All companies, small, medium and large, have to submit their SARS interim reconciliation returns for the period 1 March to 31 August 2013 before the end of this month and, should they not make the 31 October deadline, they will have to pay penalties to SARS.
Sage Pastel My Payroll Online business manager Karen Schmikl says the legislation requires all companies to reconcile the PAYE, UIF and SDL payments they have made to SARS. Even if a company pays only one employee, the company is required to submit a return to SARS.
“It is important that companies do not issue tax certificates to employees for the interim reconciliation,” Schmikl says.
“Companies must ensure that all employees have income tax reference numbers. Even though the onus lies on the employee to register themselves with SARS, employers might face administrative penalties if the employee’s income tax reference number is not reflected on the interim submission. Companies can make use of SARS e@syFile that offers employers a tool to register employees on the SARS database.
“Should SARS receive late or incomplete submissions, the employer will be warned and might face administrative penalties.”
Reconciliation of all monthly EMP201 declarations must match the monthly payments made to SARS for PAYE, SDL and UIF. In addition, the EMP501 return must reconcile to the copies of tax certificates sent to SARS.
Schmikl adds that reconciliation can be simplified by payroll software that does the PAYE, UIF and SDL calculations on your behalf.
Opt for payroll software that can indicate outstanding employee demographic data, she advises, before you embark on the submission process. This way employers can avoid submission rejections and possible administrative penalties by SARS.
For example, all employees must have a valid address on the tax certificate. If your submission does not include the compulsory address fields on the tax certificate, some payroll systems can prompt the employer to update the relevant information. Some systems offers a full set of reconciliation reports, making the interim reconciliation easy and timeous.
“To make the SARS submission a breeze, some payroll software solutions can generate a tax certificate export file that employers can submit through e@syFile,” Schmikl says.
“If you are an employer and have not yet commenced with your preparation work for a successful reconciliation season, invest in a payroll system that allows you to upload your year-to-date financial information of your tax totals from 1 March 2013 and make use of the tax certificate export file and reconciliation report to guarantee an accurate SARS submission before the end of October 2013.”