- Bi-annual PAYE Reconciliation
- Individual Tax Filing Season
- General Information that you need to know
- SARS penalties
Bi-annual PAYE Reconciliation (September/October)
Employers are required to submit their first/interim tax certificate submission and 6 month tax reconciliation from 01 September 2010 to 29 October 2010. You will need to fully reconcile the 6 month period from 1 March 2010 until 31 August 2010.
Note to all SA Businesses
Your submissions will be a breeze if you use our automated Payroll solution, where you will only need to capture your employees’ information and their payslips. No manual calculations are required.
How can Pastel Payroll assist you with your PAYE reconciliation?
Remember to download 2011 Update 3a. This upgrade is crucial for the 2010/2011 bi-annual submission and must be installed prior to finalising your last weekly Payroll run in August 2010.
PAYE Submissions Guide
Below, please find our Support Tools, including details on our Interim Submissions Workshop and Seminar, as well as our contact centre and e-mail support details in order to assist you with your bi-annual PAYE reconciliations.
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Important information that you need to know
Must you include employees’ Personal tax reference number?
Employee earnings less than R60 000 per annum:
Some companies may not have clarity on whether employees earning salaries amounting to less than R60 000 a year have to provide their employers with a personal income tax reference number. The fact is that they do not have to apply for a tax reference number and therefore do not need to submit the information.
Employee earnings more than R60 000 per annum:
Employees earning above R60 000 per annum are required by legislation to register for an IT Reference Number. These employees can go to their local SARS office to obtain the number by completing the IT77 form with the required supporting documentation.
During the September/October 2010 SARS Employer Filing Season, SARS e@syFile will allow employers to verify employees’ income tax numbers and will also allow employers to register employees who have not yet applied for an income tax number.
Please note that the relaxed validations have been removed and that employee address and banking details are now mandatory. The income tax reference number is still an optional field as SARS will make use of the bulk registration facility to issue IT reference numbers to employees.
Please take note of the following important details:
Bi-annual submission of tax certificates (IRP5/IT3(a)):
- Bi-annual tax certificates may only be issued to SARS and may not be issued to employees.
- Bi-annual tax certificates where there is employees’ tax to be reported, must be reflected against code 4102 (PAYE) i.e. the total employees’ tax amount must not be split into SITE and PAYE.
- For employees whose employment was terminated prior to the closing of the bi-annual period (e.g. resigned, death, immigration or employer ceased to be an employer):
- Tax certificates will reflect financial information for the period actually employed.
- Where there is employees’ tax to be reported, it must be reflected against code 4102 (PAYE) and 4101 (SITE) i.e. the total employees’ tax amount must be split into SITE and PAYE.
- The calendar month in the tax certificate number (code 3010) must be specified as ‘02’ to indicate that this is a final tax certificate for the year, and not an interim bi-annual certificate. The same certificate is submitted to SARS again at the end of the tax year as part of the final submission.
Bi-annual submission of Reconciliation (EMP501):
- The total reconciliation liability per month for the relevant 6 month period.
Registration of employees for income tax:
- This process is only applicable in respect of employees with a nature of person indicated as A (individual with identity or passport number), B (individual without identity or passport number), C (director of a private company/member of a CC) or N (pensioner).
- SARS will provide employers with the ability to verify income tax reference numbers of their employees and initiate the registration of their employees for income tax purposes if they are not registered.
- Bulk registration of all employees who are on the payroll at the end of August (only available during the 2010/2011 bi-annual submission):
- All tax certificates that are submitted to SARS at the end of August that do not have an income tax number, will be included in a process that firstly checks and validates the employee’s demographic information on the tax certificate, and then uses the tax certificate information to register the employee for income tax. Note that for the 2010 bi-annual submission, the income tax reference number will not be mandatory.
- Individual registration of employees who are employed after August 2010:
- Employees who are newly employed from September 2010 onwards, can be registered by the employer for income tax, whereby the employer utilises e@syFileTM Employer and specifies the type of certificate as an ‘ITREG’ tax certificate to SARS. These ‘ITREG’ certificates must be issued separately from normal tax certificates, and the information on the tax certificate must be in accordance with the ‘ITREG’ specifications in this document.
