Crucial Information to Ensure Compliance with PAYE

There have been a few changes implemented by the South African Revenue Service with regards to Employee's Tax (i.e. PAYE ) which employers need to be aware of.

The first major change relates to the new bi-annual PAYE reconciliation which is due between 1 September 2011 and 31 October 2011. Employers are obliged to submit the employee's tax certificates and the PAYE reconciliation for the period 1 March 2011 to 31 August 2011.

This submission must be done using the latest e@syfile software released by SARS, known as e@syfile V5.0.2, as failure to do so will result in the employer being unable to perform electronic submissions due to the new software rejecting documents in the old format.

This new e@syfile V5.0.2 has made it compulsory for employers to enter a valid income tax reference number for all employees regardless of their earnings, as all employees are required to be registered for income tax.

This compulsory tax registration can be done in one of three ways -

·         Bulk registration (i.e. Bulk ITREG)

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  • this option allows the employer to automatically register employees, who are not already registered for tax, at the time of the employer submitting the bi-annual PAYE reconciliation;
  • under this option automatic registration will take place twice a year when the interim and annual reconciliations are submitted.

·         Bundled registration (i.e. Bundled ITREG)

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  • this option allows the employer to register a group of employees at any time during the year;
  • these registrations are capped at 100 employees per request and limited to 1 000 employees per month. The excess employees will have to be rolled forward to the next month.

·         Individual registration (i.e. ITREG)

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  • this option allows the employer to register employees for income tax as they are entered onto the company payroll;
  • these registrations are limited to 1 000 employees per month. The excess employees will have to be rolled forward to the next month.

Upon registration of an employee for income tax, SARS will notify the employer via e@syfile and issue a notice of registration (i.e. IT150) to the employee.

These changes will hopefully pave the way for easier, faster and hassle free compliance for all employers.

Kubashni Govender CA (SA)
PKF Durban
Chartered Accountants (SA)  Registered Auditors
12 on Palm Boulevard  Gateway  4319  South Africa
Tel :- (031) 573-5000