If you’re experiencing symptoms like high fever, dry coughs, chills and shivers, muscle aches and difficult breathing at this time of the year, you’ve probably caught the SARS virus. This epidemic strikes twice a year during the employer tax filing season of April/May and September/October.
Related: Filing Your Annual Tax Return
But not to worry – unlike bird flu, this condition is easily remedied by keeping your paperwork in order, meeting the submission deadlines, and following tax regulations. Here’s what you need to know to survive SARS filing season.
If you employ people, SARS is waiting to hear from you
Between 1 April and 29 May this year, all employers must submit an annual reconciliation of taxes deducted from employees for the 2015 tax year. If you miss this deadline or fail to submit accurate and complete data, you will be penalised heavily.
What are employee taxes?
Pay As You Earn (PAYE) – personal income tax that employers must withhold from employees’ salaries or wages.
Unemployment Insurance Fund (UIF) contributions – 2% of an employee’s salary or wage contributed 50/50 by employers and employees. This fund provides an income to employees who are temporarily unemployed due to illness, maternity leave, or dismissal.
Skills Development Levy (SDL) – 1% of each employee’s salary or wage contributed by the employer towards a fund that gives employers incentives to invest in training, skills development and learnerships.
When did the 2015 financial year start and end?
The South African tax year runs from 1 March to 28 February.
What are my responsibilities as an employer?
As soon as you employ someone and pay them a salary or wage, you must deduct a 1% UIF contribution from their gross earnings and match the amount from the business’s funds. If you pay someone commission only, you don’t need to deduct UIF.
If your total salary and wage expense for a year is more than R500 000, you also need to make the 1% SDL contribution out of your pocket. Then you need to calculate and deduct PAYE for each employee who earns more than R73 650 a year (2015/6 tax year).
By the seventh day of each month, you must pay the UIF, SDL and PAYE contributions for the previous month across to SARS. The payment must be accompanied by a breakdown of the amounts you calculated and has to be submitted online at www.sarsefiling.co.za using the EMP201 form.
Related: Tax Basics for Business Owners
What happens at the end of a financial year?
- Create a tax certificate for each of your employees. The tax certificate must contain personal and contact details in addition to their earnings and deductions for the period they were employed by you in the past financial year.
- Download the free SARS e@syFile software from sarsefiling.co.za and capture the tax certificate information for each employee. If you use payroll software, you can simply import the data instead. SARS’ software will run a few checks and validations and warn you of any problems on the tax certificates.
- Compile the reconciliation. Use the Employer Declaration on SARS e@syFile to capture the PAYE, UIF and SDL contributions you have calculated and paid to SARS during the past 12 months. Once these totals add up to the amounts you have declared on the employee tax certificates, you are ready to submit.
- Send SARS the final result. You can send the reconciliation in the EMP501 form and the tax certificates you have created to SARS online if you have a SARS eFiling login. Alternatively, the electronic files can be stored to a disk in PDF format and handed in at your local SARS branch with a printed and signed copy of the final recon.