Employer tax submission deadline looms closer

The employer tax submission deadline is looming in South Africa's rapidly changing tax environment, where the SA Revenue Services has phased out manual systems for electronic online systems.

The outcome is that automated payroll systems have become imperative for SME companies, particularly with the 'no tolerance' approach adopted by SARS. The filing season for 2009-2010 tax returns is now rapidly coming to an end with submissions closing on 31 May.

Companies that do not submit their employee tax certificates and their final EMP501 reconciliation declarations before the deadline, face hefty penalties.

Grant Lloyd, managing director of payroll and HR software developer Softline Pastel Payroll, says the EMP501 submissions are critical as they reconcile all PAYE, SDL and UIF deductions from employees and record the total of all remuneration paid to all employees.

“If the company EMP501 return is not lodged before the 31 May deadline, the company, over and above the penalties it faces, will have to deal with a situation in which its employees will not receive their personal income tax IRP5 certificates and will therefore be unable to submit their personal tax return. This could easily turn into an administrative nightmare,” says Lloyd.

SME businesses will find tax requirements can be met more quickly, easily and accurately if they use payroll software that automatically provides totals for SDL, PAYE and UIF contributions, and is also updated whenever tax and other legal parameters change within any of the six Acts that are governing payroll in South Africa.

Another option, according to Lloyd, is to outsource the payroll, a cost-effective way for SMEs. Outsourcing offers a compliant payroll administration that ensures the accuracy of payslips and submissions and frees the company to focus its resources on its core business.