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SARS Introduces Interim PAYE Reconciliation Process

01 September 2010   (0 Comments)
Posted by: Author: Mark Kingon
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SARS Introduces Interim PAYE Reconciliation Process

The first Pay As You Earn (PAYE) interim (biannual) reconciliation takes place from 1 September to 29 October 2010.The interim reconciliation is a six-month reconciliation for the period 1 March 2010 to 31 August 2010.The employers’ tax season has always marked the climax of the tax year for employers, when they submit their reconciliations for the period 1 March to end February for PAYE, SDL and UIF.While the annual reconciliation declaration will still be required for the full tax year ending February, the interim reconciliation will also be an integral part of the PAYE process going forward.

Mandatory Fields

During the annual reconciliation (April/May 2010), SARS relaxed the requirement for employers to provide certain information to improve the efficiency of the reconciliation and submission process. These fields are now mandatory for the 2010 interim submission.

This information is critical in fulfilling SARS’s long-term vision to have a more accurate reconciliation process.More accurate information means a less cumbersome tax process, as tax returns are increasingly pre-populated.It will also set the foundation for increasingly efficient processing of PAYE submissions.These mandatory fields include employees’ addresses, telephone contact numbers and bank details. The advantage for employers in collating this information is that they will have an up-to date database of their employees.

Submission Of Tax Certificates

The new requirement to submit tax certificates on a interim basis is for administrative purposes only which, at the end of the day will provide the backbone for an efficient PAYE and personal income tax system.As a result, the requirements for tax certificates need to be clearly understood.Interim tax certificates must not be issued to employees.However, a certificate should be provided to an employee whose employment was terminated prior to the closing of the interim period within 14 days of such termination.

This new process also benefits employers in that they will be able to provide a more accurate indication of their PAYE status, identify payment gaps, and reconcile and eliminate their own administrative issues on a regular basis.

Registration Of Employees

SARS has relaxed the requirement for employers to provide employees’ income tax reference numbers on the employee tax certificate during this interim reconciliation in September/October 2010, and will provide income tax numbers to all employees who do not have one subsequent to the interim reconciliation.Importantly, registration with SARS does not mean that a taxpayer is required to submit an income tax return.The requirement to submit an income tax return depends on the nature of a taxpayer’s tax affairs and income generation.Currently, you are not required to file a return if you earn under R120 000 a year from a single employer, and do not have a car allowance, do not have additional income and do not have any other deductions.

Submission Process

Employers can make their September/October declaration: 

1.Manually by completing the relevant declaration documents and tax certificates.

2.Electronically by generating the CSV tax certificate file from the payroll system, and importing this file into e@syFile Employer for submission to SARS. Using e@syFile.Employer, you can capture additional manual certificates, cancel certificates and capture EMP501 or EMP701 details.

Employers who made a declaration manually can then make their submission: 

•Over the counter at a SARS branch 

•In a SARS branch drop box 

•Via the post.

Employers who made a declaration electronically,can then make their submission:

•Electronically via the internet

•On a disk, remembering to include signed hard copies of the EMP501, and, if applicable, an EMP601 and EMP701.Please note that the employers would have made a declaration using e@syFile Employer. 

Earlier this year, a new payment system was introduced so that employers can make one payment instead of three for PAYE, SDL and UIF.All employers need to do is to indicate how they want this payment allocated against the various tax types and periods.

Source : By Mark Kingon (TaxTALK)


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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