EMP501 Reconciliation to Reflect 2020 SDL Holiday

Background

As part of the government’s efforts to assist the cash flow of employers during the initial 2020 Covid-19 lockdown months, provisions were added to the Disaster Management Tax Act to relax payment of SDL to SARS for the period of 1 May 2020 to 31 August 2020 (the “affected months”).

SimplePay followed the guidelines from government, which stated that the correct way to record this payment holiday would be by replacing the 1% percentage in the SDL calculation by 0% on the monthly EMP201’s as a temporary change for the 4-month period. We also followed this change through to our bi-annual filing documents (EMP501 and tax certificates).

Declaration to Reflect SDL Holiday

With filing season open, SARS have identified that some employers are submitting EMP501’s and tax certificates with SDL recorded for the relief period, when it should be nil. As a result, the reconciliation process automatically flags SDL as payable for those months and thus overdue, which then results in interest and late payment penalties being incorrectly levied against the employer.

Last week, we notified you that SARS has flagged this issue and has requested that employers double check their SDL figures when completing the reconciliation. Although we were confident that this would not be an issue for most of our customers, we chose to pass the notice on, to cater for any customers who do not make use of the filing documents generated by SimplePay (e.g. those who outsource submissions).

We apologise for any concern that this notification may have caused. Our development team have run additional tests on customer data and we would like to assure you that the SDL is recorded correctly on the EMP501 and tax certificates generated by SimplePay.

You can confirm this by opening the PDF version of your EMP501, where you’ll see the SDL values for May to August as zero under the SDL heading.

Credit for Payments Made

If, despite the correct declaration of 0%, you in fact paid the SDL to SARS for the affected months, the SDL amount paid will be indicated as an unallocated credit on your statement of account. The SDL for this period will again be declared as 0% on your 2021 EMP501 reconciliation as well as the IRP5/IT3(a) certificates.

If you have any questions on any of the information provided in this blog and how it further relates to SimplePay, you can contact us at [email protected]

Keep well and stay safe.

Team SimplePay

April 20, 2021

Submission Channel Consistency Requested for 2021 Employers Filing Season

In a previous blog post, we discussed the opening of the 2021 employers filing season which runs from 1 April to 31 May 2021 and many employers should now have submitted or be in the process of finalising their filing for 2021.

An important point to note concerning your filing is that SARS requires that employers be consistent in the submission channel used to submit their EMP501 reconciliation and tax certificates for a particular filing period. For example, where an employer submitted their EMP501 reconciliation through SARS eFiling for the August 2020 interim submissions, the employer must not revise their first submission through SARS [email protected], or vice versa.

Error Reports

As part of the filing process, SARS will recalculate the PAYE and SDL payable for each employee from the amounts which are reported on the submitted tax certificate.

SARS will then compare the amounts they calculated against the PAYE and SDL amounts that are stated on that tax certificate where there are any significant differences between the two amounts, SARS will issue an error report with details of the tax certificates that have differences.

These error reports will be sent via the same channel that the employer used to submit the EMP501 and the tax certificates. For example, where an employer has submitted their EMP501 reconciliation through SARS eFiling, the error report will be sent to them via the SARS eFiling portal only and will not be accessible via other means.

Re-submission of Tax Certificates

In line with the above principle, corrections to the certificates must only be resubmitted using the same channel that was used for the initial filing.

Changing Submission Channels

You will have the option to use a different submission channel for the next filing period but must again be consistent during that filing period in making use of the same channel for any resubmissions.

If you have any questions on how the information provided in this blog relates to SimplePay, you can contact us at [email protected]

Keep well and stay safe.

Team SimplePay

April 12, 2021April 15, 2021

TERS Phase 2: Non-Sectoral Claim Applications

In our previous blog post covering the COVID-19 TERS initiative, we introduced Phase 2 of the initiative and discussed the requirements for making an application for relief on behalf of an employee for the first period, under Claim Code 1. In today’s blog post, we will cover the process relating to claims under the remaining codes (2, 3 and 4), for which applications officially opens on 13 April 2021.

One of the notable highlights of the State of the Nation address earlier this year was the announcement of the extension of the COVID-19 TERS relief scheme from 16 October 2020 to 15 March 2021. This ‘Phase 2’ of the COVID-19 TERS relief scheme is split into two payment iterations which will focus on claims based on loss of income during two specific periods.

The first period is between 16 October to 31 December 2020; and

The second period is between 1 January to 15 March 2021.

Only claims for the first period are currently being accepted by the UIF and claims relating to the second period will be dealt with at a later date.

New Verification Requirements Added

In order to claim for an employee falling under Claim Code 2, 3 or 4 the TERS online portal will require you to complete a new two step verification process. A detailed explanation of each of these codes can be found here.

