New Feature: EMP201 Breakdowns and Variances

If you’re managing a business or department, you know the importance of tracking variances and maintaining an audit trail. Similarly, if you manage the submissions to SARS, it is important to be able to track any changes to your payroll which impact your submission and resubmit if necessary. What if there was a way to make these easier? Well now there is! Introducing the expanded EMP201 web view.

In a previous blog post, we introduced the ETI breakdown, accessible from the EMP201 web view. We have now applied the same concept to other areas of the EMP201, with breakdowns available for PAYE, SDL and UIF. 

Each breakdown shows a list of your employees and the total PAYE, SDL or UIF calculated for each employee. 

Remember, you can view the PAYE, SDL and UIF trace for each employee by going to their profile (announced in this blog post).

We have also created a variance feature for months where more than one EMP201 has been generated. Remember, if you make changes to your payslips after your EMP201 is finalised, a new EMP201 is generated so that you have a clear audit trail for resubmitting to SARS if needed. The breakdowns for any updated EMP201s now also show the differences between the PAYE, SDL, UIF and SDL in the updated EMP201 compared to the previous EMP201. The differences are shown per employee and the total difference is shown at the bottom of the breakdown.

We hope you love this new functionality and the benefits that it provides.

Need more information? The following help articles may be useful:

Not a SimplePay client? The EMP201 form and all functionality covered in this blog post and on our help site are only available to SimplePay clients. The good news is that we offer a 30 day free trial and sign up is a breeze! You can find out more and sign up for a trial here. Come and experience the joy of stress-free payroll.

Team SimplePay

COVID-19 Support Measure Timeline and Switching Support Options

Update 15 July: The UIF has released a statement that in order for them to authorise the disbursement of TERS benefits, you must enter your Enterprise number or ID number of the bank account holder. Failure to do so will result in delays.

Following on from the President’s speech last Sunday, 12 July, concerns over a spike in coronavirus cases has led to an extension to level 3 of lockdown. The effect of this is that many businesses and their employees will likely have to continue relying upon support to remain operational. In the blog today we want to outline the timelines for the existing COVID-19 support measures, thus helping you in making an informed decision for the coming phase of transition.

Timeline of Support Measures

Dependent on any announcements from the Government, as of 15 July 2020, this is the current timeline for the rolling up of support measures.

1 July 2020

Update 22 July: The UIF has announced an extension of the COVID-19 TERS scheme to 15 August 2020.

COVID-19 TERS scheme ceases to operate, meaning that TERS benefits cannot be claimed for July. Despite this, the Minister announced that there has been no cut off date put forward for claims to be made for the months of April, May or June. Therefore, if you are yet to apply for these months, you should do so as soon as possible.

NB: As per the above update, the home page of the TERS application portal has been altered, with a new message outlining urgent steps for the employer to take, in order for the UIF to be able to authorise payment of applications. Please take a look in case any action on your part is required for claims already submitted.

1 August 2020

35% PAYE deferral reaches completion, meaning that repayments start to become due for the amounts  deferred over the last 4 months, These repayments will be spread equally across the 6 months after the scheme finishes. It appears SARS will calculate these repayments and add them to your Statement of Account – please see question 10 SARS’s FAQ for more detail.

Additional and Extended ETI period closes, meaning that the original ETI sums and eligibility requirements will be back in force.

1 September 2020

SDL Payment Holiday comes to a close, meaning that employers and their employees will have to resume making contributions. SimplePay will automatically start to calculate SDL contributions again come 1 September. We also anticipate SARS to update their channels to allow for these inputs again. No repayments for the months that the holiday was in force will be necessary.

Alternate Support Systems Remaining in Place

We appreciate that the above list of timelines is quite a change in the tides, but we should reiterate that some of these deadlines could be subject to change. Additionally there are still other support measures available to help you with reducing cash outgoings, whilst your business returns to normality. Below is a non-exhaustive list of examples which you may wish to look into: 

Now is a good time to start planning ahead for how to handle this next transition phase and if necessary look into additional support measures.

Moving From TERS to UIF Benefits

If your business remains closed or affected by the pandemic and you have been reliant upon TERS benefits to help support your employees, now is the time to look into switching your employees onto claiming UIF Benefits.

The Department of Employment and Labour and UIF have released the “UIF Benefits – Easy Guide for Electronic Claims” which provides guidance on how your employees can apply for UIF benefits through uFiling, as well as a list of useful contacts. 

To help make this process as hassle free as possible for you, SimplePay generates both the individual UI 19 and UI 2.7 forms, which are necessary for your employees to be able to apply for benefits in relation to reduced working hours, maternity leave or parental leave. Note that the documents required are different for employees applying for illness benefits.

Further guidance on the correct procedure for you to follow for ending employee service is given in our blog from 6 July. Doing this process correctly will help improve your chances of a smooth transition onto UIF benefits.

