recap

The calendar’s page has been turned over to November, which means that for the vast majority of you, the interim filing season is done and dusted! Our blog post today contains a refresher on ETI balances and the effect of tax periods on them, in addition to a polite reminder for any clients still to complete their filing.

Carrying Forward Unutilised ETI 

You may remember that as part of the Government’s response to COVID-19, ETI was adapted to increase both the number of eligible employees and the amount claimable per employee. Due to the scheme’s increased uptake, we thought it would be helpful to give you a brief refresher of some important points.

Under the rules that govern ETI, if your total ETI for a certain month is greater than your overall PAYE liability, you can have the balance rolled over to the following month(s). This roll-over is only allowed within any one six (6) month tax period – March to August and September to February, after which any unutilised ETI which you haven’t claimed as a payout from SARS is forfeited. As the extended COVID-19 ETI ran for the months of April to July 2020, these all fell within the last bi-annual filing period of March to August. Therefore, from August the usual roll over rules applied, meaning that any unutilised ETI is not rolled over, but should rather be claimed as a refund from SARS.

SARS has stated that despite the challenging circumstances brought about by the pandemic, these rules stand and that any ETI balance that you may have held will not be extended beyond the 31 August cut-off point. Despite this support measure no longer being available, we hope that the lesser restrictions means your business continues to regain a sure footing.

We’d also like to take this opportunity to remind you of the importance of correct and timely ETI submissions and claims, as the penalties for non-compliance can be severe. For more details, check out our ETI help pages.

Filing Reminder

Having gotten through another interim filing period, we hope that our continued endeavours to make payroll a breeze has made this filing season the smoothest yet for you! If you have not yet filed your EMP501 and IRP5 / IT3(a)s, the deadline was the end of October. We urge you to complete your filing as soon as possible, as the sooner you do this, the lesser the prospective penalty for late submission. If your EMP501 remains outstanding for several months, you could face a maximum penalty of 10% of the total amount of your employee’s tax deducted for the 2021 tax year.

If we can assist at all, please reach out to our support team who will assist you as best they can in resolving any issues you are facing with submission.

We hope that this information has proved useful to you. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course

Keep well and stay safe.

Team SimplePay

Filing Reminder and TERS Update

In the blog today we are writing to remind you about both the interim employer reconciliation and the individual income tax return deadlines, in addition to an update on COVID-19 TERS. Both of the filing submission periods are now open and we recommend that you complete your submissions in good time to avoid any complications.

Employer Interim Filing Season

This year the employer interim reconciliation submission period will run between 14 September and 31 October 2020. Within this period you will need to submit your EMP501 return and your employees’ IRP5 / IT3(a)s to consolidate the period between 1 March and 31 August.

As mentioned in our previous blog post, SimplePay automatically generates these forms from your previous submissions, with all the latest legislative changes taken account of. All you need to do is log onto [email protected] or eFiling and submit the required forms. It really is that easy!

Manual Individual Income Tax Return 

If you have already completed SARS new auto assessment process in August, as covered in this blog post, then you have already met your obligations and don’t need to do anything further. This reminder applies to you if you rejected or did not receive an auto assessment from SARS, but need to complete an individual income tax return.

If this is you, the submission period for individual income tax returns is between 1 September and 16 November 2020 if you are filing online. You can log into eFiling or the SARS Mobi App to complete your manual return.

COVID-19 TERS Update

The past few weeks have been challenging for the UIF with respect to COVID-19 TERS. The audit carried out showed a number of shortcomings in the validation steps for applications, which led to various misallocations of funds. As a result payments were halted on 11 September and access to the TERS portal was down over the past weekend to maintain and improve the process’s safeguards. The resumption of the payouts is yet to be announced, but we shall endeavour to let you know when this happens.

An additional point of note is that for those that meet the application requirements, TERS benefits have been extended to 15 September. The application deadline for this period is 30 October, after which no new applications will be accepted.

For all other application periods i.e. March to 15 August, the deadline for new applications is 17 September.

Update 16 September: The closing dates for new have been changed  as follows:

 New applications for March to end of May the deadline is now 25 September 2020. 

New applications for June the deadline is now 15 October 2020.

New Applications for July to 15 September the deadline is now 30 October 2020.

The media statements on the audit findings can be found here and the announcement of an extension to COVID-19 TERS can be found here.

We hope that this information has proved useful to you. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected]

Equally, If you are not yet a client of SimplePay but would like to be, why not try out our service on the house? You can sign up for your free 30-day trial here. Get to grips with our user-friendly service by reading our getting started page, or trying our free online course. Concerned about cost? Don’t be; we’ve simplified that too – check out our pricing page. Alternatively, you can request a formal quote if you need one here.

Keep well and stay safe.

Team SimplePay

Extension of PAYE Deferment and Interim Employer Filing Reminder

There has long been a question mark over whether the Government is going to extend the duration of the 35% PAYE deferment to support the ongoing challenges that businesses face. We had been waiting for the release of the Government gazette to confirm this, but as it is now 7 September we want to inform you of the possibility that your PAYE liability may be reduced on this month’s Statement of Account from SARS.

