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2022 Employer Interim Filing Season Submissions (13 September to 31 October 2021)

It’s approaching that time of the year again! We’d like to use this blog post to remind you that the employer Interim Reconciliation submission period, which is one of the Bi-Annual Filing periods for the 2022 tax year, will run between 13 September and 31 October 2021. 

During the Interim Reconciliation period, employers are required to submit accurate reconciliation declarations for the six month transaction period between 1 March to 31 August 2021. This includes all Monthly Employer Declarations (EMP201) submitted, payments made, and interim Employee Income Tax Certificates [IRP5/IT3(a)] created, where applicable.

Staying true to our ongoing commitment to make your payroll obligations a breeze and keep your business compliant, SimplePay automatically generates these forms for you, with all the latest legislative changes already incorporated. 

You can complete the filing process using the eFiling platform if you have less than 50 employees, or alternatively with [email protected] for any number of employees. You might also be able to complete the process in branch by prior arrangement, but we would encourage you to use one of the online methods. More on [email protected] can be read on this page.

Refer to our Guide on Bi-Annual Employer Reconciliation for more detailed information on how to go about completing the filing process.

Issues and queries relating to your submission can be directed to the SARS call center on 0822 00 7277.

Should you have any questions regarding SimplePay or any of our services, please feel free to contact [email protected] for assistance.

Keep well and stay safe.

Team SimplePay

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Additional Employment Tax Incentive (ETI) 2021

This blog is a follow up to our previous blog post dated 30 July 2021, regarding the Expanded ETI scheme being introduced by the National Treasury and SARS for the period of 1 August 2021 to 30 November 2021. 

On 12 August 2021, the National Treasury and SARS released draft legislation aiming to assist businesses in light of COVID-19 restrictions. Amongst other things, these Bills replicate the additional ETI that was rolled out in April 2020.  

The ETI relief eligibility requirements and benefits which are now being introduced will be very much the same as the ETI measures introduced in April 2020 and are discussed in the draft explanatory note released by SARS. In summary, the measures being introduced are:

  1. A R750 increase in the monthly maximum ETI allowable for qualifying employees.
  2. An expansion of the “qualifying employees” criteria to include employees who:
  1. no longer qualify due to their 24 months of ETI entitlement being exhausted;
  2. were ineligible due to having been employed before 1 October 2013; or
  3. were ineligible due to being aged between 30 and 65.
  1. The removal of the “gross up” calculation during this period for wages earned by employees working less than 160 hours per month. The requirement that ETI claimable must be “grossed down” is unchanged by the amendments.
  2. Monthly ETI reimbursements instead of bi-annual reimbursements for the duration of the Expanded ETI scheme (Aug – Nov).
  3. The introduction of an anti avoidance measure to limit abuse of the process where the employer tries to claim ETI after reducing the employee’s wage.

Important Points to Note:

Additional ETI Amounts

As in the previous ETI expansion in 2020, the amount of ETI claimable has been increased across the board by an amount of R750. As before, the ETI claimable for each employee may be adjusted on a sliding scale depending on the income range applicable to the employee. The effect of this change on each of the three income bands is discussed in detail on our Additional ETI (COVID-19) help page. 

Definition of Monthly Remuneration

The definition of monthly remuneration has been amended for this period by deleting the provision that it must be ‘grossed up’ if the employee’s ‘employed and remunerated’ hours for the month are less than 160.

The rationale for this is that many employees have been forced to work less hours during the recent lockdown and restricted work periods caused by the COVID-19 pandemic, and strictly applying the grossing up rule during this period would defeat the purpose of this relief

This also means that employees who previously did not qualify for ETI due to low ‘employed and remunerated’ hours may now qualify. 

Minimum Wage Qualifying Requirement

There is a Wage Qualifying requirement for employees to accrue ETI benefits which specifies that an employee must be paid the higher of:

  1.  the relevant national minimum wage;
  2.  An applicable industry wage regulating measure; or
  3. R2000.

Option C has been removed and does not have effect over this period, which means that an employer who is not subject to the National Minimum Wage Act and also does not abide by an industry set minimum wage, will not qualify for ETI at all during August to November 2021.

Extended Age Eligibility

In an aim to increase the number of employees who would qualify for ETI, the two age-related criteria are amended for the period August – November 2021. The result of these changes are that the following employees are now eligible to claim the Additional ETI: 

  • Employees aged 18 – 29 who no longer qualified for ETI as the full allowable 24 months of ETI had already been claimed;
  • Employees aged 18 – 29 who were ineligible as they were employed before 1 October 2013; and
  • Employees aged 30 – 65 who were ineligible due to their age and/or they were employed before 1 October 2013.

