Lockdown Recap Blog #5

Update 27 May: the UIF has announced a delay in the opening of COVID-19 TERS applications for May due to a break in the communications link between the UIF’s office and the State Informations and Technology Agency (SITA). Read the media statement here

Update 25 May: As mentioned in previous blogs, such as the Employment Tax Validation blog, SDL contributions for the months of May to August 2020 have been set to zero in line with the legislation. This will be reflected on your EMP201s and you do not need to do anything on your end.

After having a week off last Friday, we’re back to business with the consolidatory blog for the past fortnight! Without further ado, let’s get straight into what’s been covered this week.

This Week’s Blogs

As per every week, here’s the list and summary of this week’s blogs, just in case you missed them!

Annual Employer Reconciliation Period Deadline blog contents:

  • Extended deadline remains 31 May
  • Information on individual tax returns

Repo Rate Change blog contents:

  • New rate of interest cut by 50 basis points

TERS for Foreign Employees and OID Comp Return of Earnings blog contents:

  • Steps to follow to receive TERS Benefits for foreign employees
  • OID Comp Return of Earnings, delayed deadline
  • Relief measures to support employers with respect to their Return of Earnings

Submitted Files for UIF Declaration Now Available blog contents:

  • UI-19 declarations submitted through SimplePay can now be downloaded for personal records
  • Information how to open the file in spreadsheet format

UIF Submissions Update: 18/05/2020 blog contents:

  • Update on the turnaround times for UIF submissions, as well as the amount of backdating
  • Link to original update blog on 14 May.

COVID-19 TERS Update blog contents:

  • Department of Labour’s post application support document for employers who applied for TERS benefits and are looking for further guidance
  • A note for employers who are wanting to apply for TERS in May

New SARS Codes and System Item for Disaster Relief Funds blog contents:

  • Tax Treatment of disaster relief payments
  • New “COVID-19 Disaster Relief” system item on SimplePay

Employment Tax Validation Process blog contents:

  • Summary of the tax validation process
  • Process to follow for over and under deductions
  • News on SDL payment holiday
  • News on the expansion of parental leave benefits

Take-Home Highlights

Employer Annual Reconciliation Period

As mentioned in our blog published earlier today, the deadline for IRP5/IT3(a)s is 31 May, in a little over a week’s time.

We have made all the necessary changes to our system, so all that is left to do is to ensure you get your returns submitted on time!

COVID-19 TERS

It has come to the point where no blog really feels complete without a nod to COVID-19 TERS.

The situation as it stands with TERS is that applications for May have still not opened. We are periodically checking the UIF website for a change (https://uifecc.labour.gov.za/covid19/), but so far to no avail.

Hopefully the application downtime is being used wisely, whereafter a streamlined process will emerge for the remainder of the scheme.

In the meantime we are all at the mercy of Government timelines and process; unfortunately we have no insight into or influence on these, but will do our best to keep you informed as and when we know more.

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

Annual Employer Reconciliation Period Deadline

With 31 May just around the corner, this blog is a friendly reminder that the Annual Employer Reconciliation Period deadline is fast approaching. As mentioned in our blog on 8 May, all the necessary changes were made to the SimplePay site at the start of this month, so all that is left is to jump in and complete your IRP5/IT3(a)s!

As mentioned in this previous blog, SARS has rolled out the Employer Tax Validation system for the first time, which will cross-check SARS calculated value for the SDL and PAYE amounts, with those submitted.

Despite the pandemic, SARS has made it clear that it will not be altering its policy on late submissions, meaning that if you do submit late, you could be subject to penalties of up to 10% the value of the payroll.

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.

TeamSimplePay

P.S. Individual Tax Returns: 

SARS has announced a delay in the deadline for Individual Tax Returns (ITR-12s) from its normal place in July, to September 2020. The online filing period for individuals in 2020 will prospectively run between 1 September and 16 November 2020.

Employment Tax Validation Process

In today’s blog we will be providing a brief overview of the tax validation process, carried out by SARS on the IRP5/IT3(a) certificates. Back in 2019, SARS announced its intention to validate PAYE, SDL and UIF on tax certificates. This blog therefore details the process and extent which they have put this goal into action.

As of the 2020 tax year, SARS is holding employers more accountable for ensuring that they deduct the correct PAYE. This is being done through a validation process, where SARS performs calculations on the tax certificates submitted by employers. Where SARS has determined that employers are not withholding the correct amount of PAYE, the employer will be responsible for taking corrective action. This includes recovering the amount from employees or facing the penalty of paying it on behalf of employees in cases where the employer under-deducted PAYE.

For the 2020/02/28 submission period, SARS will be validating PAYE and SDL amounts submitted.

If any discrepancies are found between SARS’ and the submitted values, a notification and accompanying file are issued to highlight any discrepancies. Employers can then review the report to determine whether the correct taxes were declared on the tax certificate, or if any amendments are required. 

Although SARS does not reject any certificates during the tax validation process, employers must ensure that taxes are correctly calculated. The SARS website states the following:

Note: The purpose of the Payroll Tax Validation letter is to inform the employer of discrepancies on the amount of tax or levies that were deducted for employees. All the certificates submitted were accepted and processed and will be pre-populated on the employee’s income tax return (ITR12).

Locating the Flagged Certificates

For details on how to locate the error report on [email protected] or eFiling and action any errors, please refer to our help page, linked here.

UIF Validation

SARS has stated that for the current filing season they will not be validating the UIF contributions, due to the fact that the value for remuneration in calculating UIF is not present on EMP201s and SARS is also not able to apply the monthly limit. This will therefore need to be double checked by employers to ensure they have the correct value.

Process to Follow for Over and Under Deductions.

The process to follow to correct any over or under deductions can be found on this SARS webpage.

In both cases, it may be necessary to amend the respective certificates. The existing certificate can be amended (i.e maintaining the certificate number), provided that there are no changes to:

  • the type of certificate (IRP5 or IT3(a); 
  • the transaction year; or
  • the year of assessment.

If any of the above does need to be amended, the original certificate must be cancelled and replaced with a new one (yielding a new certificate number).

For any amendments to your certificates, please contact us so we can assist you in doing this on the system. Along with the request, please provide:

  • The SARS tilde (~) delimited file (essentially the error report).
  • Details of the over/under deduction that has been flagged and the employee(s) which it / they relate to.
  • The CSV file from the original submission.
  • Any additional relevant information that you have, which will be of assistance.

We hope that this information proves useful to you. Upon reading the blog and the attached SARS webpage (above), if you find yourself in need of making any amendments to your certificates, please feel free to get in touch with our customer support team at [email protected]

Catch Up Corner

SDL Payment Holiday

In our previous blog about the draft Disaster Management Bills, we mentioned SDL prospectively being set to zero from the start of May until the end of August 2020. We have now implemented this change, so any payslips finalised going forward will reflect the zero SDL value on the EMP201. For employers who have already finalised their EMP201s for May, we will assist you with zeroing the SDL contributions.

Expansion of Parental Leave Benefits

It is now possible for employees taking adoption or commissioning parental leave to claim a certain amount from the UIF when on their leave period. The related SimplePay help page can be found here, with a further link on the page as to how this leave can be recorded on SimplePay.

If you have any queries on the SDL payment holiday or the leave benefits, you can contact our customer support team at [email protected]

Keep home. Stay well. Stay safe.

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