South African companies have only a few days left to submit their annual SARS reconciliations if they are to meet the 30 May deadline. If you miss the deadline or submit incomplete or inaccurate data, your business will be subject to stiff financial penalties for each month that the correct information is outstanding.
During this filing season, all South African employers must reconcile and submit PAYE, UIF and skills development levy contributions, for the period 1 March 2013 to 28 February 2014, to SARS. You must submit accurate and complete employee tax certificates as well as reconciliations of contributions for the year.
The total penalty for inaccurate or late submissions can amount to as much as 10% of the total PAYE deductions you made during the tax year, so it is imperative to meet this deadline. To ensure you meet all the requirements, follow these guidelines:
At the end of April 2014, SARS released an upgrade for the e@syFile Employer system to address various issues employers experienced during the first month of the filing season. Should you use a previous version of the e@syFile Employer system, SARS will not accept your submission.
“If you struggled to file in April due to validation errors on e@syFile, you must download the latest upgrade to solve the problems you experienced when reconciling your PAYE submissions,” says Madelein van der Watt, development manager at Sage Pastel Payroll & HR. The installation may delete your current information, so back up your data before installing the new version of e@syFile Employer.
Include Standard Industry Classification (SIC7) codes on your tax certificates
SARS requires that tax certificates include the SIC7 code for both the employer and the employee. SARS has updated SIC7 validations in the latest software upgrade.
\If your company is claiming the ETI, include the value of the ETI you have claimed for the first two months of the ETI year (January and February 2014). You will need to include a new deduction source code and comply with new validations specific to ETI. If you are using an automated payroll solution, it will generate tax certificates with the new ETI source code already consolidated and included in the CSV export for e@syFile.
If you have an automated payroll solution in place, it should automatically generate your electronic tax certificates in the IRP5.14 file format. This file can be imported directly into the e@syFile Employer system and the payroll EMP501 Reconciliation Report to complete your PAYE, SDL and UIF reconciliations.
This will save you considerable time and money over doing manual calculations and data capture when you complete PAYE reconciliations twice a year, says Van der Watt.
You also need to submit your 2013-14 return of earnings (ROE) to the Compensation Commissioner at roe.labour.gov.za before the end of May 2014 to prevent penalties and interest. Employers who need a letter of good standing from the Department of Labour should compile and submit the ROE as soon as possible.
You need to calculate each employee’s earnings up to the annual limit and separate your directors’ details before completing the Compensation for Occupational Injuries and Diseases return.
“Companies are advised to submit sooner than later, to provide them with ample time to rectify any reconciliation problems,” says Van der Watt.