The verification process revolves around the requirements set out in the guideline on the submission of COVID-19 related health data from workplaces to the National Institute for Occupational Health (NIOH), which places the legal obligation on all employers to collect and report data on certain categories of employees to the NIOH. The UIF have decided to use the registration and submission of this data to the NIOH by the employer as a means of verification for the processing of non-sector based claims.

Employers who are not registered with the NIOH will be unable to proceed with a claim under Claim Code 2, 3 or 4..

To register with the NIOH you are directed to visit their website to complete the registration and employee declaration. At least 4 days should be allowed between receipt of your Business ID, upon successful registration, and returning to the TERS portal to lodge a claim.

Claim Process

All claims will be lodged via the UIF online portal and, irrespective of claim code, you will be required to upload the following documents:

Signed approval / acceptance letter;

Bank Confirmation Letter (current);

Proof of payment to employees for previous benefits claimed & received for the prior period (e.g. EFT, payroll report, pay recon);

Refund to the UIF (if applicable); and

Letter of authority

(these are the same documents required for previous TERS applications)

If you intend making a claim on behalf of an employee falling under Claim Code 2, 3 or 4 you will be required to complete the two step verification process:

Step 1: Verification of Employer Registration with NIOH

You will be asked to confirm (via dropdown) your registration with the NIOH and also that you have declared your affected employees.

Step 2: Verification of Employee Declaration with NIOH

You will be required to individually capture the details of each affected employee, whose ID/Passport/Asylum seeker number will be verified against those in the NIOH database.

Important Areas to Note When Applying

Lockdown Period

Benefits will be calculated by the amount of days claimed within the designated lockdown period, which is from 16 October 2020 to 31 December 2020. Any dates which do not fall within this range will not be accepted.

Monthly Salary

Regardless of the lockdown period being claimed (even if for the full two-and-a-half months’ lockdown period) you must only enter the normal monthly salary for the employee. DO NOT alter/extrapolate this value to meet the cumulative lockdown period.

Remuneration earned for hours worked (excluding leave income and advance)

Unlike monthly salary, this column must reflect the full lockdown period’s cumulative remuneration. The remuneration earned for the entire period must be stated but all advances, ex gratia payments, or income related to annual or other leave must be excluded.

Although Phase 2 of the COVID-19 TERS initiative is seen as an extension of the previous relief program, it is important to note the key differences in Phase 2 relating to who the benefit is actually aimed at. Each specified Claim Code has its own identifying factors and criteria which must be strictly adhered to. This undoubtedly limits the applicability of the initiative this time around and greatly reduces the potential beneficiaries of the relief.

The UIF can be contacted directly on 0800 030 007 for general queries on this issue as well as the lodging of disputes relating to an application. Greater detail on the process can also be found in the UIF’s correspondence sent to employers.

If you have any questions on how the information provided in this blog relates to SimplePay, you can contact us at [email protected]

Keep well and stay safe.

Team SimplePay

April 1, 2021

TERS Update: Appeals Process and Manual Bank Verification

Next week, on 6 April 2021, the UIF is due to open its appeals process for refused applications for the two extended TERS periods. (Read more about these periods here).

A common reason for applications being denied on the TERS portal is due to companies being registered with the wrong or no sector classification (SIC code). As eligibility is limited to certain sectors, a check is run against the SARS database. Unfortunately updating your SIC code with SARS will not fix this issue; instead the UIF has released an appeals process.

Appeals Process

If having received an error message, you believe this to be incorrect and that you are eligible to apply for the two TERS periods, the appeal process is as follows:

From 6 April, you can call the UIF hotline (0800 030 007) to lodge an appeal
The operator will verify your identity and send you a link to upload your appeal documents (see below).
Having uploaded your appeal documents, the UIF will review them and make a decision on your appeal.

The appeal documents are:

The Proforma (“COVID-19 TERS Extension – Motivation for Inclusion proforma” attached to UIF email, dated: 29 March 2021) – In this, you can detail why your business is part of one of the restricted sectors eligible for the extended periods, and how the COVID-19 regulations have affected your employees’ ability to work their normal hours.
Supporting Documents – The proforma should be substantiated by supporting documents to show you practice in the SIC code stated.

The UIF aims to make a decision and inform you of the result of your appeal within 5 working days. Thereafter you should be able to log onto the TERS portal within 72 hours to reapply. When you do this make sure you:

Select the same business activity as you did previously; and
Select “OTHER (APPROVED APPEALS)” on the main division sector.

The application should be the same as for previous periods and is detailed in this earlier blog post.

Bank Verification Process

The UIF has started reaching out by telephone to employers who have been unable to pass the automated bank verification process. If you have experienced such issues please stay vigilant for a call.

