SARS Interim EMP501 Submission 2016 E2E

SARS Interim EMP501 Submission 2016

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.

Contact us on payrollsupport@e2e.co.za for any additional assistance.

SARS Interim EMP501 Submission 2016 E2E

SARS Interim EMP501 Submission 2016 E2E

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

About the Author

fraswa – who has written posts on End 2 End Business Solutions.


3 replies
  1. Talitha
    Talitha says:

    I just have a question about the proper use of the code 4582, because the SARS notes aren’t very clear. Do I show the actual 80/20 split when I use code 4582? Or do I just use the same amount I used with code 3701?

    Reply
    • fraswa
      fraswa says:

      Dear Talitha,
      It is indeed a rather ambiguously written SARS BRS and Source Code notes.

      SARS notes:
      Code 4582 is mandatory if the sum of codes 3701, 3702, 3802 and 3816 is greater than zero;
      Code 4582 must not be greater than the sum of codes 3701, 3702, 3802 and 3816

      As this is a New SARS Tax Total there is loads of uncertainty about this new addition. After some more investigation and test scenarios we ran in the Current version of SARS E@syfile (V6.7.1), the Taxable portion of the “Travel Allowance” and Co Car Fringe benefit needs to be reflected on the Source Code 4582 where only the full amounts were reflected on the Tax Certificates previously (E.G 3701, 3701 and 3802).

      Therefor in example:
      The FULL Travel Allowance (3701) for the Tax Year of assessment 2017 amounts to R100000.00
      This individual is taxed @ 80%
      The Value for Code 4582 Should reflect R80000.00.

      Feel Free to e-mail me directly on payrollsupport@e2e.co.za

      Note: The value of this code represents the total of the amounts
      reflected under each for
      the purposes of the allowable deduction i.r.o. pension, provident and
      retirement fund contributions [section 11(k) of the Income Tax Act].

      Code 4582 – Value of “Remuneration” included in the following allowances and
      benefits, but limited to:
      The portion (80 or 20%) of the allowance and benefit which is
      subject to PAYE –
      Travel allowance (3701/3751),
      Value of the Use of motor vehicle acquired by employer NOT
      via an Operating Lease (3802/3852)
      Value of the Use of motor vehicle acquired by employer via
      an Operating Lease (3816/3866)
      The portion (80 or 20%) of the Reimbursive travel allowance (only
      3702/3752 and NOT 3703/3753) although employers are not
      required to withhold PAYE from this reimbursement, that portion
      code 4582.

      Reply
      • Talitha
        Talitha says:

        Thank you! Finally someone who could answer my question! Now I know how to go forward 🙂

        Reply

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