SME companies should brace themselves for the first bi-annual PAYE tax reconciliation process, which starts tomorrow (1 September) and closes at the end of October 2010.
“It is important that companies bear in mind that the bi-annual submission is completed for reconciliation purposes only. Payroll departments should not issue the tax certificates to their employees,” said Grant Lloyd, managing director at payroll and HR software specialist Softline Pastel Payroll.
SARS will also release a new version of its online e@syFile system tomorrow. Lloyd adds that companies must download and install the new e@syFile version as soon as possible and then upload and submit on e@syFile their electronic IRP5/IT3(a) tax certificates together with the EMP501 Reconciliation Declaration for the period 01 March 2010 to 31 August 2010.
“Hopefully SME companies ensured that their preparations for these compulsory electronic submissions with full employee tax details received serious attention and that their houses are completely in order for this first ever bi-annual PAYE reconciliation,” said Lloyd. “They were warned by SARS earlier this year. Those with automated payroll systems should be able to embrace this new process without major difficulty,” added Lloyd.
SMEs will be able to finalise their bi-annual employee reconciliations up until 31 October. In effect, they have two months to complete this process. Employers who have automated payroll software systems will find it simple to execute as they need only capture employees' information and their payslips.
During the reconciliation process automated payroll software ensures the electronic tax certificates are generated automatically in the IRP5.11 CSV file. This file can be imported directly into SARS e@syFile. The EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliation declaration on SARS e@syFile can be generated for the period 1 March 2010 to 31 August 2010 directly from your payroll software. This saves businesses considerable time and cost compared to manual calculation and capturing.
Lloyd said SARS will not reject tax certificates without individual income tax reference numbers so e@syFile will accept them. Information relating to these particular employees will, however, be sent to SARS, so that they can be validated and then registered for income tax if they have not yet been registered.
SARS will return all outstanding individual income tax reference numbers to employers before February 2011 to ensure that final tax certificates are populated with the employees' income tax reference numbers. This process will be completed for all employees, regardless of their annual earnings.
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Softline Pastel Payroll
Softline Pastel Payroll, a member of the Softline group, is the leading developer of payroll and HR software solutions and services in South Africa. Skills, experience and innovation in this field accumulated over more than 20 years in business confirm Pastel Payroll's leading position in the SME market. Pastel Payroll provides a wide range of software solutions from start-up to medium as well as large sized enterprises. Easy-to-use, feature-rich and flexible payroll and HR software ensures businesses are kept up-to-date and fully compliant with changing legislative and SARS Employer Filing Submission requirements. Let our payroll and HR software do it all for you.
The Sage Group
The Sage Group is a leading global supplier of business management software solutions and related products and services, principally for small to medium-sized enterprises. Formed in 1981, Sage was floated on the London Stock Exchange in 1989. Sage has 5.8 million customers and more than 14 500 employees worldwide. We operate in over 26 countries covering the UK, Europe, North America, South Africa, Australia, India and China. For further information, please visit http://www.sage.com.
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