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May marks D-Dates for Employer Reconciliations

May marks D-Dates for Employer Reconciliations

May signals employers to get their proverbial business house in order with deadlines fast approaching for EMP501 Employers Annual Reconciliation and Workman’s Compensation Assessment.

(WCA) due at the end of this month.

The Employers Annual Reconciliation or EMP501 is a report that declares all employee earnings and reconciles the taxes collected from employees per your payroll with the monthly funds paid to SARS via the Employer Declarations (EMP201) submission. It outlines the total payroll tax liabilities, such as PAYE, SDL, and UIF, featured on employees’ income tax certificates (IRP5/IT3a’s) for the respective period.

SARS requires consistent submissions and correct capturing of monthly PAYE liabilities to avoid unnecessary penalties and interest on inaccurate calculations. Penalties include corrections done on the EMP501 reconciliation and up to 10% of the total payroll value for late or incomplete reconciliations and an administrative penalty will be charged monthly until submission.

Take care in completing the following mandatory fields when submitting your EMP501 reconciliation for each employee:

  • Full name and surname of the employee
  • Identity number or passport number
  • Income tax reference number
  • Physical residential address
  • Dates of employment in the current financial year
  • Remuneration details received during the financial year
  • Employee’s bank account details

Workman’s Compensation Assurance (WCA) refers to the fees payable per year, calculated on the qualifying earnings and the nature of the business activities. According to the Compensation for Occupational Injuries and Diseases Amendment Act No 61 of 1997 (COIDA), employers must register with the Compensation Fund and pay annual earnings and risk-associated assessment fees. Employers who fail to do so are guilty of a criminal offence.

Stay compliant by onboarding PRN Advisory & Tax Services and let our expert tax services ensure your hassle-free EMP501 reconciliation process. Contact us today.

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