Companies need to ensure that they are geared to provide SARS with their annual PAYE reconciliation submission before the end of May.
“It is most important that companies download and install this software before conducting their PAYE, SDL and UIF reconciliations to ensure accuracy and compliance with SARS requirements,” says Philip Meyer, technology director at Sage Pastel Payroll & HR.
While SARS will not reject tax certificates that do not have an income tax number, the [email protected]™ Employer system will issue the submitting company a message declaring that penalties can be raised on the employer as a result of the missing information.
Meyer stresses that employers must confirm that the company will comply with the SARS penalties procedure before their companies are able to continue with their reconciliation and submission.
“SARS has also increased employer penalties applying to employee tax certificates that do not have a registered tax number. So it makes financial sense for companies to ensure that they register all unregistered employees with SARS before they submit tax certificates for reconciliation. Even employees that are below the tax threshold need a registered tax number,” adds Meyer.
Companies wanting to register employees for a tax reference number can either go into a SARS branch, or can log onto the [email protected]™ Employer system and load their employees manually. To follow the verification status of the tax reference number, companies can use the ITReg functionality of the [email protected]™ Employer system and follow a synchronisation process to obtain a CSV file with their employees’ tax reference numbers.
“However, companies using an automated payroll software solution can obtain employee tax reference numbers via the Bulk ITREG functionality and the [email protected] Employer system to simplify the reconciliation. Those using automated payroll solutions need only capture employees’ information and their payslip details,” adds Meyer.
During the year end procedures, the electronic tax certificates are generated automatically in the IRP5.13 file. This file can be imported directly into the [email protected]™ Employer system and the payroll EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliations. Meyer points out that this saves businesses considerable time and cost compared to manual calculation and capturing.
“Payroll departments should not issue tax certificates to their employees until they receive notice from SARS that the reconciliation is both complete and correct.”