Tax Year End Guide - Preparation And Procedures For Tax ... · Tax Year End Guide - Preparation And...

Table of Contents

Part I Procedure to Check InfomationPrior To Processing Tax Year End 4

................................................................................................................................... 41 Major Changes for Tax Year End 2012

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 4Medical Scheme Fees Tax Credit

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 4Tax Credits

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 5Taxable Benefits - Employer Contributions

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 5Updated Source Codes

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 5New Fringe Benefit Code

... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 5Bursaries

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 6Deduction Codes

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 6Employee Tax Deduction Reason Codes

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 6Reactivation of Previously De-activated Codes

... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 6Normal Income Codes

... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 6Fringe Benefit Codes

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 7General Rules for Submission 2012

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 7SARS Combined Reporting Codes

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 7Redundant SARS Reporting Codes

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 7Income Tax Employee's Submission

................................................................................................................................... 72 SARS Legislative Tax Matters

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 8Fringe Benefit Interest Rate Changes

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 8UIF Rate Changes

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 8New uFiling

. .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... ... 9COIDA

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 9Remuneration to be Included

... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... . 9Employee's to be Included

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 10Tax Rates for 2012 Tax Year

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 10SITE

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 10Company Cars

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 11Advising Company Car Action for Employee

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 12Advising % Tax for Company Car on Employee

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 12Travel Allowance

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 12Advising % Tax for Travel Allowance on Employee

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 13Reimbursive Travel

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 13Severance Benefit Payments

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 13Employer Owned Insurance Policies

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 13Subsistence Allowance

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 13ITREG Tax Certificate Numbr file from SARS

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 14Business Logic Applied by SARS

..... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 14Importing SARS Tax Reference Numbers within D-BIT Payroll

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 15Importing SARS Tax Reference Numbers for More Than One Company

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 16August 2011 Penalties

................................................................................................................................... 163 Download of latest Program Update

Part II Procedures for Checking Tax YearEnd Setup 17

................................................................................................................................... 171 Extend Calendars

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 18Adding a Tax Authority

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 19Extending Calendars

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 20Extending Public Holday Calendars

Tax Year End Guide - Preparation And Procedures For Tax Year End 2012I

© 2011 .. . D-BIT Systems (Pty ) Ltd

................................................................................................................................... 222 Tax Authority Maintenance

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 22Master Tab

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 23Address Tab

................................................................................................................................... 233 Employee Masterfile

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 24Personal Tab

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 24Address Tab

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 25Taxation Tab

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 26Personal Tab

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 26Taxation Tab - Employee Tax Record

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 27Payment Tab

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 27Payment Details Screen

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 28Banking Information Screen

................................................................................................................................... 284 Check Actions for Correct Tax and IRP5 Reporting Categories

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 28Logical Integrity Check

.. ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... ... 29Processing the Logical Integrity Check

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 30Printing of Action System Listing

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 31Individual Check of Actions

................................................................................................................................... 325 Check Tax Start and End Dates for Payrolls.

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 33Checking Year End Dates

................................................................................................................................... 346 Check Employee's Action History File

................................................................................................................................... 367 Clearance Numbers for Pension/Provident/RA Funds

................................................................................................................................... 368 Different Payrolls with Same Company Tax Reference Number

................................................................................................................................... 379 Manual IRP5/IT3(a) Certificate Number Issued in Tax Year

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 37Advising Manual Certificate Number

Part III Foreign Currency 38

................................................................................................................................... 381 Creating Foreign Tax Authority

................................................................................................................................... 392 Add Start and End Dates to Foreign Authority

................................................................................................................................... 403 Add Foreign Tax Authority to Employee

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 41IRP5 Tab

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 42Advise YTD Foreign Income

................................................................................................................................... 424 Running SARS Disk

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 43SARS Disk

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 43Tax Certificate

Part IV Processing Tax Year End 44

................................................................................................................................... 441 Backup

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 44Backup from Icon

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 45Automatic Backup

................................................................................................................................... 452 Accept Final Payroll

................................................................................................................................... 473 Tax Year End Procedures

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 47Prior to running Tax Year End Procedures - Import Tax Reference Numbers

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 48Perform Tax Year End Procedures

................................................................................................................................... 494 Balancing Procedure for Tax Year End

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 49Print Summary Page of Tax Certificates

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 51Tax Schedule

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 51Print SARS IRP501 Reconciliation

................................................................................................................................... 525 Tax Year End NOT Balancing

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 52Recon Tax Liability Schedule

................................................................................................................................... 546 Other Balancing Reports

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 54Action History Report by Month/Link Action History Report by Month

IIContents

II


................................................................................................................................... 557 iF Tax Year End Balances

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 55Validate SARS Return

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 58Generate LIVE Disk

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 59Print IRP5/IT3(a) Certificates

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 60Tax Certificate Numbers

Part V Adding Manual IRP5/IT3(a)numbers after Tax Year EndProcedures run 61

Part VI SARS e@asyFile Reconciliation 61

................................................................................................................................... 621 2012 Submission Period

................................................................................................................................... 622 No Returns for Half a Million Taxpayers

................................................................................................................................... 623 EMP 501

................................................................................................................................... 624 EMP 601

................................................................................................................................... 635 EMP 701

................................................................................................................................... 636 Credits With Finalisation

................................................................................................................................... 637 Completion of EMP 501 Reconciliation Statement

Part VII Electronic Certificates 64

................................................................................................................................... 641 Issue and Submission of Electronic Certificates

................................................................................................................................... 652 SARS Validation Rules

................................................................................................................................... 653 Rejections

................................................................................................................................... 654 Zipped Files

................................................................................................................................... 655 Duplicate Certificates

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 65Manual Certificates

... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... ... .... ... .... ... .... ... .... ... ... .... ... .... . 65Electronic Certificates

Tax Year End Guide - Preparation And Procedures For Tax Year End 2012III


4Procedure to Check Infomation Prior To Processing Tax Year End


1 Procedure to Check Infomation Prior To Processing TaxYear End

1.1 Major Changes for Tax Year End 2012

None.

1.1.1 Medical Scheme Fees Tax Credit

Employers are currently allowed to deduct contributions limited to the capped amount in respect ofmedical scheme contributions paid by employees under 65 years. The medical schemecontributions must be treated as follows with effect from 1 March 2012:

1.1.1.1 Tax Credits

- The Tax Credit � is applicable to all taxpayers other than those aged 65 or more.- A tax 'Rebate' will be granted, instead of the 'Capped' deduction of medical aid

contributions that is deducted from 'Taxable Income'.- The value of tax credits is calculated from the dependants.- Reason for change is stated to be that the medical cap amount is more favourable to

'High' earners. A person paying tax at the marginal rate of 40% a cap amount deductionwill be worth 40% of the deduction, whereas a person paying tax at 18% the deduction willbe worth only 18% of the deduction.