In the blog post today we’ll explain what this extension would mean and change, as well as providing you with a brief reminder of the upcoming employer interim reconciliation period.

35% PAYE Deferment Update

In addition to the Government’s announcement extending COVID-19 TERS (covered in this blog post), they are now also expected to extend the 35% PAYE deferment to include the month of August. This might mean when you complete your monthly filing today, the amount of PAYE you have to pay in your monthly EMP201 return may automatically be reduced by 35%. EMP201s should be generated and submitted as normal on SimplePay, with the full amount of liability stated, then SARS will reduce the amount owed by the corresponding amount.

The value of this additional month’s deferred payment will be added to the values of the previous months. The repayments for the deferred PAYE liability will be spread equally across 6 months, with the first payment being due on 7 October 2020 and the last on 5 March 2021.

Mention of the extension can be found on this SARS page, dated 28 August.

Employer Interim Reconciliation Reminder

The submission period for the 2020 / 2021 employer interim reconciliation period opens on 14 September. During the reconciliation period you need to submit your EMP501 return and employee IRP5 / IT3(a)s, consolidating the period of 1 March to 31 August 2020.

Staying true to our ongoing commitment to make your payroll obligations a breeze, SimplePay automatically generates these forms for you, with all the latest legislative changes already incorporated.

You can complete the filing process using eFiling if you have less than 50 employees, or alternatively with [email protected] for any number of employees. You might also be able to complete the process in branch by prior arrangement, but we would encourage you to use one of the online methods. More on [email protected] can be read on this page.

We hope that you have found the above information useful. If you have any questions on how the information above relates to SimplePay, please feel free to contact us at [email protected]  

If you are not yet a client of SimplePay but would like to be, Why not try out our service on the house? You can sign up for your free 30-day trial here. Get to grips with our user-friendly service by reading our getting started page, or trying our free online course. Concerned about cost? Don’t be; we’ve simplified that too – check out our pricing page. Alternatively, you can request a formal quote if you need one here.

Keep well and stay safe.

Team SimplePay

Interim Filing Season Now Open

The Interim Employer Reconciliation filing season with SARS is now open and ends on 31 October 2019. The interim reconciliation covers the six-month transaction period from 1 March to 31 August 2019, and the final annual reconciliation in April/May 2020 will cover the full tax year.

During the reconciliation process, you are required to submit an EMP501 return confirming or correcting the amounts declared for PAYE, SDL, UIF and ETI, as well as the payments made. This ensures that your EMP201 submissions are correct and up-to-date. In addition, failure to complete the interim reconciliation means that you will forfeit any ETI credits that have overrun in the first 6 months and will therefore not receive any payouts for this.

Remember that SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for bi-annual filing with SARS. SimplePay also automatically incorporates any new legislative changes, such as new codes or tax rules, simplifying the filing process for you.

The reconciliation process can be completed using [email protected] (recommended) , eFiling (for less than 50 tax certificates), or at a SARS branch (for less than 5 certificates). Version 6.9.7 of [email protected] was released today, 23 September 2019. You can download it here and read up about the changes incorporated in the latest update
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]

If you have any queries or need any assistance, please contact our support team.

Team SimplePay

Requesting Income Tax Numbers from Job Seekers

SARS have requested that employers amend their hiring practices as they do not require employees to have an income tax number before starting a new job.

SARS would like to encourage all employers to use online platforms to obtain income tax numbers. It will save employees and job seekers unnecessary time at branches, ultimately allowing you to hire faster and/or get new employees working productively sooner. It will also eliminate the administrative burden of having to follow up with new employees for tax numbers and avoid delays from being given the incorrect tax number.

If you’re a SimplePay user, you can obtain the tax numbers when doing bi-annual filing with our [email protected] export file. If you need more information about how easy bi-annual filing is with SimplePay, head over to the Filing and Processes section of our help site here. Importing the file from our system into [email protected] will automatically create employees on the [email protected] system if they are new employees. Then, use the ITREG function to obtain tax numbers for employees. This is explained in a clear step-by-step guide (with screenshots) in section 5 (page 105) here.

If you need further information or assistance with this process, be sure to be in touch with our support team who are happy to help.

Team SimplePay

2019 Employer Annual Reconciliation Filing Season

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.

Team SimplePay

2018 Employer Annual Reconciliation Filing Season

The 2018 Employer Annual Reconciliation filing season is now open. SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS and these are now available for the 2018 filing season.

You will have until 31 May 2018 to submit your Annual Reconciliation Declaration (EMP501) for 1 March 2017 – 28 February 2018 to SARS. This can be done via eFiling or the [email protected] application. You may need to update your [email protected] application to the latest version, 6.8.3. 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]

In preparation for this filing season, we have done some system updates to further simplify the process for you:

  • Pre-validation updates:

We have added additional pre-validation measures to identify data errors are before filing with SARS.

  • Consolidated IRP5s / IT3(a)s

After liaising with SARS, we have updated the way we generate tax certificates for employees who are terminated – any information on once-off payslips created after their termination date are added to the tax certificate generated for their service period if the once-off payslip date falls in the same tax year.

As always, please feel free to contact us at [email protected] if you have any questions.

Team SimplePay