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On 15 April 2016 the Commissioner for the South African Revenue Service (SARS) announced the due dates whereby employers are required to finalise and submit their annual and interim Employer Reconciliation declarations to SARS.

The notice, published on 15 April 2016 in Government Gazette No. 39922, determines that:

  • the annual declarations for the period 1 March 2015 to 29 February 2016 are to be submitted by 31 May 2016; and
  • the interim declarations for the period 1 March 2016 to 31 August 2016 must be submitted by 31 October 2016.

The above declarations are done by way of completing and submitting the prescribed EMP501 form to SARS. The form comprises a summary and reconciliation of employers’ pay-as-you-earn obligations, skills development levies due and the unemployment insurance contributions paid or obligations incurred during the periods mentioned above. Completion of the annual Employer Reconciliation also allows the employer-taxpayer to generate an IRP5 certificate to be issued to each employee of the employer, used by him/her to complete their annual income tax returns.

The annual declarations deadline is especially looming. Every year, this deadline is one that many employers miss and it would therefore be prudent to take note of these deadlines now already and plan accordingly. The importance of the declarations, not only for use by SARS, should not be underestimated, also since the information captured here as part of the annual declaration will affect employees when submitting their annual income tax returns later this year.

Quite often, delays on employers’ part in completing the declarations (or even completing these inaccurately due to time constraints and leaving this task until too late) may lead to immense frustration on the part of employees. This since employees may then be either unable to complete income tax returns themselves (due to no IRP5 being captured by SARS), or in the case of inaccuracies on the reconciliation become embroiled in disputes with SARS due to the inaccurate information captured on the employees’ profiles. This will in turn lead to increased costs on the employees’ side to engage SARS to correct this (often through appointing a tax professional), as well as delays in any potential refunds due to them.  All this as a direct result of the failure on the part of the employer-function tasked with attending to this statutory obligation in a timely and accurate function, which illustrates why meeting the above deadlines needs to be prioritised and taken extremely seriously.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)

Due dates published for submitting annual and Interim Employer Reconciliations
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