Filing Season 2021 for employers, during which they must file the annual Employer Reconciliation Declaration (EMP501), opens on 1 April 2021 and closes on 31 May 2021. The EMP501 must reflect accurate payroll information about their employees, employees’ tax (PAYE) payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March 2020 to 28 February 2021.

Making it easy

To attend to this in an easy and convenient manner we would like to draw your attention to the following important information that you need to know. This is:

  • Employers and Payroll Administrators need to download the latest e@syFile™ Employer version 1.0 which was released on 15 December 2020. This can be done via SARS eFiling.
  • Employers must submit outstanding monthly declarations (EMP201) and annual reconciliations (EMP501) to SARS prior to submitting the EMP501 for 2021.
  • Employers must register employees for income tax purposes using Single (“Individual ITREG”) and bundle IT Registration (“Bundled ITREG”) for existing tax numbers as well as new registrations available on e@syfile™ .
  • First-time job seekers can register for income tax via eFiling or on the SARS
  • Employers must issue IRP5/IT3(a)’s to employees
  • Employees need to check and verify if their details on their IRP5/IT3(a)’s are correct.

Penalties for Non-Compliance

An employer who files their EMP501 late will be penalised under the provisions of paragraph 14(6) of the Fourth Schedule of the Income Tax Act. The penalty will equal 1% of the year’s PAYE, for each month that the return is late, up to 10% of the year’s PAYE.

Criminal charges for failure to submit a return

Any employer who wilfully or negligently fails to submit a return to SARS is guilty of an offence     and is therefore liable, upon conviction, to a fine or to imprisonment for a period of up to two years. This applies to EMP201’s as well as EMP501’s.

Accuracy and on-time filing is critical

It is very important for employers to file accurate and complete EMP501’s. The information received through your submission of an EMP501 is used to populate auto-assessments  and income tax returns on behalf of your employees. Incomplete or inaccurate information will negatively affect your employees’ ability to meet their tax obligations. In practise, your incomplete or inaccurate information may result in significant delays of refunds to your employees when these refunds are due.

Should you require professional assistance in this regard do not hesitate to contact our offices.