There are several organisations outside of government, such as the South African Future Trust (SAFT), providing COVID-19 relief funds for employers to keep paying their employees. The relief is usually offered in the form of a loan to employers and is paid directly to employees. To assist with the special tax treatment and reporting requirements for these payments (see below), SimplePay has created a new system item: COVID-19 Disaster Relief.
As outlined by the Disaster Tax Relief Bill, these payments are not included in remuneration for PAYE, SDL and UIF and therefore are not subject to tax. Although these payments are not included in remuneration for PAYE, SDL and UIF, they are included in remuneration for the purposes of calculating ETI.
Reporting on Tax Certificates
SARS has created a new tax code, 3724, for reporting these payments on IRP5s/IT3(a)s. This is outlined on the SARS website here.
Using the COVID-19 Disaster Relief System Item
To make use of the new system item created by SimplePay:
- Go to an employee’s profile
- Click on Add next to Payslip Inputs
- Under Other, select COVID-19 Disaster Relief
- Enter the Amount of the relief paid to the employee
- Click Save
You will notice that the payment is listed on the payslip as a Benefit and does not impact the Nett pay payable to employees. This is because the relief payments are made directly to employees by the organisation. The system item is simply used for satisfying the tax and reporting requirements and not to facilitate payments.
These details are also outlined in our help page here.
Should you need further assistance, please contact our support team.
Please take note of the following issues and other matters regarding SARS eFiling:
(1) Consolidated Profiles
SARS is consolidating profiles where payroll administrators or individuals have more than one profile on eFiling.
For payroll administrators, SARS is now authenticating all existing users and migrating them to one single profile.
Individuals with multiple profiles will be required to choose a primary login from a list after logging into eFiling with any one of the profiles. Once the primary login is chosen, the indivdual must link the other logins as “Portfolios” to his/her profile.
See the following resources for more information:
Manage your user profile (paragraph 7.2 onwards)
Guide to the Auto Merge Function
(2) SARS eFiling Portfolios
The role in which you act is referred to as the SARS eFiling Portfolio. Only Tax Practitioner and Organisation portfolios can have multiple tax entities loaded on SARS eFiling, while Individuals cannot. Therefore, if you are a SimplePay client that does payroll for multiple firms, you should use the Organisation portfolio.
The 3 types of Portfolios referred to above can be defined as:
- Individual: A person acting on his/her own behalf for his/her own taxes
- Tax Practitioner: A Tax Practitioner that is registered with a recognised controlling body, acting on behalf of another tax paying entity and authorised by a signed Power of Attorney.
- Organisation: A person acting as a representative of a tax paying entity, either as a representative taxpayer or as an appointed representative with a signed Power of Attorney.
(3) Tax Certificates not Pre-populating for Individuals
An error occurs on SARS eFiling under certain circumstances when an individual completes his or her ITR12 (Income Tax return):
- When completing an ITR12, the tax certificate information is pre-populated in the annual return. However, when the individual saves the return and then requests a calculation, the “Creation wizard” defaults the “Unemployment” questions as YES, and the tax certificate that was linked is unlinked and is no longer available.
SARS is working on this issue. The workaround to re-link the tax certificate is:
- The user must set all questions relating to unemployment as NO in the “Creation wizard”
- SAVE the return, and then
- REFRESH the DATA.
However, this will have the effect that the user must complete all the relevant information.
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.
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.