- This was regarded as 'Unfair', in that the allowance should result in the same tax savingfor rich as for poor people, which is achieved by the tax credit (ie, a tax rebate).

- An 'under 65' employee is entitled to the tax credits in respect of medical scheme feespaid by the employee.

- R216 each per month for contributions made in respect of the employee and onedependant. Plus

- R144 per month in respect of each additional dependant.- A '65 and older' employee is allowed the full medical scheme contribution paid by the

employee as a deduction from remuneration, 'NO' Medical Tax Credit.- The Medical Tax Credit will be deducted from the 'Tax Payable' instead of from 'Taxable

Income' ie: the deduction will now happen 'After' the 'Rebates'.- 'Disabled Employees' � Are 'NOT' entitled to any extra medical tax credit.- If an employee is employed for a part month, he is eligible for the medical tax credit value

for the 'full' month.

- Medical Expenses on Assessment- Taxpayers '65 and over' can claim all medical expenses incurred and all medical aid

contributions.- Taxpayers who are 'Disabled' or who have a disabled dependant may claim the total of all

medical expenses and other expenses directly linked to the disability, plus so much of theirmedical aid contributions as exceeds four times the medical tax credit they have received.

- Taxpayers not falling in either of the above categories can claim the total of so much oftheir medical aid contributions as exceeds four times the medical tax credit they havereceived, plus all other medical expenses incurred. From this total is deducted 7.5% oftheir taxable income.

- Fringe Benefit

- 'Under 65' - Medical scheme contributions paid by the employer on behalf of anemployee are included as a fringe benefit.

- '65 and over not retired' from the employer, will be a taxable fringe benefit.

- 'Retired' from the employer irrespective of age, and the employer continues to paycontributions on behalf of that retired employee, the 'No Value' fringe benefit still

5 Tax Year End Guide - Preparation And Procedures For Tax Year End 2012


applies.

- Directives and Non-Standard Employment

- In terms of 'hardship' directives:- The medical tax credit must apply to employees tax derived by the way of the directive.

- Primary, secondary and tertiary rebates may not apply to employees tax derived by the

way of the directive.- SARS will not include the medical tax credit in their calculation of the directive

percentage or fixed amount.- SARS will include the primary, secondary and tertiary rebates in their calculation of the

directive percentage or fixed amount.

- In terms of 'non-standard' employment:- The medical tax credit must apply to employees tax.

- Primary, secondary and tertiary rebates may not apply to employees tax.- SARS will not include the medical tax credit in their calculation of the fixed 25% rate.

- SARS will include the primary, secondary and tertiary rebates in their calculation of thefixed 25% rate.

1.1.1.2 Taxable Benefits - Employer Contributions

With effect from 1 March 2012, the = 'no value fringe benefit' in respect of medical schemecontributions paid by the employer on behalf of the employee who is 65 years and older and whohas not retired will be repealed. This means that:· The amount of contributions paid by the employer on behalf of an employee who is 65 years and

older and has not retired from that employer, will be a taxable fringe benefit.

· However, when an employee has retired from an employer, irrespective of the age of theemployee, and the employer continues to pay contributions on behalf of that retired employee,the 'no value' fringe benefit still applies.

1.1.2 Updated Source Codes

The updating to the description of certain codes, introduction of new codes and re-activation ofcodes previously de-activated for certificate reporting purposes will become effective from 1 March2012.

1.1.2.1 New Fringe Benefit Code

3815 - Non Taxable bursaries or Scholarships (EXCL) to employee's and their dependants.

1.1.2.1.1 Bursaries

The following is the correct interpretation on taxing bursaries:

- If an employees remuneration is above R100,000 then the 'full' amount of the bursary istaxable i.e. (no exempt portion) irrespective of whether the value of the bursary is above

or below R10,000.

- If the employees remuneration is a R100,000 or less:- The first R10,000 of the bursary is exempt.

- The excess above R10,000 of the bursary is taxable.



- From March 2012:- The 'taxable' portion must be reported under SARS code 3809.

The 'exempt' portion must be reported under SARS code 3815.

1.1.2.2 Deduction Codes

4474 - Employer's medical scheme contributions in respect of employees not included in code4493. From 1 March 2012 the contributions paid by the employer on behalf of an employee 65 andolder and who has not retired, should also be reflected under this code.*

4493 - Employer's medical aid contributions in respect of an employee who qualifies for the 'novalue' provisions in the 7th Schedule. This is the employer's portion of the medical scheme contribution made on behalf of an employeewho is

· a pensioner (a person who by reason of superannuation, ill-health or other infirmity retired fromthe employ of such employer).

· the dependants of a pensioner after the death of the pensioner, (if such pensioner retired fromthe employ of such employer by reason of superannuation, ill-health or other infirmity).

· the dependants of a deceased employee after such employee's death, if such deceasedemployee was in the employ of the employer on the date of death.

1.1.2.3 Employee Tax Deduction Reason Codes

4116 - Medical Scheme Fees Tax Credit taken into account by employer for PAYE purposes.

1.1.2.4 Reactivation of Previously De-activated Codes

This section details the codes to be reactivated from 1 March 2012.

· These codes are therefore valid for the 1999 to 2009 and from the 2013 years of assessment.

· The Foreign Service income codes (codes in brackets) are valid from the 2002 to 2009 and fromthe 2013 years of assessment.

1.1.2.4.1 Normal Income Codes

3603 - Pension (PAYE) Any pension paid on a regular basis as well as backdated pensionpayment (for current tax year).3610 - Annuity from RAF (PAYE an annuity paid by a RAF to any person.

1.1.2.4.2 Fringe Benefit Codes

3805 - Accommodation (PAYE) Free or cheap accommodation or holiday accommodation. 3806 - Free or cheap services. 3808 - Employee's Debt. Payment of an employee's debt or release of an employee from anobligation to pay a debt.3809 - Taxable Bursaries or Scholarships (PAYE). Bursaries and scholarships to employees andtheir dependants � taxable portion only.



1.1.3 General Rules for Submission 2012

·Separate CSV file for each transaction year.

·Employer demographic header record.·Employee demographic and financial records.·Employer totals and trailer record.·Not more than one file per employer.·Employer PAYE, UIF and SDL Ref. No. to cross reference with the EMP201.·Employer trading/other name.

