2010 PAYE Tax Update for Employers

SARS has announced that as of 1 April 2011 employers would have to register all their employees irrespective of what they earn. Automatically this implies an onerous tax filing process for employers, but unfortunately there is more. SARS has also introduced net PAYE tax requirements.  

So what do these new requirements entail?

• SARS has issued a 61-page brochure which includes anything and everything about the new PAYE requirements for 2010.

• The brochures includes things such as the new requirements for PAYE for 2010 IRP5s i.e. employees’ tax for the financial year end 28 February 2010.

• This brochure also includes the new and simplified Employer Reconciliation Declaration (EMP)201.

• The new EMP will now be a payment declaration instead of a payment and liability declaration.

• The employer will now have to declare its total payment together with the allocations made for PAYE, SDL and UIF.

The new PAYE tax requirements as well as the new version of the EMP201 imply quite some additional work for employers, according to a member of the Saica National Tax Committee. But in practical terms, what does this mean for employers?

Listed below are employers’ new tax responsibilities:

• Employers are required to gather all information for all individuals’ employees since March 2010.

• Regardless of an employee’s earnings, he or she will have to be registered as a taxpayer as of the beginning of 2011.

• All employers are obliged to register all employees on SARS’ new e@syFile system released on 1 March 2010.

• Employers can download the e@syFile software from www.sarsefiling.co.za as of 1 April 2010. 

Very important: Please make a backup of all your current PAYE information because installing the new software will cause all your current information to be deleted.

Employers need to submit additional demographic information for employees which includes ID numbers, bank account details as well as physical, home and business address details in the Employer Reconciliation Declaration (EMP201).
The 2010 IRP5 is entirely different than that of the past years. The two page IRP5 requires a lot more information of each employee than usual.

If you are an employer and require additional information or assitance with regards to PAYE tax, contact tax practitioner, Tax Relax.