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8 steps to reconciling your SARS employer submission

Ian Hurst

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 amounts should all be equal. The reconciliation process only relates to the tax paid and not additional tax, penalties or interest. I've broken down the reconciliation process into eight steps.

Step 1

Before completing the EMP501 (for interim and annual submissions), determine the total income of each employee for that year and recalculate the tax based on that amount. The IRP5/IT3(a) certificate 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 that were previously declared, you'll need to determine 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. 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 you're using e@syFile™ Employer, simply click on the self-assess button and this will 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 aren't 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).

Source: SA Labour News

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.