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New taxation rules for your payroll systems

Ian Hurst

The new tax year has arrived and your payroll systems should've already rolled over onto the new taxation rules. Most payroll systems now 'lock down the old tax year' and you can no longer change any of that information. You should've had these issues sorted out before the end of last financial year as opening your payroll systems to change earnings, deductions or add information once March is already up and running is tedious. Here are five tasks that will make applying the new taxation rules to your payroll systems easier.

Task#1: All your employees' details must be complete

Check that all the information the receiver requires, for all employees, is correct and complete.

Task#2: Perform all reconciliations plus submit and pay Sars all payroll deductions

Reconcile all EMP 201 payments made to the receiver of revenue to the figures declared on your monthly EMP 201 form you submit to Sars because these must balance. If the figures don't balance:

  • Correct the issue as soon as possible, or
  • Make a note of why there's a difference so you can explain it on your annual submission.

The best way to check these balances is by using the EMPSA form:

  • This shows the actual payments that have been recorded for the year.
  • It can be compared with the year-to-date totals from your payroll system.
  • If this form balances, the EMP 501 reconciliation on e@syfile shouldn't be a problem.

Task#3: Confirm all submissions to Sars so you don't contravene any taxation rules

Make sure that Sars has received all your EMP 201 submissions and that there are no outstanding issues you need to deal with. It's always good to keep up to date with the documentation that Sars puts out so that you aren't caught out.

Task#4: Remind company car and travel allowance recipients to note their mileage

Make a note to jog the memory of all your employees who have a company car or travel allowance to record their mileage, make sure their travel logbook is complete and upload it. It's a good idea to ensure that all your vehicles' details are recorded on your payroll systems.

Task#5: Resolve any outstanding issues

Make sure that you list all the earnings and deductions under the right payroll codes. In addition, make sure you have all the information for any retirement annuity and medical aid tax deductions.

It's a useful exercise to run a test IRP 5 upload as this can show you any issues - such as negative 3601 income or negative retirement funding income - which can be corrected. This will also highlight incomplete or missing information. These all have to be corrected before e@syfilel will accept the upload file.

Ian Hurst is the owner of Paymaster Outsource and Paymaster Online Payroll Solutions. He is passionate about payroll and payroll systems, he firmly believes in the partnerships that can be created when a great software product and dedicated service people come together.