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Bi-Annual Filing

SimplePay automatically generates the documents required to do bi-annual submissions to SARS from your finalised payslips. To access these documents, please go to Filing > Bi-Annual Filing (IRP5s etc.).

We suggest that you finalise your EMP201s for the filing period before continuing with your bi-annual filing.

EMP501

The Employer Reconciliation Declaration (EMP501) contains the employer’s PAYE, UIF and SDL liability for all of their employees for the tax year / bi-annual filing period. It is effectively a summary of all of the EMP201s for the tax year / bi-annual filing period and, as with the EMP201, also contains information regarding ETI.

SARS requires ETI available to claim to be reported under code 7004, this is different from the actual amount of ETI claimed. The reason for this is to reduce any discrepancies between the IRP5 and the EMP501. Having the under-claim Theoretical ETI entered will account for having a value under code 7004.

The under-claim amount is shown under Additional ETI Info on the EMP501 even if the company is not claiming ETI.

More information on the various EMP501 components can be found in the following sections:

Tax Certificates

An employee’s tax certificate contains a summary of all the income, deductions, benefits, contributions, etc pertaining to that employee for the tax year / bi-annual filing period, recorded under the relevant codes. As the system automatically assigns the correct tax codes to all items, it is advisable to use system items, wherever possible, instead of custom items in order to ensure the correct allocation of tax codes.

For more information on system items and custom items, please refer to the following sections:

Tax certificates must be completed for employees every six months – in February and August – and can take the form of either IRP5s (where the employee was liable for PAYE) or IT3(a)s (where the employee was not liable for PAYE).

Employers are only required to provide employees with tax certificates after the end of the tax year, i.e. 28 February, or when an employee has left the employer’s service.

Number of periods worked

The field for No. of periods worked on the tax certificate is calculated based on the pay frequency. For every completed pay frequency, “1” is added to the number of periods worked. The value of an incomplete pay frequency is calculated as follows:

Number of days employed during the pay frequency / Total number of days in the pay frequency

Example:

If an employee has a Date of appointment of 8 November and belongs to a pay frequency that ends on the 25th of each month, then the No of periods on the tax certificate will be calculated as follows (assuming that they work the remainder of the tax year):

Partial periods:

  • Pay frequency: 26 October – 25 November = 31 days
  • Number of days employed in pay frequency: 8 – 25 November = 18 days
  • No. of periods worked (partial) = 0.5806 (18 / 31)

Completed periods:

  • Pay frequencies completed: 26 November – 25 December, 26 December – 25 January, 26 January – 25 February = 3

Total number of periods:

  • 0.5806 + 3 = 3.5806

Employer Reconciliation

Every 6 months, employers must reconcile the IRP5 / IT3(a) tax certificates, the EMP201 / EMP501 statements and the actual payments made with SARS. This can be done via the eFiling website or the e@syFile application and allows SARS to make an assessment in order to determine if the correct amounts of PAYE, UIF and SDL have been paid over during the year. Any tax determinations to be made by SARS on assessment are done at this point, and an employee may be entitled to a tax refund (if the employer over-deducted PAYE) or may have to pay over additional tax (if the employer under-deducted).

Please refer to the following article for a detailed explanation of bi-annual SARS PAYE submissions and reconciliations: