Tag Archive: Sage Pastel Payroll & HR


Finance Minister Pravin Gordhan delivered his Budget Speech on 26 February, favouring consistency and steadiness over change and fireworks ahead of the national election on 7 May.

Some tax relief for tax payers in the 2014/15 Budget Speech – 40% of the tax relief was allocated to those who earn up to R250,000 per annum, meaning individuals earning more than R250,000 per annum will receive a little less of the allocated tax relief pool.

Though some commentators had speculated that high earners would need to pay higher income tax, the Minister left income tax rates untouched, says Madelein van der Watt, Development Manager at Sage Pastel Payroll & HR. The lowest tax bracket remains at a tax rate of 18% (annual taxable income up to R174,550) and the highest tax bracket remains taxable at 40% (annual taxable income of more than R673,100).

Tax credits for medical scheme contributions

Effective from 1 March 2012, the medical aid capping system was replaced with a tax credit – bringing in equality for all taxpayers under the age of 65 and improved benefits for lower earners.

In the new tax year, commencing 1 March 2014, monthly tax credits for medical scheme contributions (reduction of tax payable) have been marginally increased from:

  • R242 to R257 for the main member and the first dependent on a medical scheme
  • R162 to R172 for each additional beneficiary on the medical scheme

The medical aid tax credit system allows a reduction on income tax and does not reduce taxable earnings as the medical aid deduction system allowed in the past.

“The credit system is a more fair approach to providing tax relief as each individual contributing towards a medical aid fund will receive equal relief as it is not based on annual earnings. Whether an individual earns R250,000 per annum or R2,500,000 per annum, the income tax liability will be reduced by R257 for each of these individuals with at least a single beneficiary on the medical aid fund.”

From the 2014/15 tax year, medical aid contributions by people older than 65 will also be subject to the medical aid tax credit system. Up until now, those contributions were fully tax deductible. Effective from 1 March 2014, their contributions will also be subject to the medical aid tax credit system.

Is it a fringe benefit?

The company contribution towards an employee’s medical aid yields a taxable fringe benefit.

Generally, any payment made by an employer on an employee’s behalf, must be included in an individual’s taxable remuneration, before calculating the final PAYE deduction. Only pension and provident fund contributions are still exempt from the rule until 1 March 2015.

Regardless of an employee’s age or employment contract conditions, the medical aid contributed by an employer, whether in cash or as a package component directly to the fund, must be treated as a taxable fringe benefit.

The contribution paid by the employer will be subject to employee’s tax and contrary to popular belief, there is no way to structure a salary package to bypass the fringe benefit.

During the 2012/13 year of assessment, 76% of all fringe benefits reported on tax certificates were medical aid contributions made by employers on behalf of their employees.

Medical Aid Contributions must be reported on the employee’s tax certificate

As part of the Employer Filing season, each company is responsible to issue their respective employees with a tax certificate.

Medical Aid Contributions, both the employee and employer contributions must reflect on the employees tax certificate (IRP5/IT3A). If you’re making use of an automated payroll system, the codes are already loaded for you. In addition, a company is making use of an automated payroll system, they can import a payroll file with all the filing requirements directly into the e@syFile™ Employer system and the payroll EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliations. Van der Watt points out that this saves businesses considerable time and cost compared to manual calculation and capturing.

If you’re making use of a manual payroll system or payroll spreadsheets, please make use of the following codes:

  • Source code 4005 for employee and employer contributions
  • Source code 3810 for the taxable fringe benefit equivalent of the employer’s contribution
  • Source code 4116 for tax credits allowed

How can an automated payroll system make your business life easier?

To calculate the correct employee’s tax effect of a medical aid contribution, an employer must take the following into account:

  1. What is the total contribution that must be processed every month?
  2. How much of the contribution must be deducted from the employee’s gross income and how much is payable by the employer?
  3. Is the employer’s payment made as a cash contribution to the employee or paid directly to the medical aid?
  4. Remember to include any employer payment as a taxable fringe benefit when calculating the PAYE deduction for the month.
  5. How many dependents belong to the employee’s medical aid?
  6. Remember to constantly keep track of new dependents added or dependents removed from the medical aid policy.
  7. Remember to check for any contribution increases or change in medical aid cover that might affect the contribution value processed on the payroll.
  8. Don’t forget to calculate the medical aid tax credit after you have determined PAYE based on taxable earnings. The tax credit is based on the number of dependents and must reduce the PAYE value before you calculate the net pay.
  9. Every six months, you need to submit a PAYE reconciliation to SARS detailing the contributions, fringe benefits and tax credits related to medical aid contributions.

