Dear Readers, SARS Interim EMP501 Submission 2016 is now open. It’s that time of the Year again to get your Company EMP501 Recon and Declarations Submitted. There have been many changes and SARS updates to get compliant with. I listed the SARS top tips on the current and recent changes.
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SARS Interim EMP501 Submission 2016
- Employer Interim Reconciliation 2016
Employers are required to submit an EMP501 confirming or correcting the amounts declared for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL), Unemployment Insurance Fund (UIF), and Employment Tax Incentive (ETI) in their EMP201s submitted, the payments made and the tax values of the Employee Tax Certificates [IRP5/IT3(a)]. The interim reconciliation is for the six-month transaction period 1 March to 31 August and must be submitted during September and October.For the 2016 Employer Interim Reconciliation the following legislative and system changes should be noted:
- From 1 March 2016 contributions to Pension, Provident and Retirement Annuity Fund is deductible for payroll taxes
- New source codes (3817, 3825, 3828) have been created to differentiate between Pension, Provident and Retirement contributions and new source code (4582) to indicate the total value “remuneration” portion where the source codes allow a 20/80 split
- Medical expenses tax credit for people over 65 years who are still employed have been introduced
- New source code(4120) has been created to capture the additional medical expenses tax credit for employees over 65 years
- Taxpayers will be able to submit a request for correction in relation to audited periods after the audit has been completed. Audit outcomes will be communicated to taxpayers via listed email on SARS records, posted letters will only be sent to taxpayers who do not have an email listed under their profile
- EMP 501 has been updated to enable employers to print both EMP 501 and IRP5/IT3 (a) as a package. There is also an option for taxpayers to write the postal address in their preferred unstructured format
- e@syfile Employer enhancements include an upgrade to Windows 8, and bulk printing of IRP5/IT3(a) certificates
- Capturing of an EMP 201 return prior to 1999 will be allowed.
Top Tip: The latest e@syFile™ release notes is version 6.7.0.
- 13 June 2016 – 2016 IRP5/IT3(a) : 4018
Income Protection Policy Premiums (4018) is not allowed as a deduction from 1 March 2015. Some employers have taken this deduction into account for the 2016 PAYE calculations. This resulted in the under-deduction and payment of PAYE.These employers are requested to rectify such under-deductions and payments to SARS. Incorrect IRP5/IT3(a) certificates should be corrected, submitted to SARS and re-issued to affected employees. Employers are requested to make these corrections urgently to ensure that the correct details can be pre-populated by SARS on the employees’ income tax returns (ITR12s).The 4018 deduction may still be reflected on the 2016 IRP5/IT3(a) certificate although it no longer qualifies as a deduction for tax purposes.
- 1 April 2016 – Employer Annual Reconciliation Employers are required to submit their Pay-As-You-Earn (PAYE) Employer Annual Reconciliations between 18 April and 31 May 2016 to SARS, confirming or correcting payroll tax amounts which were declared during the 2015/2016 tax period.This year, employers are urged to accurately verify and update each employee’s personal and financial details before submitting their Annual Reconciliation Declaration (EMP501) and Employees Income Tax Certificates [IRP5/IT3(a)s] to SARS.Should these details be incorrect on an IRP5 certificate, the employee will be unable to file his/her Income Tax Return for Individuals (ITR12) during Tax Season. Individuals will no longer be allowed to make any corrections to pre-populated IRP5 details on their returns.In cases where details are incorrect, employees will have to revert to their respective employers who will need to make changes on the IRP5 and re-submit these to SARS. This process can be time consuming and it may become problematic for employees to file on time.
Employers play a very important part in the income tax cycle which effectively starts on 18 April with the submission of the annual reconciliations. We rely on your cooperation to make the submission of ITR12s later in the year as stress-free as possible for all involved. Need help? Call the SARS Contact Centre on 0800 00 7277