- In both cases, once the employee’s demographic information has been validated, the employee will be registered for income tax and the employer and the employee will be informed of the income tax number, or if not successful, the reason for the failure of the registration will be communicated to the employer. In the event of an incorrect number initially provided or the employer does not have the IT reference number, the correct number will be given to the employer.
Individual Tax Season Kicks off for Millions of Tax Payers
The Tax Season commenced on 01 July 2010
The 2010 tax filing season has begun for millions of South African taxpayers. From 1 July taxpayers are able to request their income tax returns from the South African Revenue Service (SARS) and submit the returns manually by post or electronically (online using eFiling).
Did you submit your tax manually last year?
All taxpayers who did not submit their returns online last year, will have received a tax return request (ITRR) form in the post during June. The forms enable taxpayers to order a customised return from SARS, which they complete and then post back to the Receiver. Taxpayers who did not receive the ITRR in the post can contact the SARS Call Centre to request their returns using the new interactive voice response (IVR) system implemented by SARS.
2010 Submission Deadlines
Please take note of the submission deadlines below:
- Manual submissions are due on 30 September 2010.
- eFiling users have until 26 November 2010 to submit their returns.
Manual returns must be received by SARS before the end of September 2010 so manual filers have just three months in which to get their affairs in order. To encourage electronic submission, individuals submitting through eFiling have almost four weeks more, up until 26 November 2010. eFiling users not only benefit from the extended deadline but can also look forward to a more efficient assessment process thanks to a faster, improved version of eFiling.
No returns for those who earn less than R120 000
Lower income groups earning taxable annual income of less than R120 000 from a single employer and who have no other source of income or deductions to declare, don’t have to submit an income tax return.
SARS can recover money owed directly from your bank account
Taxpayers should be aware that SARS intends on collecting every cent owed to them and in their quest to streamline tax collections, employers and banks can be appointed as tax collecting agents. This means that any money owed by a taxpayer can be recovered directly from the individual’s salary or bank account.
Other important information that you need to know
A Customised, pre-populated return
Sections are now pre-populated with the fields you completed last year. Those whose tax affairs haven't changed in the past year, simply need to sign and send back to SARS. The ITRR (Income Tax Return Request) will be sent during the month of June to all taxpayers who did not submit their return via eFiling last year or it can be requested via the Interactive Voice response (IVR).
Taxpayers will have access to their eFiling profile with SARS’s new client-centric functionality
Taxpayer centricity is a new functionality that has been introduced on eFiling starting with Tax Season 2010. It ensures that individuals have full control over and knowledge of their tax affairs, regardless of whether a tax practitioner submits tax returns on their behalf. This will ensure that taxpayers “own their own profiles” if they opt for shared access, or are able to remove tax practitioner access.
New signature pads at SARS branches
Taxpayers visiting SARS branches to capture their Income Tax Returns (ITR12s) with the help of SARS’s friendly staff, will no longer sign a printed copy of their return. Instead, they will sign on a signature pad that will save their signature electronically on the system. The new system is safe to use, and eliminates unnecessary paperwork and the scanning of documents.
New fields on the ITR12
There are new fields on the ITR12, including compulsory Spouse Details that you must complete if you are married in community of property as at 28 February 2010.
The IRP6 (Provisional Tax Return)
Because the majority of provisional taxpayers make their submissions electronically, SARS will no longer send out IRP6 returns to provisional taxpayers. The pre-populated provisional tax forms can be requested, captured and submitted via various channels.
eFiling enhancements
For the 2010 Tax Season for Individuals, taxpayers and tax practitioners will benefit from SARS’s faster, improved version of eFiling. The enhancements are set to deliver a more pleasant and productive eFiling experience for all.
The Notice of Assessment (now the ITA34)
A Statement of Account will be sent to taxpayers along with their ITA34.