Payroll software will take care of the calculations and reporting of medical aid contributions and the PAYE effect thereof.

It is also important to keep in mind that effective 1 March 2014, employees aged 65 and older are also included in the medical aid tax credit system and their contributions may no longer be allowed as tax deductions. If you still make use of spreadsheet or manual methods of calculating PAYE, it is important to adjust your calculations to not only cater for new medical aid tax credits for the 2014/15 tax year, but also to keep in mind that you need to adjust the calculation for your employees aged 65 and older.

“Our software is designed to make your business life so much easier, so that you can focus on running your business. Let automated payroll solutions take care of the six major payroll acts and the ever-changing legislative plethora that governs payroll,” says Sumay Dippenaar, Marketing Manager at Sage Pastel Payroll & HR.

“There is no reason for businesses to rely on manual payroll spreadsheets since we offer automated solutions that are easy-to-use, smart and affordable, whether you deploy them on the desktop or in the cloud. Our subscription-based payroll solution allows you to pay low monthly fees with no upfront capital outlay, keeping your cash flow in mind.” With an online payroll solution, you only pay per payslip that you process. This pay-as-you-go model is cost-effective at R18 excluding VAT per payslip.

Example

Mr Jim Hardens is 67 years old, he earns a basic salary of R15,000 per month and the company contributes the full medical aid contribution of R1,000 on his behalf. He is the only member on his medical aid.

Below, please see how the calculation differs for tax year 2013/14 and 2014/15. Seeing that Jim is over 65 years, he also needs to be taxed on the medical tax credit system, effective 1 March 2014. Jim will enjoy a tax saving of R143.04 in the new tax year.

TAX YEAR 2014/2015
SALARY R 15 000
ADD MEDICAL AID FRINGE BENEFIT R 15 000 + R1 000 = R16 000
ANNUALISES TAXABLE INCOME R 16 000 * 12  = R192 000
TAX AS PER SARS TABLES R 192 000 – R 174 550 = R 17 450 * 25% + R 31 419 = R35 781.50
LESS PRIMARY REBATE R 35 781.50 – R 12 726 = R 23 055.50
LESS SECONDARY REBATE (FOR EMPLOYEES OVER 65 YRS) R 23 055.50 – R 7 110 = R 15 945.55
DEANNUALISE R 15 945.55/12 = R 1 328.79
LESS MEDICAL AID TAX CREDITS R 1 328.79 – R257
PAYE FOR THE MONTH R 1 071.79
TAX YEAR 2013/2014
SALARY R 15 000
ADD MEDICAL AID FRINGE BENEFIT R 15 000 + R 1 000 = R 16 000
LESS TOTAL MEDICAL CONTRIBUTION R 16 000 – R 1 000 = R 15 000
ANNUALISES TAXABLE INCOME R 15 000 * 12 =  R 180 000
TAX AS PER SARS TABLES R 180 000 – R 165 600 = R 14 400* 25% + R 29 808 = R 33 408
LESS PRIMARY REBATE R 33 408 – R 12 080 = R 21 328
LESS SECONDARY REBATE (FOR EMPLOYEES OVER 65 YRS) R 21 328 – R6 750 = R 14 578
DEANNUALISE R 14 578 / 12
PAYE FOR THE MONTH R 1 214.83
TOTAL SAVING R 143.04

 

Nifty Quick Links and Tools

>FREE Salary Tax Calculator

>FREE Online Logbook

>FREE Tax Guide

>Attend a Budget Speech Seminar, everything explained in laymen’s terms

>New Tax Rates

>Everything else you need to know

>Automate your payroll using an online solution 

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn. To read more about the upcoming budget speech, click here.

Sage Pastel Payroll & HR is creating South Africa’s first-ever live infographic and you can win R10,000 by helping to build it. The infographic displays in real time what South Africans like you are expecting to see from Finance Minister Pravin Gordhan’s Budget Speech on 26 February.

To participate, simply answer 10 easy questions on the website and then watch as our infographic grows and changes as more South Africans take part. Everyone who answers the questions will be entered into the competition. You are able to earn additional entries into the competition by sharing the competition via Twitter, Facebook, LinkedIn or you can share via email to a friend or the person paying your salary.

On budget day, you will be able to follow us for all the Budget Speech updates as it happens, real-time. We’ll give you blow-by-blow Budget Speech updates, including the most popular conversations around the Budget Speech, most popular words and key phrases that are searched for on Google on the day and you can view all the live tweets relating to the Budget Speech announcement on 26 February.