·Employer Trade Classification, main sector for business VAT/EMP403.·Employer physical address - in specified format.·Person responsible for the reconciliation.·New format tax certificates 2 A4 pages, page1 demographic, page 2 financial.·Tax certificates now have both foreign and local income on one certificate.

1.1.4 SARS Combined Reporting Codes

·Code 3601 (Income PAYE) � 3601, 3603, 3710.·Code 3602 (Income EXCL) � 3602, 3604, 3609, 3612.·Code 3713 (Other Allowances PAYE) � 3713, 3706, 3710, 3711, 3712.·Code 3714 (Other Allowances EXCL) � 3714, 3705, 3709, 3716

·Code 3801 (General Fringe Benefits PAYE � 3801,2,3,4·Code 3902 (Pension/RAF PAYE) � 3902, 3920, 3921.·Code 3915 (Ret. Lump Sum Benefits PAYE) � 3915, 3903, 3905.·Code 4003 (Provident) � 4003, 4004.

1.1.5 Redundant SARS Reporting Codes

·Code 3699 Gross Remuneration.·Code 4025 Medical Contribution paid by employee .·Code 4472 Employers Pension Fund Contributions.

·Code 4473 Employers Provident Fund Contributions.·Code 4103 Tax Deducted.·Code 4485 Medical Services Costs.·Code 4486 Medical Capped amount.

·Code 4487 No Value Benefits IRO Medical Services By ER.

1.1.6 Income Tax Employee's Submission

Note: The submission of tax returns annually will remain dependant on the income earned and noton registration. Currently employees who earn less than R120 000 a year from one employerand have no extra income and deductions don't need to submit a return.

1.2 SARS Legislative Tax Matters



1.2.1 Fringe Benefit Interest Rate Changes

Fringe Benefit Interest Rate Changes

This is for Low/Interst Free Loans ie: if no interst or a lower interest rate is charged than thatspecified, the difference between the interest rates charges and the interest calculated at theofficial rate constitutes a taxable fringe benefit.

The interest rate for low interest loans is 6.5% from 1 March 2012 (repo rate plus 1%).

1.2.2 UIF Rate Changes

No changes as of yet.

1.2.2.1 New uFiling

- KEY FEATURES.- Accesible � 24/7.

- Easy to use.- Free of charge.

- Bulk uploading and declaration submission.- Legislative Compliance.

- Accurate UIF contributions and reconciliations.

- Ready to use reports.- FUNCTIONALITY

- Save costs.- Reduce complexity.

- Increase transparency and promptness of service.

- Improve efficiency of staff.- Maintain and track all records.

- Offers highly secure solution, inaccessible from unauthorised users.- Speedy claim processing.

- Tracking of all claims through the issuing of unique reference numbers.

- For further information please log on to www.labour.gov.za



1.2.3 COIDA

The COIDA new ceiling limits effective for Tax Year 2011/2012 starting from 1st March 2011.

Limit from 1st March 2011 = 277,860.00

This is a statutory change has been updated by D-Bit Sytems.

1.2.3.1 Remuneration to be Included

When calculating the remuneration value for COID reporting you need to note the following :Remuneration is deemed as earnings of all types (before deductions) due to an employee, eithermade or owing, in money terms or in kind that has arisen out of his/her employment. It includes :- Salaries and/or Wages- Cost of Living Allowance- Bonuses (incentive or otherwise)- Overtime payments (regular)- A guaranteed 13

th cheque

- Housing Allowance- Commissions (only if given to an employee who also has a basic salary, and not agents orcontractors)- Cash value of meals and accommodation provided to an employee- Any other payment due to an employee in accordance with the employee's contract of serviceDon't include the following :- Subsistence Allowance (reimbursive in nature)- Travelling Allowance (reimbursive in nature)- Occasional Overtime- Ex Gratia Payments- Occasional Payments- Company Contributions to Medical Aid, Pension or Provident funds- Once-off (non-recurring) payments made to an employee which falls outside the scope of hisservice contract or for tasks which fall outside the scope of the employees normal duties.

1.2.3.2 Employee's to be Included

- A person under contract of service with the company or an apprenticeship or learnership schemeor who is paid in accordance to the time worked or is paid in cash or in kind for services rendered.- Casual employees.- Director or member of a corporate body (who has entered into a service contract).

- A person provided by a labour broker for which the labour broker is remunerated.



1.2.4 Tax Rates for 2012 Tax Year

1.2.5 SITE

· Special provisions were introduced in 2010 to phase out the Standard Income Tax for Employees(SITE) over a three year period .· No SITE calculations from 1st March 2012.

1.2.6 Company Cars

·The determined value of a company car will now be the cost of the car, excluding only finance andinterest charges.· VAT and any maintenance plan purchased will be included in the original cost figure.· The percentage to calculate the fringe benefit will be as follows:· 3,5% if the vehicle was not subject to a maintenance plan at the time the employer acquired thevehicle.· 3.25% if the vehicle was the subject of a maintenance plan at the time the employer acquired thevehicle.· The fringe benefit value must be reduced by any payment made to the employer by the



employee, other than cost of license, insurance, maintenance or fuel, these are taken into accounton assessment.

· Only 80% of the fringe benefit is subject to tax.· However if the company is satisfied that more than 80% of the use of the vehicle is business,then only 20% of the fringe benefit value be subject to employee's tax.· The employee in such a case MUST keep a log book.

1.2.6.1 Advising Company Car Action for Employee

Go to Employee Masterfile->Payslip Tab->Double click on the Company Car action.

Cost+Maint (excl Vat) - enter the full cost of the vehicle + any maintenance plan, this value mustEXCLUDE VAT.



Maintenance plan included in cost? - tick if the the cost include the maintenance plan.

1.2.6.2 Advising % Tax for Company Car on Employee

Go to ->Employee Masterfile->Taxation Tab->Double click into the 2012 tax record->Master Tab.

Co.Car / Travel tax % - use the drop down to select % to be used.

1.2.7 Travel Allowance

· Fringe benefit taxed at 80%.· Sales reps taxed 20% as business mileage is 80%, log book essential.· Travel Allowance in addition to a Company Car, is NOT considered a Travel Allowance and mustbe taxed t 100%. Ie: No Travel Allowance allowed with a company car.

1.2.7.1 Advising % Tax for Travel Allowance on Employee

Go to ->Employee Masterfile->Taxation Tab->Double click into the 2012 tax record->Master Tab.

Co.Car / Travel tax % - use the drop down to select % to be used.