To carry out the verification, the UIF will first ask you 5 security questions, before asking you to provide your latest bank confirmation letter (which must be dated within the last 3 months). This will be used to verify the following for comparison with the portal:

CIPC Number
Banking details
ID number
Trade Name

The UIF did not state in its letter how the confirmation letter is to be provided to them, but this should become clear when you are called. They anticipate a turnaround time of 14 working days.

We hope that this information has proved useful to you. If you have any questions on the above information you can contact the UIF on 0800 030 007. If you have any questions for SimplePay, you can reach us at [email protected]

Equally, if you are not yet a client of SimplePay but would like to be, why not check out our website? Or, better yet, try out our service for free with our 30-day trial, get acquainted with our user-friendly service by reading our getting started page, or take our free online course.

Keep well, stay safe and watch out for April fools jokes!

Team SimplePay

March 30, 2021March 30, 2021

2021 ROE Submissions Are Due

It’s time for you to complete and submit your Return of Earnings (ROE) or W.As.8 to the Compensation Fund. This submission is a declaration of your employees’ earnings for the period 1 March 2020 to 28 February 2021 (the same as the tax year). In addition, you also need to provide projected earnings for the next year (1 March 2021 to 28 February 2022).

The deadline for this submission is 31 May 2021.

As always, SimplePay tries to make your life easier by automatically generating a report on the system that will help you to complete your W.As.8. Simply go to Submissions > OID (Workman’s Comp) Return to download the report.

The current 2020/2021 Return of Earnings threshold of R484 200 is already taken into account by SimplePay. Additionally, the Compensation Fund has published a new annual earnings threshold of R506 473 per annum for the 2021/2022 Return of Earnings (form W.As.8). We have updated our system to accommodate this.

More information about the Compensation for Occupational Injuries and Diseases (COID) Act can be found on our help site.

Please feel free to contact [email protected]za if you need any assistance.

Team SimplePay

March 25, 2021

New Feature: Bulk Leave Import

We’ve had several requests asking for a way for payroll administrators and leave admins to record leave in bulk and we’re delighted to let you know that this feature is now here! This means that there are now 3 ways for leave to be captured on the system:

Employees can request leave via self-service or our mobile app which then gets captured once approved by a leave approver.
Payroll administrators and leave admins can record leave for individual employees via an employee’s profile.
Payroll administrators and leave admins can download an Excel file, complete it with the relevant leave days and upload the file into SimplePay.

For more information on how to use this new feature, head to our help page.

We’re continuing our mission to revolutionise payroll, and in the process make SimplePay the preferred payroll software provider for small and medium sized businesses. We hope that with the additional method for recording leave, every user now has an option that meets their needs.

If you have any queries on how to use the system or any suggestions on how we can better serve your needs, please reach out to us.

Team SimplePay

March 17, 2021March 17, 2021

2021 Employer Annual Reconciliation Filing Season

The 2021 Employer Annual Reconciliation filing season will soon be opening on 1 April 2021. You have until 31 May 2021 to submit your Annual Reconciliation Declaration (EMP501) for the period 1 March 2020 – 28 February 2021 to SARS.

SARS has warned that late submissions will result in a penalty of 1% of total annual PAYE being levied each month after May 2021 until the EMP501 is submitted (up to a maximum of 10%). This principle will no doubt be a permanent feature for the future and we can expect it to be applied to the August 2021 mid-year tax certificate submissions too. In addition, please remember that any employer who wilfully or negligently fails to submit a return to SARS is guilty of an offence and is liable, upon conviction, to a fine or to imprisonment for a period of up to two years. This applies to EMP201’s as well as EMP501’s.

SimplePay automatically generates the IRP5s / IT3(a)s and EMP501 needed for year-end filing with SARS. These are available under the Filing section of the sidebar menu. Submissions of your EMP501 can be done via eFiling (for less than 50 employees) or the [email protected] application. You may need to update your [email protected] application to the latest version, 7.1.0. This can be done here. Please remember to back up your current information on your computer before installing a new version of [email protected]

For more information about the bi-annual filing process, refer to this help page. We also have a useful guide to take you through it step by step. The guide contains an important checklist which will help you eliminate unnecessary validation errors when trying to upload files to [email protected]

Please always check the status of submissions to ensure their EMP501 has been successfully filed at SARS.

As always, please feel free to contact us at [email protected] if you have any questions.

Team SimplePay

March 9, 2021April 13, 2021

COVID-19 TERS Phase 2 Claim Process

Update 19 March 2021: The UIF has released a Frequently Asked Questions Document on the two extended periods. To view it, click here.

Today’s blog post highlights the salient points from the UIF’s correspondence with employers on 3 March 2021 regarding the two new extension periods for Covid-19 TERS: 16 October to 31 December 2020, and 1 January to 31 March 2021.