But that’s not the only way Sage Pastel Payroll & HR will help you to make sense of this year’s Budget Speech. As Minister Gordhan is wrapping up his speech, the company’s tax wizards will be working to create a range of content that will help you understand what the Budget means for you as a tax payer and as a business owner.

The Sage Pastel Payroll & HR website will feature the sudget speech transcripts, supporting documents and a handy Tax Guide for the 2014/2015 tax year. There will also be a free updated salary tax calculator where you can enter your salary, relevant allowances and contributions to see whether you’ll pay more or less tax in the new tax year. You are able to download a free online travel logbook that is SARS compliant and that allows you to keep track of your travel claims throughout the year and view a summary at the end of the tax year. All you need to do is simply enter your kilometers travelled, destination details and rate of reimbursement, easy!

If you are responsible for running your company’s payroll, you could also benefit from Sage Pastel Payroll & HR’s tax seminars. Lastly, you can make use of the free 30-day trial period to test-drive our smart online payroll solution – this solution is easy and will ensure all the Budget Speech changes are taken care of for you, allowing you to work smartly and efficiently.

Says Sumay Dippenaar, Marketing Manager at Sage Pastel Payroll & HR: “Against the backdrop of a looming national election and a difficult global economy, this is certainly going to be an interesting Budget Speech to watch. Whatever emerges from Minister Gordhan’s speech, our tools and content will help you to understand what this year’s budget will mean for you as an employee or as the owner of a business.”

Madelein van der Watt, Development Manager at Sage Pastel Payroll & HR predicts that Minister Gordhan will not surprise the country with any new taxes and that he will continue to allocate most of the personal income tax relief to lower income earners and the elderly. Sin taxes on alcohol and tobacco products as well as fuel levies are likely to go up, as has become tradition. The lion’s share of revenue allocation during this year’s budget announcement should likely go to health services, education and social grants.

FFor the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.To read more about the upcoming Budget Speech, click here.

“It is a daunting challenge for SME businesses to keep pace with regular legislative updates. However, automated payroll software ensures that the essential updates are automatically implemented and that payslip calculations are correct, meeting the latest legislative requirements,” adds Kok.

To help overcome this challenge, Kok says Sage Pastel Payroll & HR interprets legislative changes for start-up and small businesses and ensures that they remain compliant via payroll and HR software. RSS feeds provide information on and notification of legislative and tax changes as well delivering new system functionality releases that ensure companies always process their payrolls on the latest software version.

SMEs generally agree that excessive Government bureaucracy and Government handling of the country’s current economic challenges still top the list of the least favourable aspects of doing business.

The SBI established that globally business confidence is improving but in South Africa managing cash flow is the biggest challenge for growing businesses with government not helping as there remain 4.7-million unemployed, a lack of basic skills and protection of employed people while SME businesses battle with wage and payroll legislation.

Recognising the pressures on SME business in the current difficult economy, payroll and HR software specialist Sage Pastel Payroll & HR has introduced a payroll and HR software solution that businesses can obtain on an affordable subscription monthly payment plan.

SME business contributes significantly to the economic growth in South Africa so there is a need to harness entrepreneurial businesses and ensure that they succeed.

According to the SBI survey, South Africa is generally downbeat about local economic prospects with a low score of 44.10%, which is on a par with the UK and US at 40.65% and 41.53% respectively.

Mobility provides start-up businesses with agility and seeing as the owners are invariably busy managing many aspects of their business, Kok says Sage Pastel My Payroll Online is a lucrative online payroll solution for start-up companies. Online payroll solutions can be obtained on a ‘pay-as-you-go’ basis whereby businesses only pay when they use the system.

“It is important to provide South African companies with more than just a box of software,” says Sumay Dippenaar, marketing manager at Sage Pastel Payroll & HR. Telephone and email support services can assist users with payroll, legislation and process enquiries. “Businesses should opt for a payroll provider that offers a national footprint of certified payroll software installers to ensure they benefit from professional installation of their payroll and HR software solutions.”

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

Spokesperson at the Sage Pastal Payroll Press Launch

Philip Meyer- Sage Pastel Payroll & HR

We live in an era where most individuals, everyday use their smartphone to call, sms, WhatsApp, Facebook you name it.

Many experts in the industry believe that global mobile internet usage is projected to overtake desktop by 2014, meaning that globally individuals will access the internet from their smartphone more than using their desktop.

