Employers should be aware that Employer Annual Reconciliation submission due date is fast approaching. If the relevant deadlines are missed, certain penalties will apply.
When should it be paid?
The Employer Annual Reconciliation starts on 1 April 2018 and employers have until 31 May 2018 to submit their Annual Reconciliation Declarations (EMP501) for the period 1 March 2017 to 28 February 2018 in respect of the Monthly Employer Declarations (EMP201) submitted, payments made, Employee Income Tax Certificates [IRP5/IT3(a)], and ETI, if applicable.
What do I need to do?
Employer Annual Reconciliation 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).
Every employer who is registered at SARS for Pay-As-You-Earn (PAYE), Unemployment Insurance Fund(UIF) or Skills Development Levy(SDL), should submit an EMP501. An employer is required to submit accurate reconciliation declaration (EMP501) in respect of the monthly declarations (EMP201) that was submitted, payments made and the IRP5 / IT3(a) certificates for the following periods:
- Annual period: this is for the period from 1 March 2017 to 28 February 2018
- Interim period: this is for the period from 1 March 2018 to 31 August 2018
What is PAYE?
Employees’ Tax refers to the tax required to be deducted by an employer from an employee’s remuneration paid or payable. The process of deducting or withholding tax from remuneration as it is earned by an employee is commonly referred to as Pay-As-You-Earn, or PAYE.
What happens when you miss the deadline?
Employers who miss deadline submissions on any of the below are subject to a percentage-based penalty:
- Non-submission of an Employer Annual Reconciliation (EMP501) on or before the due date.
- Non-submission of employee IRP5 / IT3(a) certificates.
- Submission of incorrect or inaccurate data relating to the IRP5 / IT3(a) certificates.
This penalty will be charged for each month that the employer continues to fail to remedy the non-submission.
Avoid the confusion and late submission by contacting us for assistance.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)