1.2.8 Reimbursive Travel

·The table used to calculate the rate per kilometre when determining a travel allowance and therate per kilometre at which kilometers may be reimbursed has changed.· These changes will result in higher rate per kilometre value for motor cars to the advantage ofindividuals using their private vehicles for business purposes.· Also applies to individuals covering all private fuel expenses when making use of a company car.· Employers are advised to recalculate the value of the travel allowance based on the estimatedkilometers for the new tax year and using the new kilometre rates.· The determined rate per kilometre used for reimbursement of business kilometers should not begreater than R3.05 (was R2.92) or the rate as derived from the table.

1.2.9 Severance Benefit Payments

·The R30,000 exemption that previously applied to retrenchment gratuity lump sums has beenrepealed from 1

st March 2011.

· Severance Benefit Payments will now be taxable in terms of the retirement fund lump sumsbenefits tax rates.· An employer is required to apply for a tax directive if this type of remuneration is paid to anemployee.· The exemption shall be determined by SARS with the processing of the tax directive application.· The gross amount of the severance benefit must be reflected under the code 3901 on theIRP5/IT3(a) tax certificate.· The employees tax withheld in terms of the directive must reflect under code 4115.

1.2.10 Employer Owned Insurance Policies

·Changes have been made to the taxation of employer owned insurance policies.· This may result in the taxation of these company contributions on the payroll such as:· Deferred Compensations Schemes.

· Income Replacement Policies.· Please refer to letters sent out by your insurance firm, clarifying the changes related to yourspecific contributions.

1.2.11 Subsistence Allowance

· R88 per day for incidental expenses.· R286 per day for meals and incidentals.

1.2.12 ITREG Tax Certificate Numbr file from SARS

· SARS has taken all the interim (bi-annual) declarations received up until August 2011 and run thefiles through a set of validations to confirm and validate information.· Correct or automatically register all individuals not registered for income tax· The tax reference numbers can be obtained for those employees that SARS could successfullyregister from the outcome of the interim August 2011 submission.· The bulk ITREG requires that the same e@syfile Employer Software database is maintained thatwas used for the reconciliation submission· The Employer application can be imported into the payroll to populate the correct income taxreference numbers.

Accessing Income Tax registration numbers on e@syFile" EmployerTo access the Income Tax reference numbers, complete the following steps:



" Step 1: Ensure you are using the e@syFile" software with your database containing your mostrecent reconciliation submission when performing the synchronisation" Step 2: Launch e@syFile" Employer, enter your e@syFile" Employer login, and select"Synchronise Application"" Step 3: Select synchronise "All", if you have synchronised "All" previously you can also chooseto synchronise only registration results by selecting "Taxpayer Income Tax Registrations"" Step 4: Enter your eFiling login details" Step 5: The software will synchronise and download the bulk ITREG information that can bematched to the submitted certificates" Step 6: The registration details can be viewed in the inbox, or alternatively exported from thesoftware by selecting "Import/Export Payroll File," and then selecting "Export Payroll File".

1.2.12.1 Business Logic Applied by SARS

Assuming that the data necessary to be able to register an employee for income tax is valid andpresent on the tax certificate, the SARS ITREG file to the employer will be populated with recordsaccording to the following business logic:

i. If the IT# was correct on the tax certificate, then no record will be suppliedii. If the IT# was incorrect on the tax certificate, then the correct IT# will be suppliediii. If the IT# was not on the tax certificate but the employee is registered according to the SARSrecords, then the IT# will be suppliediv. If the IT# was not on the tax certificate and employee is not registered, then the IT# will begenerated and supplied.

1.2.12.2 Importing SARS Tax Reference Numbers within D-BIT Payroll

Select 'Processing'.

Select 'Tax Year End'.

Select 'Retrieve SARS IT Reg File'.

Step1:Select the SARS IT Reg File and import it - browse to the directory to where you have save thedownloaded SARS ITReg.csv file.Step2:Select 1 or more companies to match against - use down arrow to select company.Click 'Import' tab to display the following screen.



Click 'Match' tab to display the matched employee's.

NB: Information displayed in 'Red' is where the these values do not match with the payroll.Step3:Commit the matched tax reference numbers to the database and create a non-matched IT Reg filefor further processing - if you are satisfied that the information matches then continue with this stepand click on the 'Apply' tab.

Click 'Yes' to update the database.

1.2.12.3 Importing SARS Tax Reference Numbers for More Than One Company

Select 'File'.



Select 'Tools'.

Select 'Open Application Folder'.

Double click 'NPSARS3.EXE'.

Step1:Select the SARS IT Reg File and import it - browse to the directory to where you have save thedownloaded SARS ITReg.csv file.Step2:Select 1 or more companies to match against - use down arrow to select a company.Click 'Import' tab to display data.

Once you have completed one company and run through the process as for importing acompany,you then select the next company.

1.2.13 August 2011 Penalties

SARS have been threatening for a long time to raise penalties for tax certificate transgressions.The penalties for 'late' submissions and for 'incompleteness' of information on the August 2011 taxcertificates, will probably be issued in batches within a few weeks.

1.3 Download of latest Program Update

Download latest programs from the Web

Programs should be downloaded immediately,

If there are further updates we will be updating notices in this regard on our website.

Open up D-BIT Payroll->Help->D-BIT Web Update-.Follow Wizard.

Select 'D-BIT Web Update.



Click on 'OK'.

Click 'Next' and follow the wizard.

2 Procedures for Checking Tax Year End Setup

2.1 Extend Calendars

NB: It is imperative that the Calendars are extended for the new tax year prior to accepting thefinal run for January (Especially Monthly Payrolls). The reason being that as the payroll rolls overto the next period, the period being accepted moves to 'Last period Run', the 'Next Period End'moves to 'Period end date' and the 'Next period End' moves the next period from the calendarinto this field.

January Payroll Prior to Accepteg: As at January - Last Period End = 2011/12/31-1

Period end date = 2012/01/31-1 Next period End = 2012/02/29-1

When January payroll After Accept the period dates will be as follows:eg: As at February - Last Period End = 2012/01/31-1 Period end date = 2012/02/29-1 Next Period End = 2012/03/31-1

NB: The above is a precautionary measure, as the system will ask if you wish to extend calendarson the accept of the final January Payroll.

Run Schedules

18Procedures for Checking Tax Year End Setup


Before calendars can be extended, the relevant 'Tax Authorities' necessary for the extension ofcalendars MUST be advised.We advise you to add 'Tax Authorities' for the next 5 years, and then the calendars willautomatically be extended for 5 years.

2.1.1 Adding a Tax Authority

Check that the Tax Authority exists before extending the calendar.

Select->Configuration->Tax Authorities ->Click on the 'Magnifying Glass' next to the TaxAuthority to list all tax authorities

Select 'Configuration'.

Select 'Tax Authorities'.