Philip Meyer, technology director at Sage Pastel Payroll & HR says that the importance of applying mobile technology cannot be overestimated.

According to a South African Network Society project done at the University of the Witwatersrand in 2012, over seven out of ten Internet users use their mobile phones to go online and more people have Internet capable phones than own computers.

“Seeing that more people in South Africa have Internet access from their smartphones and other mobile devices, we first developed an Android application because it is highly popular globally and was clearly the most logical deployment,” says Meyer.

Sage Pastel Payroll & HR developed a hosted, web-based tool enabling employees to manage and maintain their own information online called Self Service.

Self Service enables employees to make applications for leave, salary advances, loans, bursaries or other financial assistance, online, no matter where they are in the world as long as they have an internet connection. Employees can view their previous months’ payslips (Self Service online only), update personal information, submit their travel claims and more.

Due to mobility taking over globally, Sage Pastel Payroll & HR kept up with the technology change by taking the Self Service functionality and making it a mobile application. The application enables employees to apply for leave, submit travel claims and update their personal details online or via their smartphone, anywhere, anytime.

For Payroll Administrators and Business Owners, there is no manual capturing of the employees’ request forms. Once approved on the smartpone, the desktop payroll software is updated automatically.

“The application is unique in that it is the first mobile payroll application developed by a South African company enabling employees to apply for leave, submit travel claims and update personal details anywhere at anytime.”

According to Duncan Alfreds from News24, an international survey by research firm Gartner has revealed that Google’s mobile operating system overtook Microsoft’s Windows as the most common operating system in 2012. Android will soon become the most globally dominant operating system, research has revealed. Gartner adds, “As mobile becomes the growing segment in consumer devices, we see the installed base of devices growing but also a shift toward Android.” (Source – News24, April 2013)

Meyer says the mobile application is available in a mobi site environment and applications for iPhone and Blackberry smartphones and Windows Mobile are now being developed.

“The mobile application eases the pressure on HR departments, allowing them more time to concentrate on important areas such as staff wellness, efficiency and training instead of wasting hours on capturing leave forms, dealing with HR data-related queries or distributing payslips. It also makes services more accessible to sales and services employees who are frequently out of the office visiting clients,” concludes Meyer.

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

All RSA companies are required to submit their SARS interim PAYE reconciliation that is due from 01 September – 31 October 2013, including their employee tax certificates and EMP501 reconciliations for the period 01 March to 31 August 2013.

Employers also need to ensure they make use of the latest SARS e@syFile software release, which they can download from the SARS website, www.sars.gov.za. Without downloading the software companies will not be able to successfully submit their interim PAYE reconciliations and transfer the data electronically to SARS.

Philip Meyer, technology director at Sage Pastel Payroll & HR, says 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 SARS 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 will be penalized.

Companies using an automated payroll software solution can obtain employee tax reference numbers via bulk ITREG functionality and the e@syFile Employer system to simplify the reconciliation.

Another important requirement for companies is to comply with new legislation pertaining to employees making use of company vehicles leased by their employer. Meyer says the fringe benefit value is the rental contract plus the fuel cost for the month. However, the rental contract must be classified as an operating lease.

“New source codes were also introduced in the event that the employer pays a lump sum to the family of a deceased employee. The first R300 000 of the lump sum is tax free but the portion exceeding R300 000 is taxed by way of a SARS directive and the lump sum must be reported against code 3922 and the PAYE on the lump sum must be allocated to code 4115.

Meyer adds that companies can receive step-by-step assistance from a SARS Contact Centre agent through the SARS Help-You-eFile, a service innovation introduced by SARS to give companies access to SARS contact centre agents online.

“Use of a reputable payroll software system will result in a smooth interim PAYE reconciliation, as the software will automate the reconciliation process for the company. Some payroll solutions require only that users load their employees’ information and payslips. Therefore no manual calculations are required so that companies simply upload the file to e@syFile.”

For the latest legislative news, connect with Sage Pastel Payroll & HR on Twitter (Payroll News), Facebook or LinkedIn.

With the official launch of the Tax season on 01 July 2013, taxpayers once again need to file their tax returns within the SARS deadlines if they are to avoid fines or penalties.

Manual returns must be posted or delivered to local SARS branches by 27 September 2013 while non-provisional taxpayers may use SARS eFiling until 22 November 2013. Provisional taxpayers have more time and may submit electronic returns via eFiling until 31 January 2014.