We hope that the information we have provided proves useful to you. Should you have any questions on how the above relates to SimplePay or where to find further information on the functionality provided please refer to our Help Site, or get in touch with us at [email protected].

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]syfile 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

Amended Disaster Management Bills and Level 4 of Lockdown – 5 May

As a new week under lockdown commences, we have plenty to update you on! Firstly, as promised in our last blog, found here, we have an update on what new information has come to light following the release of the Government’s latest draft bills. Following this, we have provided you with a summary of what you need to do to be compliant when reopening your business under level 4 of the lockdown.

Latest Disaster Management Bills’ Effect on Payroll

The Disaster Management Tax Relief and Tax Administration bills were released over the weekend, providing the detail needed from the Minister for Finance’s speech on 23 April (linked here). They will be open to scrutiny up to 15 May, after which point the finer details of the law shall crystallise. Nonetheless, the following measures are operational already due to the nature of the Disaster Management Act 2002.

ETI Update

Update 6 May: We are pleased to announce that the necessary changes to the system have been made, meaning that you can now submit/resubmit your EMP201s for April to receive the full additional ETI entitlement for qualifying employees.

Under the latest draft bill, as suggested in last week’s recap blog, the amount of additional ETI per employee under the new scheme has been increased from R500 to R750. 

At this moment in time, this incentive is still to be run between 1 April and 31 July. We are working on our system for you to be able to claim this additional ETI, including this revised amount of R750 per employee, as soon as possible.

We shall release a further blog and notification as soon as we have done the above to give you as much time as possible to resubmit.

Skills Development Levy (SDL) Payment Holiday

It has been reiterated that no contributions towards the SDL are necessary for the months of May to August. As it is a suspension, this means that you will not have to pay these month’s contributions at a later date.

We shall make the necessary amendments so that these changes are reflected in May’s EMP201 submissions.

35% PAYE Deferment

The draft bills have reinforced many of the points from previous blogs and are reiterated here:

  • Increase in the amount of PAYE which can be deferred from 20% to 35% (this is calculated automatically for you by SARS, see our recap blog here).
  • Increase in the annual turnover threshold of tax compliant small to medium sized businesses from R50 million to R100 million.
  • The deferment is effective from 1 April to 31 July (4 months).
  • Repayments shall be spread equally across the 6 months following the deferment period.

There have also been some proposed amendments on passive income. These are as follows:

  • The passive income (e.g. rent) percentage which could make businesses ineligible for the scheme has been increased from 10% to 20%.
  • The categories passive income shall be extended to include currency derived from royalties and annuities.
  • This rule on passive income excludes persons whose main trading activity is the letting of fixed property.

As per our previous blogs, you do not need to carry out any steps in order to receive the benefit of the deferment. The calculations will be done by SARS, reducing the amount of PAYE which is due for the month in question.

Workplace Requirements – Lockdown Level 4

With a number of employees set to return to work under level 4 of lockdown, the Department for Labour has set out minimum guidelines to ensure the safety of workplaces.

Below we have summarised all of the requirements that need to be met.

General

  • Employers must provide employees, at least two cloth masks, free of charge.
  • Employees and members of the public must wear masks when commuting or entering the premises.
  • Employees with symptoms must not be at work and employers must either grant paid sick leave, or apply for the COVID-19 Temporary Employee/Employer Relief Scheme (TERS) on their behalf.
  • Employers must appoint a manager to address the concerns of employees.

Social Distancing

  • Workplaces must be arranged to allow for at least a 1.5 metre gap between employees. Employers were also encouraged by Minister Thulas Nxesi to minimise the number of workers present at one time through shift patterns to achieve social distancing.
  • If the 1.5 metre gap is not possible, barriers must be erected, and PPE provided free of charge.
  • All common areas, such as canteens, must practice social distancing.

Screening 

  • Employers must screen employees for symptoms at the time that they report for work. 
  • Employees must immediately inform their employer if they experience any symptoms while at work.
  • Workers with symptoms must be placed in isolation and arrangements made for transit to medical examination or self isolation.
  • Employees who recover from COVID-19 may return to work following a medical evaluation, and subject to ongoing monitoring.

Sanitisers and Disinfectant

  • Employers must provide a sufficient amount of hand sanitiser with at least 70% alcohol content.
  • Communal and shared equipment must be regularly cleaned.

Enforcement by Labour inspectors

  • Labour inspectors are empowered to promote, monitor and enforce compliance.
  • Failure to comply could result in the closure of the business.

Minister Nxesi emphasised that all of the above needs to be in place for when employees return to work, and failure to comply could result in the closure of that business. The department is looking to employ a further 500 inspectors to help regulate these new directives and ensure that everyone returning to work remains safe.

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