Who Can Claim?

Subject to falling within one of the relevant claim codes, the TERS benefit for the extended periods is available for any employees who are registered with the UIF as a contributor and who have not been able to work normally. Each of these elements are broken down below:

Registered with the UIF

This requirement stipulates that only employees who are registered to contribute to UIF are eligible for Covid-19 TERS payments.

Have not been able to work normally

To be able to claim the benefits for the two extended periods, employees need to fall into one of the following four categories:

Category	Description
Claim Code 1	Employees (on temporary lay-off or reduced working time) within those sectors that have not been able to operate due to regulatory restrictions as per directives issued. A list of these sectors is detailed in the table below – to verify your company’s eligibility, the UIF will require you to provide the relevant Sector Industry Class (SIC) for your business.
Claim Code 2	Employees aged 60 and above, and who cannot be reasonably accommodated at work.
Claim Code 3	Employees in isolation and quarantine to prevent the spread of Covid19.
Claim Code 4	Employees with co-morbidities and who cannot be reasonably accommodated at work.

Additional Info: Eligible Sectors for Claim Code 1

A list of the eligible sectors in Claim Code 1 is provided in the UIF’s correspondence on 3 March 2021, but is tabled below for your convenience:

Cinemas
Theatres
Casinos
Museums, galleries, libraries and archives
Gyms and fitness centres
Restaurants
Venues hosting auctions
Venues hosting professional sports
Night clubs
Swimming pools
Bars, taverns and shebeens
Public parks
Domestic and international air travel
Rail, bus services and taxi services
E-hailing services
Sale, dispensing and distributions, and transportation of liquor
Beaches, dams, rivers and lakes
Passenger ships
Venues where social events are held
Venues hosting concerts and live performances
Hotels, lodges, bed and breakfast, timeshare facilities, resorts and guest houses
Conferencing, dining, entertainment and bar facilities
International sports, arts and cultural events
Professional services (cleaning and security) within regulated restricted sectors (e.g. hospitality)
Other services and activities within regulated restricted sectors (e.g. hospitality)

When to Apply

Applications for the 16 October to 31 December 2020 period are open for employees eligible for TERS under the first category (Claim Code 1). The UIF is still tweaking their system to accommodate applications for employees eligible for TERS under categories 2, 3 and 4; they will communicate as soon as the system is ready to accept these applications.

The UIF is not yet accepting TERS applications for the 1 January to 31 March 2021 period; the opening date for these applications will be announced in due course.

How To Claim

The application process remains the same as the first extension period. Your applications need to be accompanied by the following documentation:

Signed approval / acceptance letter (i.e. the Memorandum of Agreement or application, pre-signed by and for the UIF)
Bank Confirmation Letter (current)
Proof of payment to employees for previous benefits claimed and received for the prior period (e.g. EFT, payroll report, pay recon)
Refund to the UIF (if applicable)
Letter of authority

The claim for eligible employees can be captured either on the TERS online portal itself or by completing the spreadsheet template attached to the UIF’s email (also available to download here).

Unfortunately the CSV upload facility is not currently available for these applications, so it is of utmost importance that you ensure that the relevant information is captured correctly in the online portal or spreadsheet.

To complete the application correctly, the UIF highlights the following critical data fields in particular:

Field	Important Notes from the UIF
Monthly Salary	This needs to be the employee’s regular monthly salary and should not be increased in line with the full application period
Remuneration Earned for Hours Worked (Yellow Column on Spreadsheet)	This amount must reflect the full lockdown period’s cumulative remuneration, i.e. the amount you have paid your employee between 16 October and 31 December 2020 for the work they’ve done across this full lockdown period *but not* payment of advances, leave entitlements or gifts.

Should you have any questions on any of the above, you can contact the UIF on 0800 030 007. Greater detail can also be found in the UIF’s correspondence sent to employers.

We hope that this information has proved useful to you. If you have any questions on how the information provided relates to SimplePay, you can contact us at [email protected]

Keep well and stay safe.

Team SimplePay

SimplePay Blog

Posts

EMP501 Reconciliation to Reflect 2020 SDL Holiday

Background

Declaration to Reflect SDL Holiday

Credit for Payments Made

Submission Channel Consistency Requested for 2021 Employers Filing Season

Error Reports

Re-submission of Tax Certificates

Changing Submission Channels

2021 ROE Submissions Are Due

2021 Employer Annual Reconciliation Filing Season

COVID-19 TERS Phase 2 Claim Process

Who Can Claim?

Registered with the UIF

Have not been able to work normally

Additional Info: Eligible Sectors for Claim Code 1

When to Apply

How To Claim