Business Tips – Payroll Tips for Tax Year End – Part 1

BUSINESS TIPS – Payroll Tips for Tax Year End – Part 1

By Nikki Viljoen – Viljoen Consulting (Pty) Ltd 

Please note that this pertains to South African SARS, Basic Conditions of Employment Act, and Best Practice requirements.

Well, I am expanding somewhat in terms of my business and apart from the new Virtual PA that I now employ, I will be looking at additional assistance in the New Year.  This means of course that I needed to look at the new PAYE/SDL and UIF requirements implemented by SARS.  

My Company, of course, is already registered as an ‘Employer’ as I am an employee in my own company and getting myself registered on e-filing was a real nightmare, and I would prefer not to go through that whole experience again, so I have done a little research and whilst I may not know everything (and please believe me when I say that I don’t) here are a few of the things that I did find out.

• The Tax Certificates that are submitted to SARS must be in the format that SARS requires for the current year-end submissions.  My understanding of this is that none of the ‘old forms’ will be accepted.  My concern here is for people who do not have access to the internet – this could be a real problem for them.

• The electronic tax certificates imported into SARS e@syFile must include an Employer Trade Classification code.  If memory serves me correctly, this had to be set up when you originally signed on for EasyFile (although what is so easy about it eludes me at this point).

• The addresses of both the employee and the employer have to follow a specific format when they are submitted.  The format is:

- Unit Number

- Complex Name

- Street Number

- Street/Farm name

- Suburb/District

- City/Town

- Postal Code

• The actual Tax Certificates have to be 30 characters long and these characters are made up of the following

- Employer’s PAYE reference number

- The Tax year (remember, in this case, it will be your current year-end)

- Unique combination of 16 characters

• The Nature of the Person codes have also been updated/upgraded/amended.  The changes in some of them are:

- Code M – Foreign Employment Income (this is no longer in use)

- Code K – Personal Service Trust (this is no longer in use)

- Code H – Personal Service Company ( this one has been renamed to Personal Service Provider to include Personal Service Trust) – talk about confusing!

- Code N – Pensioner (new code) – I have no idea what code pensioners fell under previously.

• If a Passport Number is entered for an employee then the Passport Country of Issue must be supplied.

• Each employee’s Income Tax Reference Numbers are required.

• Contact telephone numbers for each employee are required – big brother is watching.

• Business and Residential Address details are mandatory for each employee – I am not sure how you would handle staff who are residing in squatter camps or informal settlements – and big brother is really watching!

• Employees who are NOT paid in cash are required to supply their bank account details.

• Tax Certificates will be limited to two pages – these are:

- Page 1 – Employer and Employee Demographic information

- Page 2 – Employee Financial Information. This is limited to 13 Income and 7 Deduction Source Codes  - this is why they say that they have simplified the tax returns!

• The total UIF and SDL contributions must also be included on each employee tax certificate.

That’s enough information to digest in one go, so next time we will continue with the next step of the requirements.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za