Essential Reports needed for Annual EMP501 Submission

Essential Reports needed for Annual EMP501 Submission

What are the essential reports needed to generate for the Annual EMP501 Submission?

Balancing EMP201 and EMP501 Reports
Identifying Discrepancies between EMP201 & EMP501
Generating Test and Live CSV Files
How to reconcile the submission on Payroll
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Annual Leave queries driving you nuts

Annual Leave queries driving you nuts?

Annual Leave queries driving you nuts? - Annual leave under BCEA
  • 21 continuous days (or by agreement 1 day for every 17 days worked).
  • take leave no later than 6 months after the end of the leave cycle.
  • outstanding leave is only paid out when you leave the job.
Annual Leave queries driving you nuts?- Annual Leave on ESS
Annual Leave queries driving you nuts?- Annual Leave balance report
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Understanding your e_mployment status on payroll LI

Understanding the revision of tax status updates on payroll

A labour broker – someone who provides and remunerates workers for a client (for payment)

  • may or not be and in possession of an exemption certificate.
  • The Fourth Schedule allows for an exemption certificate to be issued by SARS to a labour broker (if a set of conditions is met)
  • this absolves the employers from having to withhold PAYE from payments made to the labour brokers.
  • Employers must withhold PAYE from payments made to labour brokers WITHOUT an exemption certificate.
Foreign employment remuneration requirements
  • SARS PAYE Business Requirements Specification (BRS) – any remuneration received due to employment outside of South Africa must be reported on foreign services income codes.
  • irrespective of whether a portion of that amount may qualify for exemption.
  • if a tax resident employee works outside of SA on behalf of an employer, then certain remuneration is exempt from tax (up to a limit of R1.25 million per tax year).
  • IF the following conditions are met:
  1. the employee is working outside SA for a period exceeding 183 full days in total during any 12-month period, and 
  2. for a continuous period exceeding 60 full days during that period of 12 months.
What is standard employment?
  • an employee (including a scholar or student) works for a single employer for at least 22 hours per week.
  • (excludes temporary periods of absence due to exceptional circumstances or a temporary reduction in working hours).
  • is deemed to be in standard employment.
  • should be taxed according to the progressive personal income tax tables.
Tax statuses - how does it work?
  1. The following tax statuses have been renamed to an [Obsolete] tax status in April 2022. (Please refer to release note #29380 for more information).
  • Foreign Employment (No Tax) [Obsolete]
  • Labour Broker (Not Tax) [Obsolete]
  • Standard Employment (YTD) [Obsolete]

2. In future these tax statuses will no longer be available for selection.  Tax statuses available on the payroll that pertain to labour brokers, foreign employment and standard employment include:

  • Labour Broker: Remuneration paid to a labour broker without a valid exemption certificate (IRP30) is subject to employee’s tax. The basic salary will be converted to tax code 3619 if the employee has a valid exemption certificate. If not, the tax code will be 3617 and the employee will be taxed as per the progressive tax tables.
  • Foreign Employment: Apply this tax status for a South African resident employee who earns income in a foreign country. Normal progressive tax tables will be applied but 50 will be added to all tax codes, for example, the ‘Basic Pay’ component’s tax code will display as 3651.
  • Standard Employment (Normal): The normal progressive tax tables will be applied.
  • When adding an employee, the removed tax statuses will no longer be available to select. It will therefore be hidden on screen, when applying APIs and when uploading via bulk actions.
  • Existing employees linked to these removed tax statuses, will display blank in the tax status field.
  • The tax calculation and reports will still apply the tax status in the database.
  • When the user edits the screen, they will need to select a new status from the available list.
  • When accessing the information via APIs and bulk upload, the tax status of the employees linked to the removed tax statuses, will still display. However, when attempting to upload, an error will be returned, since the value does not exist.
  • Validate APIs if necessary.
  • Existing employees linked to an obsolete tax status should be converted to any of the available tax statuses.
  • If an employee’s tax status is changed in the middle of the tax year, a tax recalculation will take place.
  • If the newly selected tax status should be applicable from a specific date, terminate the employee on the Tax Profile screen and reinstate in the next open run selecting the option, Reinstate Starting a New Record.  As a result, the employee will receive separate tax certificates based on the two tax records in the tax year.

Please contact your Paymaster payroll administrator if you need more advice regarding these revised tax statuses. Email us at outsourcepayroll@paymaster.co.za

Articles main 2024 - 1

EMP501 Reconciliation Prep: Five Must-Do Tasks

Articles main 2024 – 2

Please check that all the information required by the receiver of revenue is correct and complete for all employees. So you will want to draw a report from your payroll system listing the following:

a)      Address of the employee

b)      Banking details of the employee

c)      Identity number or passport number

d)     Tax reference number

Reconcile all tax payments made to the receiver of revenue to the figures declared on the EMP201 form submitted to SARS. These must balance. If they do not balance you need to correct the issue as soon as possible, or make a note of why so that you can explain the differences on your annual submission. The best way to do this is to get the EMPSA from SARS. This shows the actual payments that they have recorded for the year. This can be compared with YTD totals from the payroll system. If they do not tie up then a correction can be made with the February EMP201. This means that the EMP501 reconciliation on Easyfile should not be a problem.

Check to make sure that SARS have received all your EMP201 submissions and that there are no outstanding issues that need to be dealt with. It is always a good idea to keep up to date with SARS documentation.

Articles main 2024 – Keep up to date with SARS

Remind employees with company cars or car allowances to record their mileage from 1 March. Ensure company car details are accurately recorded in the payroll system.

Make sure that all the earnings and deductions are listed under the right Payroll Codes (a list is available on the SARS website). In addition, make sure you have all the information for any retirement annuities you have been processing.

It is a useful exercise to run a ‘test IRP5 upload’ as this can show any oddities like negative 3601 income and negative non-retirement funding income which can be corrected in the February payroll. This also throws up incomplete addresses, business telephone numbers, retrenchment payments without directive numbers etc. These all have to be correct before Easyfile will accept the upload file.

For any assistance or queries, don’t hesitate to contact our Helpdesk at help@paymaster.co.za

Wishing you a smoothe and successful submission period!

Articles main 2024 - Leave - what are you entitled to?

Leave – what are you entitled to? Skillmaster’s HR Law Series explains!

Skillmaster’s HR Law series covers all Acts (including the BCEA) to empower you. From knowing ordinary hours of work to managing leave pay and sick leave policies, our course provides clarity and practical solutions.

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Articles main 2024 -  Unreasonable working hours?

Unreasonable working hours? Skillmaster’s HR Law series will empower you

  • Ordinary hours of work
  • Annual Earnings Threshold
  • Temporary employment services.
  • Those struggling to balance their workload within ordinary hours.
  • If you’re worried about meeting the Annual Earnings Threshold for fair pay.
  • Are you confused about your rights as a temporary employee?

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Articles main 2024 - Tax Year EMP501 guide 2024

1 March tax year-end filing: EMP501 guide

The Annual EMP501 Reconciliation Submission period is from 1 April 2024 – 31 May 2024.

Step 4

Step 6

If this feels to overwhelming, consider joining the many happy Paymaster clients. Contact our Helpdesk for additional information.

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