“Grossing down” of ETI Value

If an employee is employed for less than 160 hours in a month, the allowed ETI must be grossed down based on the ratio of ‘employed and paid remuneration’ hours to 160 hours. 

Monthly Reimbursement of ETI

To assist employer cash flow and as part of the relief provided by the Expanded ETI program, employers will be allowed to claim excess ETI at the end of every month from August 2021 to November 2021, as opposed to the usual twice per year.

The special ETI relief that potentially increases the total value of the ETI starts in August 2021, which is the last month of the current 6-month cycle.

Interim tax certificates for the 2022 tax year will therefore include one month (August 2021) of the enhanced ETI tax relief period. 

Now that employers could potentially have an increased ETI value for August, it is important to note that if the full ETI amount owing is not claimed as described above on the August EMP201 (due by 7 September 2021), any excess ETI owing to the employer will be forfeited.

At the end of this period, the normal 6-monthly ETI refund cycle will apply from the month after the end of the 2021 Expanded ETI relief period. 

SimplePay System Updates

In keeping with our aim and promise to keep you compliant, our team have implemented the updates required to apply the Expanded ETI rules retroactively to 1 August 2021 in time for the EMP201 deadline, being 7 September 2021. 

In order to claim additional ETI for your employees, you will need to have this set up on your company profile. To do this simple go to:

Settings → Payroll Calculations → Additional ETI (COVID-19) 

Note that the 2021 date range will automatically be selected and the Additional ETI calculated for you if you already had this set up on your profile and claimed additional ETI for your employees in 2020. 

Employers making use of the Additional ETI functionality for the first time will be required to set the Additional ETI date range and select ‘calculate’ in order to effect the Additional ETI for 2021.

Should you have any questions regarding our system and how to effect the above, please see our Additional ETI (COVID-19) help page or feel free to contact [email protected] for assistance.

Any further queries on details or implementation of the Expanded ETI rules can be directed to the SARS helpline on 0800 00 7277.

Keep well and stay safe.

Team SimplePay

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New Feature: Pro-Rate Custom Items

SimplePay automatically calculates and applies a pro-rate percentage to the Basic Salary of employees if they do not work for a full pay period i.e. the are appointed after the start of a pay period or terminated before the end of a pay period. We’ve received several requests to allow for the pro-rata percentage to be applied to other items, and are delighted to announce that this functionality is now available for certain custom items.

When creating a custom item that is an Income, Allowance or Deduction item, there is now an additional option to enable pro-rate for this custom item if the Input Type has been set up as “Fixed Amount” or “Amount per Employee”:

  • To read more about setting up custom items with this functionality, refer to our Custom Items help page.
  • For more information on how SimplePay calculates the pro-rata percentage, refer to this help page.

We hope this new functionality makes processing payroll for new or terminated employees slightly easier. If you have any questions or suggestions on how we can improve this, please reach out to our Support team.

Team SimplePay

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TERS Update and Claims for Workers Affected by Unrest

Today’s post covers the opening of TERS applications for new claim codes, as well as some information about the recently announced benefit program for workers affected by the recent civil unrest in Gauteng and KwaZulu-Natal. 

TERS Update

Our previous TERS posts outlined the application structure and the opening of applications for claim code 1.

We are happy to announce that the UIF is now accepting applications for claim codes 2, 3, 4 and 5 on the TERS portal, which means that:

  • Annexure A employers can lodge a claim for the period 16 March to 27 June 2021  (Claim code 2); and 
  • any employer can claim for employees who were unable to work due to age  (Claim code 3), health issues  (Claim code 4) or quarantine  (Claim code 5) between 16 March and 25 July 2021.

Annexure A employers are able to use SimplePay’s TERS CSV Export to speed up the logging of employees for whom they are claiming, but the other claims mentioned in the second bullet point can only be completed by manual capture on the TERS portal.

If you have any questions about applications for the new claim codes, you can contact the UIF call centre on 0800 030 007.

Workers Affected by Unrest

In a recent media statement, the Department of Labour announced that the application process for Workers Affected By Unrest (WABUs) in Gauteng and KwaZulu-Natal will open on 25 August 2021.

You will need to apply for the WABUs benefit on behalf of your employees and can only do so if your business has recently closed directly due to destruction, damage or looting of your workplace. You will also need to:

  • provide details of the reasons behind the closure of your workplace, including:
    • documentary proof of your submission of a report to the South African Police Services (SAPS), as well as proof that a case has been opened;
    • the case number; and
    • if applicable, proof of your submission and acknowledgement of an insurance claim.
  • confirm your acceptance of the scheme and submit any further information required by the UIF commissioner.

