As an employer, you have an obligation to deduct the monthly tax liabilities of your employee with respect to PAYE, SDL, UIF. This monthly deduction from an employee’s remuneration is paid over to SARS via the monthly EMP201 submission.
The Bi-Annual EMP501 reconciliation submission is processed to determine if there are any differences between the calculated tax liability with the actual tax paid to SARS. The reconciliation is processed every 6 months for the tax year.
- The first period review is from 1 March to 31 August.
- The second review is for the full tax year covering 1 March to 28/29 February.
There are two channels of submission for the EMP501 and IRP5/IT3(b) certificates. They are e@syFile for employers with more than 50 employees or through e-Filing. You must be consistent in the channel used for the submission.
During this reconciliation process for the first six months, the interim IRP5/IT3(b) tax certificates, the EMP201 /EMP501 statements, and the actual payments made to SARS are reviewed to identify any discrepancies. The interim IRP5/IT3(b) tax certificates are generated to ensure accuracy of the payments made against the monthly EMP201 and consolidated amounts as stated on the EMP501. The EMP501 cannot be submitted if the details for employees are not captured on their individual tax certificates.
The first step would be to process the following mandatory information on IRP5/IT3(b) – the employee tax certificates:
- The full name and surname of the employee
- Their Identity number or passport number
- The employee’s Income tax reference number
- The employee’s physical residential address
- Period (Date) of employment in the current financial year
- Employee’s bank account details
- For interim and annual, the employee’s remuneration details received during the financial year
Once all IRP5s are processed, SARS will process the Employment Tax Certificate Validation (ETV) and will provide feedback by way of the issuance of a letter to the employer of the ETV discrepancies which were identified on the certificates submitted. The employer must correct these discrepancies.
The letter will be issued either through E-filing or e@syFile ; depending on which channel you have submitted the reconciliation. Furthermore, any corrections made to the certificates can only be resubmitted using the same channel that was used for the initial filing – either through E-filing or e@syFile.
Effective 1 March 2025 – Upgraded e@syFileTM Employer – Version 8.0
SARS has launched e@syFile™ Employer – version 8.0. Version 8.0 will replace all previous versions of the software, effective 1 March 2025. It is advisable to download version 8.0 timeously to familiarise yourself with the new features as you prepare for the bi-annual reconciliation submission.
Do you require assistance with this reconciliation process? Accounting Practical Solutions can be of assistance to you with this process to remain compliant.