Philip Meyer, technology director of Sage Pastel Payroll & HR, encourages taxpayers to start getting their tax documentation into order as soon as possible.

“They should start gathering proof of contributions to Retirement Annuities or private pensions and medical schemes, investment income, dividends and lump sum payments as the earlier the return can be finalised and submitted, the better. Rather be well prepared and avoid the stress that accompanies the last-minute rush.”

Taxpayers receiving remuneration of less than R250 000 may choose to not submit an income tax return. However, they need to meet the following criteria: their remuneration must be from a single employer and for a full year of assessment (1 March 2012 to 28 February 2013), no allowance was paid from which employees’ tax was not fully deducted and no further deductions need to be claimed or income declared.

SARS announces its tax season every year and it is during this period that individuals must submit their annual return.

On Monday (01 July 2013) the individual tax filing season was launched by SARS and on the first day,  the SARS eFiling website struggled to handle the volumes of eFilers logging in to file tax returns.

“Thousands of returns were filed on Monday and the volume may have caught SARS by surprise. Traditionally, taxpayers prefer to wait until the last few days of the filing season to get their tax returns done and this is normally the time we expect the eFiling website to start stumbling under the pressure,” said Meyer.

SARS has acknowledged via their website that they are aware of the technical difficulties being experienced by eFiling and that their technicians and service providers are investigating the network issues.

If you want to confirm whether you are one of the individuals exempt from filing this year, access the following link from the SARS website, http://bit.ly/15a37Gp

SARS has adopted a more user-friendly approach and has published a Tax Season 2013 electronic guide that can be easily accessed on the SARS website www.sars.gov.za enabling an electronic version to be quickly downloaded.

Taxpayers are being offered SARS assistance with their returns through a number of channels to ensure that tax returns are submitted accurately and on time with minimal effort. A Help-You-eFile service has also been launched by SARS.

“The Help-You-eFile service provides taxpayers with access to contact the call centre agents while the taxpayer is online. Agents are able to see what taxpayers are doing and can assist with the completion of the tax return,” says Meyer.

SARS also caters for mobile technology, enabling individuals with mobile devices to file their returns from their smartphones and tablets.

“Taxpayers will also be able to view eFiling videos on YouTube that demonstrate how to register for eFiling, complete and submit the IRT12 tax form, accompanied by supporting documents if these are required. SARS has said that eFilers will receive their ITA34 assessment and statement of account within a few minutes of submitting the return.”

Finally, taxpayers who may have forgotten their eFiling login or password will be able to request their login name and reset their password.

For the latest legislative news, connect with Sage Pastel Payroll & HR. on Twitter (Payroll News), LinkedIn, Facebook.

Philip Meyer

Philip Meyer

Connected Services enables SME companies to extend their desktop payroll with an online solution that eases the growing burden of HR managers and payroll administrators.

Connected Services includes a web-based self-service tool that enables employees to manage and maintain their own information online, thereby carrying some of the overall HR administration responsibility. They are able to make online applications for leave, loans, bursaries, travel claims, view their payslips and update personal information no matter where they are so long as they have an internet connection.

The adoption rate of online business software for new entrants into the market is increasing, posing the question of how to bridge the gap between the growing trend towards online software adoption and the traditional desktop application users in the same market segments.

The advantages and conveniences of connected services assist with expediting the many benefits of dual-deployment business software models such as client-side hosted applications with significant connected services capabilities and functionality, together with a seamless upgrade path to ultimately complete cloud-based models facilitated by vendors.

Connected Services has workflow capabilities based on the organisation chart or specific workflow orders per online form. Once an employee applies for leave online and it is management approved, the payroll & HR systems are automatically updated. The software also provides for leave scheduling, particularly practical over traditional December holidays when “skeleton staff” is required. The programme helps to manage minimum staff levels by providing system warnings.

When applying a connected services solution such as Self Service, companies should consider a hosted solution.  This guarantees quick deployment at low implementation cost, meaning companies do not have to invest in additional infrastructure to host the online application. All a company needs is an internet connection and a computer.

Frictionless (automated) payroll legislative updates
Frictionless updates are another example of connected services. This functionality enables traditional desktop applications to seamlessly update over the internet with minimal intervention from the end-user of the software.

Users no longer need to visit a website to download and install updates or CD versions manually as the connected services functionality does it all for them, directly from their payroll software. The days of CD-based updates and disruptive installation and implementation cycles are over.

RSS Feeds within payroll software
Another component of Connected Services allows HR managers and payroll administrators to receive RSS feeds to their desktops notifying them of legislative and tax changes as well as new system software releases so that the company is always on track and up to date.