Payments of the benefit will be de-linked from UIF benefits, so will not use up any of your employees’ earned UIF benefit credits. The WABU relief will be paid at a flat rate of R3 500 per employee and applications can be made on the TERS portal.

We hope that this information has proved helpful to you. If you have any questions about the application we would direct you to the UIF call centre on 0800 030 007.

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 and stay safe 

Team SimplePay

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SARS [email protected] Testing – Preparing for September 2021

SARS recently notified us that testing of the latest updated [email protected] software would commence today in preparation for its release to the public in September 2021.

Duration and Scope of Testing

Testing will run from 6 August to 27 August 2021 and the enhancements to the system being tested will include:

  • New source codes on the IRP5 to incorporate the legislative changes;
  • New letters regarding Registration Status Amendments;
  • Amended letters regarding Employment Tax Validation;
  • Validation to ensure employers claiming ETI always use SARS data; and
  • Functionality to enable employers to reinstate financial values for a reconciliation period.

We are currently incorporating the new codes and tax rules to our system and aim to have this completed with plenty of time to spare. This means that come September you’ll be able to automatically generate the IRP5s / IT3(a)s and EMP501 needed, and easily submit them to SARS. 

Should you have any questions regarding SimplePay or any of our services, please feel free to contact [email protected] for assistance.

Keep well and stay safe.

Team SimplePay

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UIF TERS Update – Applications open for Annexure A Establishments

Today we follow on from our previous blog post, in which we discussed the latest iteration of the UIF’s Temporary Employee Relief Scheme (TERS) initiative for the most recent lockdown periods between 16 March and 25 July 2021. 

The UIF recently sent out a communication to all registered employers that provided a few updates and notable points in relation to this latest phase of TERS which includes:

  • the partial rolling out of applications for Annexure A establishment claims; and 
  • a note on the application of approved Sectoral Appeals.

Online Portal Update

The UIF TERS portal has been expanded over the past few weeks, as per the ongoing applications rollout process:

  • As of 29 July 2021, the portal is accepting Annexure A establishment claims (see previous blog post) for 28 June to 25 July 2021, under claim code 1.
  • A further application process for claims by Annexure A establishments during the period from 16 March to 27 June 2021 (claim code 2), is not yet operational but is planned and will be rolled out in due course.
  • The process for Annexure B establishment claims for the lockdown period between 28 June to 25 July 2021 (claim code 1), remains unchanged. 

The UIF continues to develop their portal with the goal of enabling applications in terms of Claim Codes 2, 3, 4 and 5 for the longer retrospective periods, as soon as possible. 

A further update to the portal is expected by the end of August 2021.

Sector Appeals 

Employers who have had their sectoral based TERS applications declined due to non-eligibility, have the option to appeal this decision in a process called a Sector Appeal, where they can provide motivation for their inclusion into a particular sector. The application form for this can be found here.

  • If you are applying for TERS for the period from 28 June to 25 July 2021 and have had a previous sector appeal approved, you will not need to reapply and the previous appeal will still have effect.
  • If you are applying for the period from 16 March to 25 July 2021, your previously approved appeal will not be applied and you will be required to make a new application.

Any further queries on the above can be directed to the UIF Call Centre on 0800 030 007.

Should you have any questions regarding SimplePay or any of our services, please feel free to contact [email protected] for assistance.

Keep well and stay safe.

Team SimplePay

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New Feature: Batch Pay Beneficiaries

SimplePay is a payroll system driven by the needs of its users. With that said, we’ve heard your requests for the ability to batch pay beneficiaries using an EFT export file and we’re happy to announce that this feature is here!

When creating a pay run, you can now download the EFT export file next to the beneficiaries report in the same way that you would for the net salaries due to your employees. You can then upload it into your banking portal and pay your beneficiaries in bulk. This saves you the effort of having to set them up as recipients in your banking portal and there is no need to manually type the amounts that need to be paid to each beneficiary, reducing the risk of human error, which could be costly.

For more information on beneficiaries, check out our help page here.

If you need any assistance with this feature or you’d like to give a shout out to the team for their work on this, please reach out to our Support team.

Team SimplePay

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ETI Relief Expansion and PAYE Deferral Announced, effective 1 August 2021

Recently businesses in South Africa have experienced numerous hardships and challenges to profitability and for some, their continued existence. As a beacon of hope and in an effort to give support and relief to those affected, National Treasury and SARS recently announced an intended R5 billion tax relief package. To relieve the economic strain being applied to businesses in South Africa currently, it was to be rolled out as soon as possible.