Click on 'Magnifying Glass' to get the list of existing tax authorities.

TO ADD A TAX AUTHORITYHighlight the Tax Authority as shown below.

Press the 'Insert' key and change the year to the next tax year, and press 'Enter'. the followingscreen will be displayed.

Click 'Yes' and the following screen will be displayed.

Click 'No'.Click on 'Save'.

Change the 'Tax year start date' and the 'Tax year end date' to the dates specified by SARSand any other information that needs to be updated.



2.1.2 Extending Calendars

Select->Maintenance->Payroll Maintenance ->Calendar Maintenance ->Select Run Schedule ie:Monthly/Weekly ->Use the 'Plus Sign' in top right hand corner to see how far the calendar extendsto.

Select 'Maintenance'.

Select 'Payroll Maintenance' .

Select 'Calendar Maintenance' and the following screen will be displayed.

Click on the 'Plus' sign to the left of the 'Period Run Schedule' to list the run schedules.

Click on the schedule you wish to extend, and the schedule will be displayed on the right.

Click on the 'Plus' sign to move to next page of the calendar, and check when the last period fallson the calendar.

TO EXTEND CALENDARClick on the right 'Green Arrow' above the list of run schedules.

The following screen will be displayed.

The tax authorities that need to be applied to the calendar will appear in the bottom of the screen.Click 'OK' and the calendar will be extended.Click 'Save'.MONTH ENDS - Weekly/Fortnightly PayrollsNote: After advancing the Calendar forward, the month ends must be checked that they fall in thecorrect period.



If these need to be changed, double click on the incorrect month end period, and the followingscreen will be displayed.

To move the 'Month End' forward click on 'Shift Month End>>'.To move the 'Month End' back a period click on '<<Shift Month End'.Click 'OK'.

NB: The 'Run of period' and 'Runs in period' will automatically be changed.

2.1.3 Extending Public Holday Calendars

Select->Maintenance->Payroll Maintenance ->Calendar Maintenance ->Select Run Schedule ie:Monthly/Weekly ->Use the 'Plus Sign' in top right hand corner to see how far the calendar extendsto.



Select 'Calendar Maintenance' The following screen will be displayed.

Click on the 'Plus' sign to the left of the 'Public Holidays' to list the run schedules.



Click on the schedule you wish to extend, and the schedule will be displayed on the right.

BEFORE EXTENDINGCheck each public holiday and 'Tick' on if this holiday is recurring ie: the holiday occurs in thefollowing year. If the holiday is ticked on as 'Recurring' these holidays will be carried forward intothe new year when the schedule is extended.

EXTEND PUBLIC HOLIDAY SCHEDULEOpen the the 'New' ie: the following years schedule which should be blank.Click on the right 'Green Arrow' a message will be displayed shown below.

Click 'Yes'.



Click on 'Save'.

2.2 Tax Authority Maintenance

Select 'Configuration'


2.2.1 Master Tab

The 'Master' tab must be changed to the 'Postal' address of your Employer/Company.PAYE,SDL and UIF Reference numbers are MANDATORY and must also be completed on the'Master' tab.

Employer's name - MANDATORYTax reference number - MANDATORYAddress - must hold the Employer/Company 'Postal' address.UIF reference number - MANDATORYSDL reference number - MANDATORY



2.2.2 Address Tab

Unit No: - OPTIONAL can be left blank.Complex Name: - OPTIONAL can be left blank.Street No: - OPTIONAL can be left blank.Street Name: - MANDATORY cannot be blank.Suburb/District: - CONDITIONAL ie: either the Suburb/District OR City/Town must be completed.City/Town: - CONDITIONAL ie: either the Suburb/District OR City/Town must be completed.Postal Code: - MANDATORY cannot be blank.

2.3 Employee Masterfile

The following all need to be checked/verified:

Identity number/Passport numberCountry of issue (if passport number entered)AddressTax Reference number.



2.3.1 Personal Tab

Identity number - MANDATORY with a 13 digit valid bar-coded RSA Number (old ID numbersmust be entered under'Passport' number.Passport number - MANDATORY if NO identity number entered.Country of Issue - MANDATORY if 'Passport' number entered.

2.3.2 Address Tab



2.3.2.1 Taxation Tab

Unit No: - OPTIONAL can be left blank.Complex Name: - OPTIONAL can be left blank.Street No: - OPTIONAL can be left blank.Street Name: - MANDATORY cannot be blank.Suburb/District: - CONDITIONAL ie: either the Suburb/District OR City/Town must be completed.City/Town: - CONDITIONAL ie: either the Suburb/District OR City/Town must be completed.Postal Code: - MANDATORY cannot be blank.



2.3.2.2 Personal Tab

Address - to contain the employee's 'Postal' address.E-Mail address - both fileds have been extended to 62 characters.

2.3.3 Taxation Tab - Employee Tax Record

The 'Tax Reference Number' is now mandatory and needs to be advised on the employee's taxrecord.

NB: The number must be a valid 10 digit number if not the follow message will be displayed toscreen.



2.3.4 Payment Tab

2 screens have been changed.

Payment Tab screen - eMail filed extended to 62 characters.Banking Detail screen - relationship field added.

2.3.4.1 Payment Details Screen

eMail to - extended to 62 characters.



2.3.4.2 Banking Information Screen

Banking details are MANDATORY if an employee is paid by electronic transfer.

Bank Code - please check that the bank code is 'Valid' ie: contains 6 digits and the description ofthe bank and branch display correctly to the right of the code.Payee name - OPTIONAL, enter the account holders name.Relationship - MANDATORY (from 2011) if employee's salary paid into a bank account.

2.4 Check Actions for Correct Tax and IRP5 Reporting Categories

The SARS Reporting codes are available on the SARS Website www.sars.gov.za documentnumber AS-PAYE-05

ALL actions should be checked at the beginning of each Tax Year that they have been specified togo to the correct 'Tax' and 'IRP5' categories.

Running the 'Logical Integrity Check' will pick up if there are any errors in your action setup.

NB: If this is done at Tax Year end, or some action/s are found to be incorrect, then NO ManualAdjustments would have to be made on the Employee's Tax Record as when the action iscorrected the employee's tax record will be retrospectively corrected at the same time.

NB: Prior years WILL NOT be corrected.

2.4.1 Logical Integrity Check

This is COMPULSORY!!!The logical integrity also checks the setting of the 'subject to UIF and SDL' action switches.

The integrity check will IDENTIFY illogical 'Tax Reporting' vs 'Tax Category' setup errors. Iffound, a log will be written with recommended actions.