The internet and, more specifically, cloud-based and online business applications constitute some of the most compelling opportunities for streamlining the way business is now conducted. It is reassuring that the optimisation of internet capabilities will almost certainly not amount to a one-size fits all model.

It is rather the incremental evolution of traditional desktop software, leveraging the internet where it is appropriate and business enhancing, that is playing an important role in the evolutionary shift to complete cloud-based business software provisioning, billing and deployment. This is providing a flexible and extensible migration path to the cloud, taking into account preferences of individual business requirements, as will pure cloud-only offerings.

Reduce payroll fraud and bank rejections with automated payroll software
Opt for a payroll vendor that can offerID number and bank account validations, as well as Employee Credit Checks and the delivery of secure salary EFT payments directly from the payroll software.

Companies need to take steps to avoid paying fake employees and can reduce payroll fraud and bank rejections, ensuring that they avoid stalling when processing salary payments. By combining monthly employee ID Number validation and verification with monthly bank account validation and verification together with secure payment services, companies  ensure that not only are they paying the correct employee through the correct bank account, but also that the payment is expedited in the most secure manner possible.

By validating and verifying the ID Numbers on the payroll, companies create complete peace of mind in the knowledge that not only has their employee provided a valid ID Number but also that the ID Number has been verified as belonging to the associated employee and is recorded on the Department of Home Affairs list of official ID Numbers. This eliminates both fake ID Numbers as well as ID Numbers not associated with the given employee.

With secure salary EFT payments, payment batches can be created automatically within a payroll system without creating the infamous “text files” which on some payroll systems needed to be stored on the hard drive of the Payroll Administrator’s computer and then forwarded or transferred to the authorised user of the banking software for transmission to the relevant bank. Avoiding editable payment  text files improves efficiency and eliminates yet another potential area for payroll fraud, ensuring a tamperproof payment is imported into the banking software.

By performing credit checks on employees, companies and Human Resource managers are provided with valuable information on existing and potential employees including judgments, defaults, notices / alerts, fraud listings / indicators, marital status spouse details and all residential address details. Reports can sourced from the three main credit bureaus in South Africa, namely TransUnion, Experian and XDS.

For more information on in-payroll software ID Number and Bank Account validation and verification services, contact Sage Pastel Payroll & HR and enquire about their Sage Pastel Connect Module.

For the latest legislative news, connect with Sage Pastel Payroll & HR. on Twitter (Payroll News), LinkedIn, Facebook.

Companies need to ensure that they are geared to provide SARS with their annual PAYE reconciliation submission before the end of May.

The first step companies should make is to ensure that they download the latest version of the e@syFile™ Employer system which has been loaded on the SARS website www.sarsefiling.co.za.

“It is most important that companies download and install this software before conducting their PAYE, SDL and UIF reconciliations to ensure accuracy and compliance with SARS requirements,” says Philip Meyer, technology director  at Sage Pastel Payroll & HR.

While SARS will not reject tax certificates that do not have an income tax number, the e@syFile™ Employer system will issue the submitting company a message declaring that penalties can be raised on the employer as a result of the missing information.

Meyer stresses that employers must confirm that the company will comply with the SARS penalties procedure before their companies are able to continue with their reconciliation and submission.

“SARS has also increased employer penalties applying to employee tax certificates that do not have a registered tax number. So it makes financial sense for companies to ensure that they register all unregistered employees with SARS before they submit tax certificates for reconciliation. Even employees that are below the tax threshold need a registered tax number,” adds Meyer.

Companies wanting to register employees for a tax reference number can either go into a SARS branch, or can log onto the e@syFile™ Employer system and load their employees manually. To follow the verification status of the tax reference number, companies can use the ITReg functionality of the e@syFile™ Employer system and follow a synchronisation process to obtain a CSV file with their employees’ tax reference numbers.

“However, companies using an automated payroll software solution can obtain employee tax reference numbers via the Bulk ITREG functionality and the e@syFile Employer system to simplify the reconciliation. Those using automated payroll solutions need only capture employees’ information and their payslip details,” adds Meyer.

During the year end procedures, the electronic tax certificates are generated automatically in the IRP5.13 file. This file can be imported directly into the e@syFile™ Employer system and the payroll EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliations. Meyer points out that this saves businesses considerable time and cost compared to manual calculation and capturing.

“Payroll departments should not issue tax certificates to their employees until they receive notice from SARS that the reconciliation is both complete and correct.”