In today’s blog post we will look at the rapidly implemented tax relief campaign which has seemingly come to fruition over a number of days and is aimed at urgently assisting businesses during these tough economic times.

Tax Relief Measures and Effective Date

The statement issued by National Treasury briefly mentioned the intended tax relief packages, which was said to include:

  1. An expansion of the Employment Tax Incentive (ETI) for a period of four months; and
  1. A PAYE deferral for qualifying industries for a period of three months.

SARS announced in a media statement dated 28 July 2021, that the effective date of both the ETI relief and the PAYE deferral will be 1 August 2021. 

  • This will affect calculations in respect of the EMP201 declaration and payment which is due by 7 September 2021. 

The process was implemented quite swiftly as a way to assist the parties which were disadvantaged by the recent Level 4 Lockdown as well as the bouts of unrest targeting businesses in some areas. 

Please note that the changes have not been confirmed via actual government Bill or Amendment, at the time of writing and the information is still provisional at this stage. It is important to wait until the anticipated framework legislation on this is published, which government has said would be by mid-August 2021, as discussed below.

What are the requirements?

PAYE Deferral

The PAYE deferral will be available to industries deemed affected by SARS and this process will be dealt with directly by them. The exact list of affected industries has not been released at the time of writing this post, but we will provide an update on this as soon as more information is made available.

Any issues or queries you have around the deferral and qualifying industries should be directed to the SARS call centre on 0800 00 7277.  

Expanded ETI

Based on the information at hand it seems that the expanded ETI relief requirements will be very much the same as, if not identical to, the ETI relief measures which were introduced in April 2020.

This will most likely mean that there will be a R750 increase to the maximum monthly amount of ETI allowable for eligible employees. In addition to this, a further ETI will be available for employees who’ve exhausted their 24 month eligibility period, as well as those who previously did not qualify due to age or employment date. SARS has outlined how some of these changes may look in their media statement, here. 

If you are an employer who is intending to claim ETI, it could be wise to hold off on finalising payslips for the month of August 2021 to as late as possible in the month, until this confirmation is received. 

We can’t begin work on these changes until the official publication of the frameworks and as soon as this is released, we’ll begin work to immediately update our  system to ensure that the expanded ETI is incorporated into the August EMP201s, well before the submission deadline of 7 September 2021.

When will changes be confirmed?

It is widely expected that the required framework to outline and confirm the details of the relief will be issued sometime mid-August 2021.

We will notify all active SimplePay clients via system notification and will release blog posts on all further developments, as soon as we receive word.

Should you have any questions regarding SimplePay or any of our services, please feel free to contact [email protected] for assistance.

Keep well and stay safe.

Team SimplePay

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TERS Extension: 16 March to 25 July 2021

As promised in our last blog post, the aim of today’s post is to give an overview of the new COVID-19 TERS Direction and the process to apply for and receive TERS benefits. 

Currently, applications are only open for employees working in certain sectors, so we will only cover the application process for this group in detail today (claim code 1). When applications open up for the other groups we shall release a further post or posts concentrating on these groups’ applications.

Eligibility

The number of days that your employees can receive TERS for between 16 March and 25 July 2021, depends on a number of variables. TERS eligibility by sector is decided by whether the laws of a specific alert level required a restraint of your business’s trade. There are also individual eligibility criteria, meaning individuals may be eligible for TERS benefits even if they do not work within affected sectors.

The Direction covers 5 different groups that can claim for varying amounts of the extended TERS period. The groups and their relevant claim codes are:

UPDATE 6 August 2021: The table was updated to reflect the UIF’s changes.

CLAIM CODEGROUPCAN CLAIM FOR 
1Employees of Annexure A employers*28 June to 25 July 2021
1Employees of Annexure B employers * 28 June to 25 July 2021
2Employees of Annexure A employers *16 March to 27 June 2021
3ANY Employees over the age of 60, where the employer is unable to have alternate measures put in place for them to safely work16 March to 25 July 2021
4ANY employees with health issues, comorbidities or any other condition placing them at risk of COVID-19, who are unable to have alternate measures put in place for them to safely work16 March to 25 July 2021
5Any employee forced to isolate or quarantineThe period of isolation

*The sectors in Annexure A and B at the time of writing are listed below in the table. If in any doubt regarding eligibility, please contact the UIF call centre on 0800 030 007 to confirm.