NB: It is imperative that the Integrity Check is run on ALL payrolls to ensure that there are noerrors in regard to actions that have not been switched on as 'Subject to UIF' on the 'Rules' tab ofthe action. Also the logical checking of 'Tax Categories' to 'Reporting Categories MUST bechecked if any errors occur on the Log.

If there are errors that you need assitance with, please log your request for assistance onthe D-BIT HELP DESK.

2.4.1.1 Processing the Logical Integrity Check

Open D-BIT Payroll->Go File->Select Integrity Check->Select Payroll->Tick on 'Check logicalIntegrity'->Click 'Next->Click 'Finish'->System will start processing->Click 'Error Log' to get listingof errors.

Highlight the company.Click 'Next'.

Click 'Finish'.



If there are any errors reported.Click on 'Error Log'.

2.4.2 Printing of Action System Listing

This report lists out whether the action is applicable for COIDA, UIF, Retirement FundingIncome , it also shows which Tax Category and IRP5 Category is being used.

NB: RSC Levy no longer applicable from 1st July 2006

Select->Reports->Configuration->System Action Listing

Select 'Reports'.

Select 'Configuration Reports'.

Select 'System Action Listing' and the following screen will be displayed.



Click on Print and the report will be displayed.

i) Check the actions Tax and IRP5 categories.ii) Check actions in the following tax categories are ticked on for:

SDL (Skills Development Levy) + Taxable Income

NB: Please refer to the following Website for further information regarding SDL and remunerationincluded for SDL. www.sars.gov.zaUIF (Unemployment Insurance Fund)

NB: Please refer to the following Website for further information regarding UIF and remunerationincluded for UIF. www.sars.gov.za

2.4.3 Individual Check of Actions

Select->Maintenance->Payroll Maintenance ->Action Maintenance -> Use Finder and double clickon action -> Click on Rule Tab -> check tax category and IRP5 category.




Select 'Action Maintenance'.Select 'Rules' tabCheck the columns shown below on the relevant actions.

IRP5 CategoryTax categoryRetirement Funding IncomeSubject to COIDA (WCA)Subject to UIF

2.5 Check Tax Start and End Dates for Payrolls.

NB: In the case of Weekly/Fortnightly Payrolls it is imperative that the Start and End Dates ofthe Tax Year are correct prior to running the final February run.

To check follow the next procedure.



2.5.1 Checking Year End Dates

Go to Maintenance->Payroll Maintenance->Payroll Maintenance->Select Schedule Name->'Taxation' Tab->Double click on the 'New' Tax Authority created by the system->Check the Taxyear Start and End Dates that they comply with your tax year.



Select 'Payroll Maintenance', the following screen will be displayed.

Select 'Payroll'.Move cursor over the 'Pay Schedule' to get 'Magnifying' glass.Click and the following screen will be displayed.

Double click on 'New' Tax Authority and the 'Tax Authority Dates' screen will be displayed.

Check 'Tax Start' and 'End Dates', and change if necessary.

NB: NEVER change the start and end dates on the 'Tax Authority'. The Tax Authority mustalways be the start and end dates as specified by SARS.



2.6 Check Employee's Action History File

Behind each action held on the employee's masterfile is the history per period for the action. Thishistory is vital when running Tax Year End ie: the history is used for the calculation of COIDA,Printing of some of the year end reports.If this file is blank behind the action, some processes will be inaccurate.

Follow procedure below to check for the history file:

Go to->Maintenance->Employee Masterfile->Payslip Tab->Double click on any action->Go ToAction Details->Use down Arrow and select History Information.


Select 'Employee Masterfile' .

Double click on any action, the following screen will be displayed.

Go to 'Action Details' use down arrow and select 'History Information'.



If the screen is blank as shown above then an 'Integrity Check' can be be run to bring the historyfile in.

Follow procedures below.

Close Company->Go To File->Check Integrity->Select Company->Click on Re-Build Database andCheck Logical Integrity->Next->Select NPHEA History for NPEA Database->Click Finish

'Close Company'.

Click on 'Check Integrity'.

Select Company and click 'Next'.

Select 'NPHEA0 History for NPHEA00 Database'.

Click 'Finish'.

Now go back into the payroll and follow same procedure to check history on employee action. Thefile should now be there.



NB: If the 'History' file is empty/not for the entire 'Tax Year', this would then mean that the file iseither NOT in the data directory, or the file has been deleted/moved else where.

2.7 Clearance Numbers for Pension/Provident/RA Funds

NB: No longer applicable from the 2010 tax year.

2.8 Different Payrolls with Same Company Tax Reference Number

In the case of your company running 2 payrolls ie: Wages and Salaries and both payrolls use thesame Tax reference number, meaning that when IRP5/IT3(a)'s are generated they must appearALL on one Electronic file to SARS.

In order to achieve the above follow the procedures below.

If this is the case then the First Payroll ie Salaries IRP5/IT3(a) numbers must start with say 01 andthe Wages Payroll must start with 02.

To advise this follow these procedures.

Select->Maintenance->Payroll Maintenance->Payroll Maintenance->Select Payroll ie Salaries->Click on Shifts Tab->Enter 01 in IRP5/IT3(a) range->Save. Then select Wages Payroll and enter02.



Select 'Payroll Maintenance' and select the 'Shifts' tab, the following screen will be displayed.

Use magnifying glass to the right of the word 'Payroll' and select the relevantpayroll.Change IRP5/IT3(a) range.



2.9 Manual IRP5/IT3(a) Certificate Number Issued in Tax Year

If any employee's were issued with either a manual IRP5 or IT3(a) during the course of the taxyear, these numbers should be advised onto the employee's tax record.NB: These manual certificate numbers MUST be entered PRIOR to running Tax Year EndProcedures, so that the system does not generate an Auto IRP5/IT3(a) number for thoseemployee's.

Follow the procedures below to insert these numbers.

2.9.1 Advising Manual Certificate Number

Go to->Maintenance->Employee Masterfile->Click on Taxation Tab->Double click on CurrentYears Tax record->Click on IRP5 Tab->Tick in 'Manual IRP5/IT3a issued'->The manual cert. nowill now be opened to enter the certificate number issued->Click on Save.


Select 'Employee Masterfile' .Click on the 'Taxation' Tab and the following screen will be displayed.

Double click on the tax record for which 'Tax Year End' (ie: Current) is to be run.Click on the 'IRP5' tab and the following screen will be displayed.



Tick the 'Manual IRP5/IT3(a) issued' ON, and then enter the manual certificate number issued forthe employee.As you can see in the example above Tax Year End Procedures had been run prior to advising themanual certificate number.

