NATIONAL NEWS - The South African Revenue Service (SARS) reminds employers to submit payroll information on or before the deadline of Sunday, 31 May 2020. Employers who comply fully make it easier for their own employees to fulfill their individual tax obligation.
Known as the Employer Annual Reconciliation Period, this filing and payment window for employers will form part of a single, seamless Filing Season 2020 during which qualifying employees, other individual taxpayers and trusts will be able to file income tax returns, if required, later in the year.
The data submitted should cover the transaction period 1 March 2019 to 29 February 2020 in respect of Monthly Employer Declarations submitted, payments made and IRP5/IT3(a)s generated.
This payroll data is of vital importance to SARS. Firstly, it gives a reconciled account of what amounts of tax the employer deducted from the taxable remuneration of each of its employees. Secondly, it shows what amount of tax the employer has paid to SARS on behalf of the employee. It also records other allowances that an employer pays to an employee as part of their remuneration benefits.
The Employer Annual Reconciliation process is a crucial first step in the wider Income Tax reconciliation process. It allows SARS to issue an income tax return to taxpayers who already completed the payroll information. This, together with information from other providers of third party information, makes it easier for individuals later to fulfill their own income tax obligations.
SARS is determined to ensure the compliance rate amongst the employers increases substantially during this new approach to Filing Season 2020. Companies that fail to submit payroll data on time may become liable for late submission penalties of up to 10% of the value of their payroll.
SARS highlights that during this challenging period of Covid-19, it is incumbent on every taxpayer to remain tax compliant.
Tax contributions allows government to provide the important social goods and services to South Africans, employ those who heroically serve at the frontline providing essential health, social and security services, and pay social relief to the most vulnerable in society.
SARS is also in a position to make refund payments to already distressed businesses and individuals, as well as providing the tax relief measures to save businesses and jobs.
For more details on the PAYE process and tax relief measures, employers can visit the PAYE page on the SARS website