ANNEXURE AANNEXURE B
1. Venues hosting auctions1. Cinemas11. Domestic and international travel
2.Venues hosting professional sport 2. Theatres12. Rail, bus and taxi services
3. Venues where social events are held3. Casinos 13. E-hailing services
4. Venues hosting live performances4. Museums, galleries, libraries and archives14. Sale, dispensing and distribution/transportation of liquor
5. Industries that form part of the value chain of any of 1 to 4 above.5. Gyms and fitness centres15. Beaches, dams, rivers and lakes
6. Restaurants16. Passenger ships
7. Night clubs 17. Hotels, lodges, B&Bs, timeshares, resorts and guest houses
8. Swimming pools18. Conferencing, dining, entertainment and bar facilities
9. Bars, taverns and shebeens19. International sports, arts and cultural events
10. Public parks20. Businesses at the discretion of the UIF, or industries that form part of the value chain of the above businesses

NOTE: The President’s speech last night mentioned a possible further category, covering those employees unable to work due to the recent unrest. At this point there has been no further information released. 

Applying for TERS

Currently, applications are only open for employees of Annexure B employers, but applications for all 5 groups will be opened as the UIF develops their portal to accommodate more applications.

Applications for TERS will again be done on the TERS portal and are currently open for the businesses listed in Annexure B, who were affected by adjusted level 4 of lockdown. The application period is for between 28 June and 25 July 2021. As an employer you will again be able to apply on behalf of your employees, but unlike some previous iterations, TERS payments should be paid directly from the UIF to your employees.

Guidance on the application can be found by downloading the UIF’s bundle of documents for the 28 June to 25 July lockdown period. To do this, go to the UIF portal landing page and click on: “Application Info” > Lockdown Period 10 (28 June to 25 July 2021) Documents.

As for previous periods, the guidance letter states that when applying you will need to provide the UIF with a:

  • 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.

In addition to the above, you will need to record which of your employees are claiming TERS. The two methods for doing this are:

  1. direct capture on the TERS portal; and
  2. via CSV file.

NOTE: If you choose option 2 and are a client of SimplePay, our TERS CSV Export will help you by pre-populating certain fields and in turn taking the leg work out of completing the CSV! 

When reviewing the CSV, in particular, please check the following for each employee you’re applying for:

  • LOCKDOWN PERIOD: this needs to reflect that your business falls under Annexure B
    • Shutdown from – 28 June 2021
    • shutdown to – 25 July 2021
  • REMUNERATION DURING SHUTDOWN: this should reflect the actual amount your employee was remunerated by you between 28 June and 25 July 2021.
  • PREFERRED PAYMENT METHOD: The new Direction stateS that the employee MUST be paid directly by the UIF, unless there is a reason this is not appropriate. An example of this would be if you made an advance payment of the TERS benefit to your employee. For this reason we recommend that you select “Payment to Employee”.

It cannot be stressed enough how important it is to ensure that all the documents you submit with your application are accurate, as otherwise this could lead to delays to TERS payments.

We hope that this information has proved helpful to you. If you have any questions about the application we would direct you to the UIF call centre on 0800 030 007.

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 and stay safe 

Team SimplePay

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TERS Refund Details and Possible Extension

In store today we have the first TERS post since our coverage of the two extended periods. If you made a refund for a period we’ll explain the reporting requirements for you to remain compliant, in addition to signposting a further extension to TERS due to adjusted alert level 4.

TERS Refund Details

If for any reason you refunded any amount of TERS payments, the UIF requires you to complete a breakdown of the amounts repaid by each of your employees, as opposed to the lump sum. If you did not do this when you refunded a TERS payment, the UIF requests that you correct this.

In their email to all employers on 6 July 2021, the UIF stated that they needed an individual breakdown of refunds to reconcile TERS payments on a per employee basis to allow them to reflect these amounts on the portal.

If you’ve made a TERS refund but did not submit a breakdown of repayments, you’re required to complete the spreadsheet attached to the 6 July email and send it to [email protected] with subject line “TERS REFUND per EMPLOYEE”.

Further TERS Extension

On 11 July 2021, President Ramaphosa announced in his speech that the UIF had entered into discussions with its social partners and agreed that TERS should be extended for businesses affected by the adjusted level 4 lockdown (in force from 28 June 2021). 

There has been no further information released since the speech, but we are keeping our eyes peeled for any developments. We’ll release a further blog post on extended TERS as and when more information becomes available, so watch this space!

We hope that this information has proved helpful to you. If you have any questions for the team you can contact us at [email protected]. 

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 and stay safe 

Team SimplePay