E-case tracking
Improvements to the case tracking system will significantly enhance the ability of the SARS Contact Centre and branch staff to not only track a case but to see a full history of interaction over a case to better inform taxpayers and to better help with resolving their queries first time.
Statement of Account for Provisional Taxpayers
Following the big success of the introduction of a Statement of Account for non-provisional taxpayers last year, this facility has been extended to provisional taxpayers this year to give them a view of all their recent transactions with SARS and a balance of payment.
Click here to visit the SARS website for further information on what you need to know about the 2010 Tax Filing Season.
SARS Filing Season [01 April 2010 – 31 May 2010]
Companies need to be on the ball as the preparation season for employers to collate the additional information fields required by SARS in the 2010 Employer’s Filing Season is just around the corner, starting on 01 April 2010 and ending eight weeks later on 31 May 2010.
Use the latest version of SARS e@syFile [from 01 April]
Employers are required to use the latest version of e@syFile for their submissions. Submissions made using the earlier versions of e@syFile will NOT be accepted. The new e@syFile software can be downloaded from the SARS website (www.sars.gov.za ) from 1 April.
Only do submissions from 01 April 2010
It is very important that companies only begin their submissions from 1 April and not before.
Print and issue tax certificates after 31 May 2010
Companies can only print and issue IRP5/IT3(a) tax certificates to their employees after they have submitted their PAYE reconciliations generated on SARS e@syFile – either via SARS eFiling or manually on disk.
Must you include employees’ Personal tax reference number?
- Employee earnings less than R60 000 per annum:
Some companies may not have clarity on whether employees earning salaries amounting to less than R60 000 a year have to provide their employers with a personal income tax reference number. The fact is that they do not have to apply for a tax reference number and therefore do not need to submit the information. - Employee earnings more than R60 000 per annum:
Employees earning above R60 000 per annum are required by legislation to register for an IT Reference Number. These employees can go to their local SARS office to obtain the number by completing the IT77 form with the required supporting documentation.
In the SARS pipeline (from 01 June 2010)
- Preparations for the first reconciliation period after August 2010 should take place.
- Relaxed validations that were applied during 2009/2010 will be removed and these fields will become mandatory for 2010/2011.
- SARS will bulk register all employees whose certificates were submitted without income tax reference numbers during the August 2010 reconciliation.
From 1 September 2010, e@syFile will allow employers to verify employees’ income tax numbers and will also allow employers to register employees who have not yet applied for an income tax number.
SARS Penalities - all you need to know if you missed the SARS Submission deadline of 31 May 2010
Did you know?
SARS penalties vary between R250 to R16 000 per month.
How are the penalties calculated?
The penalty can be applied for up to 36 months and in some cases 48 months, should the breach remain outstanding. It will be based upon taxable income according to following table below:
| Taxable Income ( R ) | Penalty ( R ) |
| Assessed loss | 250 |
| 0 - 250 000 | 250 |
| 250 001 - 500 000 | 500 |
| 500 001 - 1 000 000 | 1 000 |
| 1 000 001- 5 000 000 | 2 000 |
| 5 000 001 - 10 000 000 | 4 000 |
| 10 000 001 - 50 000 000 | 8 000 |
| Above 50 000 000 | 16 000 |
Penalty Events
There are 15 non-compliance events which would trigger the monthly penalty. The first offence to be targeted as part of the phasing-in process is the non-rendition of returns. The remaining offences cover the failure to attend to the following requirements as prescribed by the Income tax Act.
Failure to:
- register as a taxpayer,
- inform of a change of address or other details,
- appoint or announce the change of a public officer,
- furnish information,
- answer a question,
- give evidence,
- meet various administrative obligations imposed upon an employer,
- submit provisional tax returns, and
- meet other compliance obligations not penalised elsewhere in the Act.
There are mechanisms for having penalties waived as well as objection and appeal procedures. There is, however, no guarantee that the penalties will be reduced or waived and such applications, even if successful, would entail an unnecessary waste of time which could otherwise be averted. Taking steps to ensure full tax compliance can thus only be a worthy exercise, going into the new year.
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