Some employers may not be aware, but they are required to submit an Employer Reconciliation Declaration (EMP501) that either confirms or corrects the PAYE, SDL and UIF declarations per monthly EMP201 submitted – as well as the payments made and the tax values of the Employee Tax Certificate (IRP5/IT399(a)) and ETI, if applicable.
There are two reporting periods that must be factored in – the first, an interim period (for transaction period 1 March to 31 August) and an annual period (for the full tax year 1 March to 28/29 February).
The interim reconciliation was introduced in September 2010, and is intended to assist employers by enabling an easier and more accurate annual reconciliation submission, maintaining an up-to-date employee database and registering employees for income tax purposes.
So, in a market that is heavily regulated and dominated by compliance issues, these are real advantages!
Why is this significant? Well, manually completed payroll tax delivered or posted to a SARS branch, are no longer accepted (employers with a maximum of five IRP5/IT3(a)s being the only exception); SARS issues new validation rules before the start of each employer filing season and employers must ensure that they use the latest version of SARS e@syFile to ensure their submissions pass the current validations.
It is critical for decision-makers to remember that failure to submit the reconciliation declaration by deadline or submitting incomplete or incorrect details could render the business liable to severe penalties.
As you can tell the reconciliation process is arduous and a trusted and experienced partner like CRS can help.
As a HCM specialist and outsourced service provider we can assist in the submission of the interim and annual EMP501s.
With our knowledge and years of experience coupled with all the legislative amendments published, CRS can save you precious time and costs by offering reliable assistance.
This places some relief on you the employer, when the statutory payments are due.