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The bi-annual company tax return season opens on 1 September 2013, and it makes sense for companies to prepare their mandatory information in August to avoid SARS e@syFile rejections and late submission penalties.
All South African companies are required to reconcile and submit PAYE, UIF and SDL contributions for the period of 01 September 2013 to 31 October 2013.

“Companies have about four weeks to prepare their submission information and update their payroll systems before performing their last payroll run in August,” says Philip Meyer, technology director at Sage Patel Payroll & HR.

“It is critical for companies to ensure that they download and install the latest version of SARS e@syFile before reconciling. Companies are advised to back up their current information on their computers prior to installing a new version of e@syFile Employer, as the installation may delete the current information.”

Another important requirement for companies is to comply with new legislation pertaining to employees making use of company vehicles leased by their employer. Meyer says the fringe benefit value is the rental contract plus the fuel cost for the month. However, the rental contract must be classified as an operating lease.

Income tax reference numbers are another important element in returns. Companies can only submit tax certificates to SARS if each employee has an income tax reference number. Submissions in which one or more tax certificates do not have the mandatory individual income tax reference number specified will not be accepted by SARS.

Companies using an automated payroll software solution can obtain employee tax reference numbers via the bulk ITREG functionality and the e@syFile Employer system to simplify the reconciliation.

Attention should also be paid to new source codes in the event that the employer pays a lump sum to the family of a deceased employee. The first R300 000 of the lump sum is tax free but the portion exceeding R300 000 is taxed by way of a SARS directive and the lump sum must be reported against code 3922 and the PAYE on the lump sum must be allocated to code 4115.