Employer Reconciliation Declaration

Employer Reconciliation Declaration

Employer Reconciliation Declaration

EMPLOYER RECONCILIATION

Employers are required to submit their Pay-As-You-Earn (PAYE) Employer Annual Reconciliations between 1 April and 31 May 2018 to SARS, confirming or correcting payroll tax amounts which were declared in respect of the 2017/2018 tax period.

 

What is Reconciliation?

It involves an employer submitting an accurate Employer Reconciliation Declaration (EMP501), Employee Tax Certificates [IRP5/IT3(a)s] to be issued and if applicable, a Tax Certificate Cancellation Declaration (EMP601).

The three elements that must reconcile in order for your submission to be successful are the:

  • Monthly Employer Declarations (EMP201s) submitted [Pay-As-You-Earn (PAYE) and/or Skills Development Levy (SDL), Unemployment Insurance Fund (UIF) amounts due and Employment Tax Incentive (ETI), if applicable]
  • Payments made (excluding penalty and interest payments)
  • IRP5/IT3(a)s generated – PAYE, SDL and UIF values.

 

Who is it for?

Employers need to submit their reconciliation by the date published in the Government Gazette.

 

When and how should submissions be made?

Reconciliation declarations should be submitted twice during the year of assessment, for the:

  • Interim period – which is for the six month period 1 March to 31 August
  • Annual period – which if for the full year 1 March to 28/29 February.

The Business Requirement Specification (BRS) defines the data submission requirements for the tax certificates [IRP5/IT3(a)s],  and the reconciliation for PAYE, SDL, UIF and/or ETI, if applicable.

 

Business Requirement Specification        Year Applicable                  Submission dates*                        
BRS – PAYE Employer Reconciliation for 2017 / 2018 2018 Annual Employer Reconciliation
(1 March 2017 – 28 February 2018)
Interim: 15 Sep – 31 Oct 2017
Annual: 1 Apr – 31 May 2018
BRS – PAYE Employer Reconciliation for 2016 /2017   2017 Annual Employer Reconciliation
(1 March 2016 – 28 February 2017)
Interim: 12 Sep – 31 Oct 2016
Annual: 1 Apr – 31 May 2017

 

* The final submission periods are subject to business requirements/readiness and calendar working day dates. Final confirmation will be communicated at the time of the relevant submission period. 

Completing your reconciliation online is the quickest, easiest and most convenient option. You can use either:

Copies of all declarations submitted and related supporting documents (relevant material) must be kept for five years.

Top Tip: Should your submission not balance across the three elements [EMP201, payments submitted and
IRP5/IT3(a)s)], we will alert you by letter.

 

Don’t forget the following important details:

1. Make sure you have the latest version of e@syFile™ Employer available. To download the latest version, click here.

2. Import the electronic Employee Tax Certificates [IRP5/IT3(a)s] CSV files from your current payroll system.

3. Reconcile your EMP501 –

  • Capture all additional manual IRP5/IT3(a)s, and e@syFile™ Employer will use the information, from all the tax certificates, to automatically calculate the certificate totals for your EMP501.
  • Enter your monthly liabilities, payments, and Employment Tax Incentive (ETI) information, if applicable, and e@syFile™ Employer will calculate the rest!

4. Manually completed Payroll Tax, placed in a drop-box at a SARS branch or posted, are no longer accepted.

These forms include:

  • Monthly Employer Declaration (EMP201)
  • Employer Reconciliation Declaration (EMP501)
  • IRP5/IT3(a)s
  • Tax Certificate Cancellation Declaration (EMP601)
  • Reconciliation Declaration Adjustment (EMP701).

 

Top Tip: An exception is made for employers with a maximum of five IRP5/IT3(a)s. The employer can still go into a SARS branch where an agent will help them capture these IRP5/IT3(a)s and the EMP501.

These electronic channels are free, convenient and available 24/7.

5. Make sure your reconciliation submission balances.

  • The EMP501 must reconcile to your EMP201s, which should have been submitted during the period (giving you a chance to correct this, where needed).
  • The EMP201s must reconcile to payments made for the period.
  • The EMP201 payments must reconcile to your IRP5/IT3(a)s generated.

Top Tip: Send your reconciliation before the deadline to avoid penalties and interest being charged.

If you would like to discuss any other urgent concerns please contact us for assistance on 031 207 1572 /031 207 3665 or email us: info@hwaccounting.co.za

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