Annual filing season has opened for employers, with the South African Revenue Service (SARS) giving companies until 31 May to submit detailed payroll and tax information of their employees.
Additionally, providers of third party information from institutions who administer medical aid schemes, retirement annuities and others also need to provide the latest and accurate information to make it easy for taxpayers who are required to file an income tax return.
“The data that must be submitted to SARS from employers should cover the Monthly Employer Declarations submitted, payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March to 28/29 February. Information submitted by third parties should cover the same tax period,” it said.
SARS said that the payroll data is of vital importance, as it gives a reconciled account of what amounts of tax the employer deducted from the taxable remuneration of each of its employees.
Further, it shows what amount of tax the employer has paid to SARS on behalf of the employee, and records other allowances that an employer pays to an employee as part of their remuneration benefits.
“Based on this payroll information and data from third parties, SARS will be able to issue an income tax return to taxpayers that is pre-populated with the relevant information for the ease and convenience of taxpayers who do not have complex tax affairs.
“For these taxpayers, filing a return becomes a simple matter of checking that all the information pre-populated on the return is correct and then submitting the return to SARS,” it said.
Employers and third parties have from 1 April to 31 May to submit their data to SARS.
In the context of the Covid-19 pandemic and the relief offered to individuals, employees and employers in distress, SARS is determined to ensure that the compliance rate amongst employers increases substantially this year.
Employers who fail to submit payroll data on time may become liable for late submission penalties of up to 10% of the value of their payroll, SARS said.
Filing season for employers runs from 1 April to 31 May 2021.
Employers are required to submit their Employer Reconciliation Declaration (EMP501) to SARS by 31 May, as well as outstanding monthly declarations (EMP201) and annual reconciliations (EMP501). To avoid penalties and interest employers must submit their annual reconciliation declarations to SARS by 31 May 2021.
Pay-As-You-Earn (PAYE) payments must be up to date and the data provided to SARS must be clean and accurate. The correct data is important so that SARS may pre-populate returns correctly and employees may submit their personal income tax returns with the correct information during the filing season for individuals.
- Employers are also required to issue an IRP5/IT3(a) to employees on time, to enable employees to submit their personal income tax returns timeously. SARS requests employees to check if their details on the IRP5/IT3(a) are correct.
- Third party data suppliers such as medical aid schemes are also required to submit accurate information to SARS and to their clients.
Tax season for individual taxpayers is expected to open on 1 July 2021, with the following deadlines:
- 31 October 2021 for branch filing;
- 4 December 2021 for non-provisional taxpayers who use eFiling and the MobiApp;
- 31 January 2022 for provisional taxpayers who use eFiling.
First-time job seekers can register for personal income tax via eFiling. It takes less than 24 hours to receive an SMS with a new tax number when applying via eFiling.