It is that time of the year again and South African employers must comply with the Employer Reconciliation Process and submit an employer reconciliation declaration and an interim Employee Income Tax Certificate for the six-month period 1 March to 31 August 2018.
CRS Technologies, an established leader in HR and HCM services and solutions, advises clients to ensure that they adhere to all the requirements of the Income Tax Act and SARS regulations, specifically in terms of the Employer Reconciliation Process.
Employers must submit reconciliation declarations (EMP501) in respect of the EMP201 submitted, payments made and the IRP5/IT3(a)certificates for 1 March to 31 August (interim period) and 1 March to 28/29 February (annual full tax year period).
CRS Technologies says from a SARS perspective the Employer Reconciliation Process is part of the organisation’s modernisation and alignment process with international best practice.
“As SARS explains, the Employer Reconciliation Process has been updated to enable the employer to rectify their total payment declaration via the EMP501… it is part of the organisation’s vision to establish and enact a more accurate reconciliation process,” says Sandra Maritz, Legislation Business Consultant at CRS Technologies.
The company reiterates SARS’s directives and explains that employers are required to submit EMP501 declarations that reconcile the taxes collected from employees with the monies paid to SARS and the total tax value of employees’ income tax certificates, for the period under review.
“Tax season and compliance can be a daunting experience for employers. Our advice is to pay close attention to all the criteria for compliance, to tick each item on the checklist and pay close attention to any documents submitted for accuracy and completeness. This is the only way to ensure that the business is on the right side of SARS and to avoid penalties,” explains Maritz.
To help clients comply with SARS directives on Employer Reconciliation Process, CRS has introduced the following guide.
These are 8 steps that need to be kept in mind:-
- Employer reconciliation submissions must be made to SARS by the deadline, as prescribed in the Government Gazette. The Employer Interim Reconciliation submission period opened 17 September 2018 and closes on 31 October 2018.
- First determine the total income of employees for the year, and recalculate tax based on that amount
- Consider the differences (if any) in recalculated liability according to tax certificates compared to previously submitted EMP201 forms
- Keep a look out for pre-populated information and the accuracy thereof
- ETI or Employment Tax Incentive is important, and this question must be answered in full, and accurately
- Amounts declared must be verified… EMP501 must correlate with that of EMP201
- Total monthly payments (with regards to PAYE, SDL, and UIF) will be auto-calculated.
- Settling shortfalls reflected on reconciliation. Payments must be allocated to the period (s) in which the shortfall occurred.
CRS Technologies says these are just some of the steps that employers should take to ensure compliance.
The company has the expertise and market experience to assist companies.
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