NB: If this occurs where you forget to advise the manual certificate numbers prior to running TaxYear End Procedures, refer to Section 'Manual IRP5/IT3(a) to insert after Processing Tax YearEnd Procedures' in 'Help Guide to Resolve Incorrect Values and Missing Information'.

3 Foreign Currency

A foreign tax authority needs to be created for the current tax year.

3.1 Creating Foreign Tax Authority



Double click on the current tax authority.



Press the 'Insert' key and point your cursor in front of the 'A' and insert an 'F', and 'Enter'. thefollowing screen will be displayed.

Click 'Yes' and the following screen will be displayed.

Click 'No'.Click on 'Save'.

Tax Authority should be as above.

3.2 Add Start and End Dates to Foreign Authority

40Foreign Currency


3.3 Add Foreign Tax Authority to Employee

Once the foreign tax authority has been created you need to add it to the employee/s tax record.



3.3.1 IRP5 Tab

42Foreign Currency


3.3.2 Advise YTD Foreign Income

3.4 Running SARS Disk



3.4.1 SARS Disk

3.4.2 Tax Certificate

44Processing Tax Year End


4 Processing Tax Year End

4.1 Backup

NB: Please ensure that there is a Backup of the February payroll PRIOR to accepting.Also when ALL checking has been done under Section 'Check List Prior to Running Tax yearEnd' and you are happy, then you can accept February.

There are 2 Backup facilities available.1. A backup that can be done from the Backup Icon.2. An Automatic backup which is automatically done on accept of a payroll.

4.1.1 Backup from Icon

Follow Backup procedures below:

Go to->Backup->Select Backup Folder, Advise meaningful description of backup->Click on BackupNow tab->System will process backup and when finished a message will come up sayingCompany's data successfully backed up!->Click OK.

Select 'Backup'.

Select 'Backup Data'.

Enter Backup Folder ie: where you wish the backup to be written to, and enter a meaningfuldescription for the backup.Click on 'Backup Now ' tab.System will process backup and a message will be displayed as shown below.



Click 'OK'.

Go back into the Backup Icon and check that the Backup appears in Existing Backups.

4.1.2 Automatic Backup

Follow procedure below to setup the automatic backup.

Go to->Configuration->Click on Company Profile->Company Profile screen will be displayed->Clickon Run Time->Tick ON Automatically backup before accept->Click on Apply.


Select 'Company Profile'.Click on 'Run Time' Tab.

Tick ON Automatically backup before accept.Click on 'Apply' tab.

Once you have switched the automatic backup on, whenever you accept your payroll a backup willbe done and written to a Sub directory in the Data directory .

4.2 Accept Final Payroll

Once you are happy with the final February run (for weekly/fortnightly payrolls this would be thefinal week/fortnight for February in order to finalise February Month End.) this run MUST beaccepted in order to retrieve all values from the tax year start until the final run of February.



Accept February Payroll

Go to Processing->Payroll Processing->Next->Select Payroll to Accept->Next->Double Click onAccept Payroll->Type in Capital Letters 'YES'->Click OK->System will then process the accept->Click OK.


Select 'Payroll Processing'.The following screen will be displayed.

Click on 'Next'.

Select 'Payroll' to accept.Click 'Next'.



Double click on 'Accept Payroll'.

Type in capital letters 'YES' and click 'OK'. The system will start processing the acceptance of thepayroll wait until the screen displayed comes up in the right hand corner of your screen.

4.3 Tax Year End Procedures

Once you have accepted the final run for February you may then continue with the next periodspayroll input. On accept the system generates the New Tax Authority for the new tax year, this isadded to 'Live' employee's. The previous years tax authority is closed with a record status 'YearEnd Complete', which means that the first run of the tax year can be run and will have no effect onthe previous years tax records.

4.3.1 Prior to running Tax Year End Procedures - Import Tax Reference Numbers

NB: Prior to running any tax year end procedures please ensure that you have imported SARSITREG file with the registered employee's tax reference numbers.



4.3.2 Perform Tax Year End Procedures

NB: Tax Year End Procedures have to be run individually for each payroll within the company ie: if3 companies then this procedure must be run 3 times.

Go to Processing->Tax Year End->Perform Tax Year End Procedure->Next->Enter Tax Authorityto be run ie: current tax year and payroll->Tick on (if first time procedure is being run) Re-numberIRP5/IT3(a) certificates and scan for action clearance numbers->Finish.An information screen will be displayed to show that the system is processing, when finished amessage will be displayed saying 'Process Completed Normally'.

The next step now should be to validate the Electronic Return->Click Ok. This will then return youto the Tax Year End screen.



Select 'Tax Year End Procedures'.The following screen will be displayed.

Click 'Next' and the following screen will be displayed.

Tax Authority - The 'Current' tax year will automatically be displayed.Payroll - select the payroll that you are running the year end procedures for.Submission period - Select 'Tax Year End'.'Re-number IRP5/IT3(a) certificates' a will be automatically on.



Click 'Finish'.The following screen will be displayed.

Click 'OK' and the following screen will be displayed.

Click 'OK' and the following screen will be displayed.

Click 'OK'.

4.4 Balancing Procedure for Tax Year End

4.4.1 Print Summary Page of Tax Certificates

Print the summary/last page from IRP5/IT3(a) certificates.





Select 'Tax Certificates'.

Select 'Tax Year' for which you want IRP5/IT3(a) certificates.'Print Summary Page? - if ticked 'ON' the summary page will print.

Certificates will be displayed on screen.Click 'Print' and select only last page.



4.4.2 Tax Schedule

This report contains the YTD Tax deducted and the YTD Gross Pay values. These value areextracted off the employee's masterfile 'Taxation' tab under YTD Values.

Go To Processing->Tax year End->Tax Schedule->Enter Selection Criteria of Current TaxAuthority if any other selection needed ie: If you wish to print for one payroll, select that payroll->Print.



Select 'Tax Schedule'.The following screen will be displayed.

Enter current Tax Authority and any other selection required.Click on 'Print' and the report will now be displayed on screen.

4.4.3 Print SARS IRP501 Reconciliation

D-Bit SARS IRP501 Reconciliation Report

This report lists out the value of tax per month that was deducted. The values on the report havebeen extracted from the employee's 'Tax History File'.

This information is required on the 'IRP501' return for SARS when submitting electronic file.

Go to 'Processing'->Tax Year End->SARS IRP501Reconciliation->Enter Selection Criteria, CurrentTax Year and Run Id must be selected->Print

The following screen will be displayed.



Enter the current tax year and the Start and End RunId's, and any other selection required thenclick on 'Print'.The report will now be displayed on screen.

