Tag Archive: EMP501


The submission for manual tax returns has now passed. The deadlines for efiling submissions is the 23rd of November 2012 and in this post we’ll be exploring why it is sometimes necessary to seek out professional advice with your tax return.

There are many examples of incorrect tax returns which have ended in large sums of money being owed to the South African Revenue Service, and even court proceedings.  A recent article on the Moneyweb news website states that in one such case, the tax court in Pretoria had to consider an objection by a tax paying company against assessments issues by a SARS auditor. Of course, SARS had issued this assessment based on the tax return submitted by the company and their accompanying financial statements.

Despite many arguments from the company on if they were suitably qualified to be submitting tax returns on behalf of the business, and other issues, SARS won the case. The court ultimately found that the company had underpaid tax on several fronts and was now liable to pay the outstanding tax as well as the interest on the aforementioned amount.

This is just further proof as to why businesses, large and small, should seek the assistance of professional tax consultants when it comes to that time of the year. The help of a professional might cost far less that the penalties involved in an incorrect tax return.

SARS - SME companies should brace themselves for the interim PAYE reconciliation that is due from 01 September 2012 to 31 October 2012. Employers are required to fully reconcile and submit their employee tax certificates and EMP501 reconciliation for the period 01 March to 31 August 2012, by the end of October 2012.

Employers need to make use of the new SARS e@syFile software release, e@syFile V 6.1.0. to successfully submit their interim PAYE reconciliations. If they don’t, they will not be able to transfer their data electronically as the new software release will not recognise the old format.

“Companies have no choice,” says Philip Meyer, technology director of payroll and HR software developer Softline Pastel Payroll, part of the Softline Group and Sage Group plc.

Legislation dictates that each and every employee in a company must be registered on the SARS database with their own tax number. Therefore individual income tax reference numbers must be reflected in the interim PAYE reconciliation. If one or more tax certificates do not include the tax reference number, companies will receive an error notification in e@syFile and with effect from 01 September 2012 companies will be penalised.

“New legislation that took effect in March this year means that medical aid contributions are no longer allowed as a tax deduction for employees under the age of 65. The medical aid capped amounts have also been replaced with Medical Aid tax credits. If companies did not make use of the medical aid tax credit method, their submission will be rejected and they will be required to manually recapture the details on e@syFile”, adds Meyer.

A new IT3(a) reason code for tax certificates has been introduced by SARS for non-deduction of PAYE  and must be applied on interim tax certificates. Code 08 will indicate a zero PAYE liability due to medical aid tax credits applied. There are also new source codes for fringe benefits and tax deductions that must be applied to interim tax certificates, replacing the consolidated values SARS required prior to the 2012 tax year. Most automated payroll software systems already cater for these codes.

Companies can receive step-by-step assistance from a SARS Contact Centre agent with Help-You-eFile. Help-You-eFile is a new service innovation from SARS which gives companies access to SARS Contact Centre agents online.

For a smooth interim PAYE reconciliation, opt for a reputable payroll software solution that can automate the reconciliation process for the company. Some automated payroll software providers require that users only load their employees’ information and payslips. Therefore no manual calculations are requires and companies can simply upload the file to e@syFile.

For further assistance with the interim PAYE reconciliation season, companies can attend the SARS interim submissions seminar, hosted by Softline Pastel Payroll.  Make contact on +27 11 304 4390 or go to seminars@pastel.co.za