If financially able, you can advance TERS benefits to your employees in the interim between application and disbursement of funds, recouping the money you have advanced from the TERS benefits paid into your account.
Here are some general points which you should consider when deciding how to reflect an advancement:
- If you, the employer, haven’t received TERS benefits yet, and want to ensure that you do not advance more money than the value of the TERS benefit (as this shall be deemed a non-reclaimable top up), you should advance R3 500 as this is the minimum amount an employee will be granted by the UIF under TERS. You can pay the balance when benefits are disbursed if the employee is entitled to more than R3 500.
- If you are planning on topping up your employee’s wage, you must ensure that the sum of the benefit and top-up amounts do not exceed the employee’s normal salary.
- All of the advances need to be reflected as TERS payouts on the EMP201 for the respective month, as otherwise the employee will be subject to paying larger PAYE and UIF contributions. This is because these are calculated using balance of remuneration, which does not include TERS benefits.
Reflecting June TERS Advancements Correctly in EMP201s
If you have received TERS benefits to disburse to your employees for April and / or May, you will know the amount that each employee receives each month. These amounts should be added to each employee’s payslip as a “TERS Payout”, thus ensuring the correct tax treatment thereof. This can be done in bulk as follows:
- Go to Employees > Bulk Actions > Payslip Inputs
- Using the filters, select TERS Payout under “Other”
- Enter the amounts for each employee
- Click Save.
Additionally, before finalising the payslip you need to also reduce the amount of employee remuneration by the value of their TERS benefit. Any sum left should reflect the amount you wish to provide as a top up. This can be done in bulk by going to Employees > Bulk Actions > Regular Inputs and reducing the wages by the corresponding amount.
Advancements Already Paid for April / May, But Not Correctly Reflected in the Employee’s EMP201s
Whilst waiting for TERS benefits to be disbursed, you may have opted to pay employees a salary for April or May and also submitted an EMP201 reflecting this money as remuneration. When you then receive the benefits corresponding to a certain month, it is not correctly reflected on employee EMP201s, in order for you to recoup the money advanced.
In such a case, you should do the following:
- Download the transaction history report (Reports > Transaction History Report) and the EMP201s reflecting the PAYE and UIF liability (Go to Filing and click on PDF next to the relevant EMP201s for April / May 2020).
- Unfinalise the payslips which record the payment amount as salary (Pay Runs > Unfinalise). If these payslips are part of a pay run, you will first need to delete the pay run before you can unfinalise these payslips.
- For each employee, go to their payslip for the month in question and add the amount of TERS benefits which they are due. Additionally, reduce the amount of salary they are paid by the value of the TERS benefit they are paid. Both of these tasks can be done using the bulk inputs functionality, mentioned above.
This now reflects that:
- You have paid an advancement of TERS benefits to your employees.
- Any amounts above and beyond the TERS benefit paid are top-up amounts which you have opted to pay your employees.
- Finalise the amended payslips
- Resubmit the EMP201 information to SARS using e@syFile or eFiling.
The payment of the TERS benefits to you can be used to recoup the advancement you have made.
NOTE: Your employees will have over contributed PAYE and UIF. They will be able to recoup the excess when completing their individual tax returns, unless refunds are accommodation for in the upcoming TERS auditing process.
I am not a SimplePay client, is it still possible to use your forms for UIF and TERS?
All of the forms and functionality covered 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. That way you can generate the relevant forms for your COVID-19 relief now and then continue to experience the joy of stress free payroll and SARS filing for years to come 🙂