The Annual EMP501 Reconciliation Submission period is from 1 April 2024 – 31 May 2024.
Employers are required, twice a year, to reconcile their IRP5 / IT3(a) tax certificates; the EMP201/EMP501 statements; and the actual payments made to SARS, by using the e@syFile software provided by SARS. The February EMP501 reconciliation will reconcile the values for the entire tax year of 1 March 2023 – 29 February 2024 and will generate tax certificates for all employees on eFiling.
Please note that the Paymaster’s csv file is only compatible with e@syFile and not eFiling.
1 March is the day
From 1 March, you will be rolling over into the new tax year. Most payroll systems now “lock down the old tax year” and you can no longer change any of that information. So sort out any issues before the tax year-end. You really don’t want to start having to open the payroll to change earnings or deductions or add information once 7 March has come. Remind all your employees who have company cars or car allowances to record their mileage first thing on 1 March. Make sure all the details of the vehicle are recorded on the payroll. They will need to upload their log book or make sure that the logbook is complete for the tax year.
8 Steps to Complete the EMP501Submission
How to reconcile
Reconciliation involves matching all tax due (liabilities) with all tax paid and checking these against the total value of all tax certificates issued. These three (3) amounts should all be equal. The reconciliation process only relates to the tax paid and not additional tax, penalties or interest.
Reconciliation steps for employers:
Step 1
Before completing the EMP501 (for interim and annual submission), determine the total income of each employee for that year, and recalculate the tax based on that amount. IRP5/IT3(a) certificates should reflect the income, deductions and tax as calculated at this point.
Step 2
If the recalculated liability according to the tax certificates is different to the EMP201s previously declared, it will need to be determined in which month(s) these differences occurred.
Step 3
Capture all the relevant demographic information in the Business Information and Contact Details sections.
Step 4
Capture all the monthly liabilities for PAYE (before ETI deduction), SDL and UIF using these revised figures in the Financial Particulars section on the EMP501 (i.e. where different, the liabilities inserted on the EMP501 should be the final calculated liabilities rather than the liabilities declared on the EMP201).
Step 5
Capture the total monthly payments made in respect of PAYE, SDL and UIF but excluding payments made in respect of interest and additional tax. These are the actual payments made to SARS throughout the year – no recalculations are needed.
Step 6
Calculate the totals and difference fields (If using e@syFile™ Employer simply click on the self-assess button in order to populate all the totals and difference fields for you).
Step 7
Employers must calculate the SDL and UIF totals and capture the values. If the SDL and UIF contributions are not on the certificates this value must be calculated and completed.
Step 8
When settling any shortfall reflected in the reconciliation, the payment must be allocated to the period(s) in which the shortfall occurred. If the relevant period cannot be determined, the payment should be allocated to the last active period within the transaction, which is August (interim) and February (annual).
Make sure to check out our helpful EMP501 submission video guide to assist you throughout the reconciliation process and ensure a smooth tax year submission.
We can handle the entire submission process on your behalf
We simply will require the following from you :
- A breakdown of all of your PAYE, SDL and UIF payments per month between March 2023 and February 2024
- Contact Paymaster for expert help.
If this feels to overwhelming, consider joining the many happy Paymaster clients. Contact our Helpdesk for additional information.
