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

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

Tax Return Submissions Are Open

The 2019 tax season officially starts on 1 August 2019. However, if an individual makes use of eFiling or the MobiApp to complete their tax return, they are now able to do so, as filing opened on these platforms on Monday 1 July 2019.

Legislation requires that all employees receive a copy of their IRP5/IT3(a) after the tax year ends in February. This should now have been done, whether in digital or hard copy format. Employees can retrieve their tax certificates themselves via self-service on SimplePay, if this function has been made available by the payroll administrator. For more information on this, refer to our help page here.

Individuals should also take note of the following information:

  • SARS has revealed a new look eFiling website, which will hopefully improve the filing experience. For an optimal experience with eFiling, SARS recommends that a web browser should not be older than the following:
    Chrome v41, Firefox v55, Edge v13, Safari v10 or Opera v55
  • This year, if an individual meets ALL of the following criteria, then they do not need to submit a tax return:
    • Total income from employment for the year before tax is less than R500 000. This was raised from R350 000 last year.
    • Employment income should be received from ONE employer for the full tax year, and NO OTHER EMPLOYER.
    • There should be no other form of INCOME earned (e.g. car allowance, business income, and rental income, taxable interest or income from another job)
    • The individual doesn’t have any additional allowable tax related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).

If there is uncertainty about whether a tax return is required, this can be checked using this SARS tool.

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

Tax Certificates Now Available via Employee Self-Service

At SimplePay we strive to create value for you by meeting your payroll needs in a simple and easy manner. With that in mind, we are thrilled to announce the launch of a new feature to make the tax year-end even easier for you – employees can now view their tax certificates via the self-service function.

This means that you can release IRP5s/IT3(a)s to your employees at the end of the tax year at the click of a button. Employees will be informed via email that their tax certificates are available on their employee self-service. You can also attach a PDF of their tax certificate in this email. Please note: you can only release final year-end IRP5s/IT3(a)s to employees i.e. interim IRP5s/IT3(a)s for the first 6 months of the tax year cannot be released to employees.

Please see the following help page for more information on the steps to enable and use this function.

Team SimplePay