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What is the 35% PAYE deferment?

Employee income, other than as a result of a TERS or UIF payout, is subject to PAYE at the usual tax rates.

Employers are responsible for withholding the PAYE from employees and paying this over to SARS. SARS has allowed for a deferred payment of 35% of employees’ PAYE for the periods 1 April – 31 July. In other words, you can deduct the PAYE from employee’s payslips, but only pay over 65% of the PAYE owed to SARS immediately. The remaining 35% can then be paid after the 31 July.

Repayments shall be spread equally across the 6 months following the deferment period.

SARS has confirmed that the PAYE reported on the EMP501 is the total PAYE liability and not only the PAYE due (PAYE liability less deferred amounts). The actual amounts paid for the relevant months should be completed in the Payment column on the EMP501. If the PAYE deferral was utilised, it will mean that a shortfall has been paid and the EMP501 will force a reason for which you have to complete “PAYE DEFERRAL”.