Introduction to Bi-Annual Filing
Every 6 months, you must reconcile the IRP5 / IT3(a) tax certificates, the EMP201 / EMP501 statements and the actual payments made to SARS – for the half-year ended in February and in August. Tax certificates must be issued to employees at year-end (or when they leave your service) but not mid-year.
Deadlines for the submission of reconciliations can be found on the SARS website.
For more information about EMP201 statements, EMP501 statements, as well as IRP5 / IT3(a) tax certificates, please refer to:
SARS requires certain information from employers and there is a checklist below that you can use to enable a smooth filing season. This information can be entered individually as normal or by using the bulk input functionality. The bulk input screens will enable you to see at a glance what information is missing for all your employees and fill in the gaps. For more information on how to access and use the bulk input screens, please refer to the following:
At the top of the page listing your IRP5s, you will see a link to validate your data. This will perform many of the validations that [email protected] will perform anyway, but it will save you a lot of time to do this validation in SimplePay first.
Note that the information on the checklist only has to be completed if you intend to use SimplePay to export tax certificates to [email protected]; it is not required if you will be doing them manually as then you’ll be entering the information directly into [email protected] or on paper certificates.
Employee Residential Address* must be completed. The street name is mandatory, as is the postal code. Either “Suburb or district”or “City or town”must be completed.
Employee Postal Address* must be completed, or simply select “Same as Residential” if that’s the case.
Employee Payment method* must be marked as “EFT” for employees paid in this way, with banking details completed. This must be done even if SimplePay is not used for making the EFT payments.
Employee bank account Holder relationship* must be completed for all employees paid via EFT.
For employees with passport numbers* or foreign ID numbers* instead of RSA ID numbers*, the “Passport country code” must be selected.
Employee Income Tax Number* should be entered for all employees. Employees that still don’t have a number should be manually registered via [email protected], using the ITREG button (while viewing an employee).
Ensure that Employee is a director of the company / member of the CC is marked if applicable to ensure correct declaration of income to SARS. You can change this setting by going to the employee’s profile and clicking on Classification.
Employer Filing Details must be completed. This includes Trade classification, SIC codes and Sars contact name (and telephone number) for recon queries. SDL and UIF reference numbers will be derived automatically from the PAYE number if any UIF or SDL contributions occurred during this period. Go to Settings > Employer Filing Details to enter this information.
*A bulk input screen can be used for these.
If you’ve captured the information listed in the checklist above, you are in a good position to do your filing with SARS. Keep in mind that this information is legally required and you may be subject to penalties for missing information. You should also ensure that tax take-on balances are entered for your employees if you started using SimplePay after the beginning of the tax year you’re doing a recon for. You can enter these balances by going to the employee’s profile and clicking on Take-On Balances.
The process for using SimplePay’s submission documents is discussed further on.
You may find it useful to consult the following documents published by SARS:
- [email protected] Employer User Guide – (“The User Guide”) explains how to upgrade / install and use [email protected]
- A step-by-step guide to the employer reconciliation process – (“Step-by-step Guide”) explains the process. Most of this is also covered in the document above.
Note that many sections of these documents are only applicable to businesses that don’t use payroll systems, so you don’t have to read the documents in their entirety. We will point you to the most important sections.
Setting Up [email protected]
Ensure that you have the latest version of [email protected] installed. You can check your version by launching [email protected] and looking at the title bar. If your version is not the latest one, or you don’t yet have [email protected] installed, you should download the new version from the SARS website, or just use the built-in update function.
Exporting IRP5 / IT3(a) Certificates to [email protected]
- Go to Submissions > Bi-Annual Filing (IRP5s etc). You will see a list of employees and their tax certificate types – either IRP5 or IT3(a). You will also be able to view the certificates for individual employees in PDF format. For some certificates, inputs may be required. If you see Pending Inputs next to a certificate, you should click it in order to populate the inputs. However, the majority of certificates will require no inputs because SimplePay derives as much information as possible automatically. Click on the Export Certificates to [email protected] link at the bottom of your list of IRP5s. Save the file – note that it may take up to 1 minute to generate the file.
- See section “3.7 Import payroll file” of The User Guide for the rest of the instructions. The file referred to in “Step 1” is the same as the one saved above. In addition, if your import fails or you have warnings, you should correct the data in SimplePay and repeat the export / import process. If you continue to have problems, save the log and mail the resulting file to [email protected]
- You will now have to complete some employer information that is not catered for in the [email protected] import function. Click the Add/Edit Employer button and then on Edit Employer. Select your company name from the list and complete the missing information. The Employer Contact Details – Tax Practitioner section should only be completed if applicable, i.e. if you’re doing the submission on behalf of another company.
- Next, you may want to go through the tax certificates as imported into [email protected] Section “3.8 Checking payroll and employee details” of The User Guide contains further instructions. You can also generate a PDF of tax certificates for printing from here if you did not print them directly from SimplePay.
The EMP501 is meant to reconcile the calculated tax liability with the actual tax paid over to SARS. SimplePay will give you a report with the liabilities for every month, which you then enter into [email protected]
- Go to Submissions > Bi-Annual Filing (IRP5s etc). Click on the PDF or Excel icon next to EMP501. Open or print the resulting file.
- Click the Declaration button under the Reconciliation section in [email protected] Enter the values from SimplePay’s report under PAYE, SDL and UIF. (You should use your own records for the months before you started using SimplePay). The Total Payments column should be completed based on your records of how much was paid over to SARS every month.
- *Please note: if you have been claiming ETI, click the button at the bottom and add the ETI values from SimplePay’s report.
- See section “3.11 Completing the reconciliation declaration and reconciling annual employee tax” of The User Guide for further instructions.
- Section 5.3 of The Step-by-step Guide (mentioned above) covers some common reasons for differences during reconciliation.
Section “3.12 Electronic submission of a reconciliation declaration to SARS” of The User Guide explains how to submit the data to SARS electronically.