Companies that do not meet the South African Revenue Services 30 May deadline for the submission of all employee tax certificates and the final EMP501 reconciliation declarations face hefty penalties.
The EMP501 reconciles all PAYE, SDL and UIF deductions from employees and provides the total of all remuneration paid to all employees. "The EMP501 is a critical return," says Grant Lloyd, MD of payroll and HR software developer Softline Pastel Payroll. "Not only will employers face penalties, their employees will not receive their personal income tax returns."
Penalties for late submission of the 2009 tax year EMP501 will be calculated at 10% of the total amount of employees' tax deducted during the 2009 year of assessment. "This will be a significant amount and companies should ensure that they meet the deadline."
The personal income tax returns for employees can only be issued once they have been pre-populated with the electronic data submitted on e@syFile by their employers. Personal income tax returns can be filed from 1 July 2009 until 20 November 2009 on eFiling and manually before 18 September.
Lloyd adds that SARS also launched e@syFile Version 2 at the beginning of April and employers are required to upgrade the existing e@syFile installations to Version 2 before they reconcile their 2009 PAYE, SDL and UIF liabilities in the EMP501.
A new EMP701 return was issued with the release of e@syFile Version 2 and this will assist employers to process adjustments on the previous year's EMP501 reconciliation declarations.
"Automated payroll software streamlines the PAYE, SDL and UIF calculations and the employee remuneration reconciliation process for companies, eliminating the frustration of tedious tasks and saving thousands on hefty SARS penalties."