4.5 Tax Year End NOT Balancing

4.5.1 Recon Tax Liability Schedule

If tax at year end not balancing:

Print Recon Tax Liability Schedule

This utility/report is run when the Tax deducted YTD on the 'Tax Schedule' and 'Tax LiabilitySchedule' do NOT match. The utility will print out the affected employee's and display in RED inwhich period the YTD tax does not match.

Go to 'Processing->Tax Year End->Recon Tax Liability Schedule->Enter Selection Criteria, CurrentTax Year must be selected->Print



Select the current tax authority.Next to 'Tax Liability Exception' tick ON 'Print' and 'Summary'.Click 'Print' the utility will process and the report will the following screen will be displayed.

If you want the graphs to be displayed on the report tick ON 'Yes' utility will process and the reportwill then be displayed.



4.6 Other Balancing Reports

4.6.1 Action History Report by Month/Link Action History Report by Month

This report lists out values from the 'Main' action (ie: if there is a link action to the main action,these link values can be found on 'Link Action History Report by Month' by month, split intoEarnings, Deductions, Employer Contributions, Fringe benefit and Dummy.These values are extracted off the employee's 'Action History' file which holds ALL valuespaid/deducted to the employee per pay period.

For the purposes of Tax Year End this is a very good report to use to check employee's valuespaid and deducted in the tax year,and to balance to other Tax Year End reports.

NB: If you have not updated your programs the latest report will not be available.

Go to 'Reports->History Reports->Action History Report By Month->RunID must be selected ascrietria->PrintIf any other selection needed ie: If you wish to print for one payroll, select that payroll->Print.

Enter the 'Start' and 'End' RunId's and any other selection required and then click on 'Print'.The report will now be displayed on screen.

Link Action History Report by Month

This report lists out link values from the 'Link' action (ie: if a Link action has been advised on aMain action) by month, split into, Earnings, deductions, Employer Contributions, FringeBenefits and Dummy.These values are extracted off the employee's 'Action History' file which holds ALL valuespaid/deducted to the employee per pay period.

Go to 'Reports->History Reports->Link Action History Report By Month->RunID must be selectedas crietria->Print



If any other selection needed ie: If you wish to print for one payroll, select that payroll->Print.

4.7 iF Tax Year End Balances

If the tax Certificates and Tax Schedule balance to the 501/Tax Liability Schedule then proceed toGenerate a 'TEST' disk for SARS.

4.7.1 Validate SARS Return

Go to Processing->Tax Year End->Double click on 'SARS Return'->The SARS Electronic screenwill now be displayed->Enter Tax year, income Type = 'Rand Income' (if foreign currency) 'ForeignIncome', Date created, Disk No = if first disk 0001, Output format (if test disk advise 'Test' etc),append to existing disk = blank eg: if either only one payroll or if first payroll being created, ifsecond or foreign currency tick this box, then enter all creators details->Check all default tabs and->Click on 'Validate'.



Select 'SARS Return'.The following screen will be displayed.

NB: PLEASE ENSURE THAT THE 1st TWO SCREENS HAVE BEEN CORRECTLY ADVISED,THE 3rd SCREEN IS OBLIGATORY.



1. This Disk - Mandatory2. Tax Authority - Mandatory3. Defaults - Obligatory

Validate

This procedure is mandatory and has to be run when run prior to being able to generate the SARSdisk successfully. The system will perfom the validation checks and give a log of validation errorsto be corrected.

This Disk

Tax Year = Current tax year (2011)Period = for February 02 and for August 08Income type = Rand Income (if foreign enter Foreign Currency)Date = Date disk is being generated MAY NOT BE GREATER THAN CURRENT DATE!!!Trade Class = This is the trade class your company is registered.Output format = Test (Change to 'LIVE' when file is ready to be uplifted to e@syfile)Source Payroll = Payroll/sAppend to an existing disk = tick on only if 2nd company being run with same tax referencenumber or foreign income, creators information.Test validation before tax year end - enable you to validate SARS requirements at any time ofthe year.Used relaxed validation for February 2010 - this is automatically ticked on to obey the relaxedvalidations from SARS.

Tax Authority

NB: Creators PAYE Number, Postal Address and Postal Code are Automatically displayed fromthe information advised on the 'Tax Authority Maintenance' screen.If this information has changed/incorrect, please correct on:

Tax Authoritiy

Enter Contact Person and Contact Number

Defaults

This screen is obligatory, and only need be advised if you wish the system to make certain defaultswhile creating the SARS Disk.

NB: NEW Switch to validate SARS Tax Calculation, the default is always on..



This screen is obligatory, and only need be advised if you wish the system to make certain defaultswhile creating the SARS Disk.

NB1: The employee's data files WILL NOT be updated with the defaults,

NB2: It is D-BIT's recommendation that you DO NOT 'Tick' on any defaults when running theSARS disk for the first time( validate SARS tax calculation is an automatic default ON), rather getthe list of validation errors, so that this information can be corrected at a later point in time.

PROCESSING 'VALIDATE' TABClick on the 'Validate' tab sytem will process validations.

If the are errors a message will be displayed.

Click 'OK' and the error/warning log will be displayed.



NB: ALL VALIDATIONS MUST BE CLEARED PRIOR TO GENERATING THE SARS DISK.

4.7.2 Generate LIVE Disk

NB: If validations were run successfully and you exit the SARS Return, when you re-enter thevalidations must be run again and then generation of the disk may be run.NB2: Set as a 'LIVE' disk.

Click 'OK' screen will be displayed where you can save the created disk at a destination of yourchoice.

Click 'Save'.

Click 'OK'.The following report will be printed once the file has been saved.



4.7.3 Print IRP5/IT3(a) Certificates

NB: ONLY print certificates when the 'LIVE' disk has been successful.

Print Summary Page? - tick if you want the last page with the totals to print. If you are printing onecertificate then do not tick this on.Save document to disk? - tick if you would like to save the certificates to a directory or othermedia.Use CTWEBLink order? - for labour brokersUse PDF format? - tick id you want the certificates printed in PDF.Publish to image file? - tick if you would like the certificates stored in to the 'Image' file in yourdata directory file called NPIMAGE. You will then be able to go to view/print certificates foremployee's from maintenance->Image Maintenance.

Below is the 2 Page Tax Certificate:

Page 1 - Demographic Information



Page 2 - Financial information for the employee.

4.7.4 Tax Certificate Numbers

This report lists by employee either Auto IRP5/IT3(a) numbers (ie: certificate numbers generatedfor employee's when running Tax Year End Procedures), or Manual IRP5/IT3(a) numbers IF theywere advised onto the employee's tax record.

This information is required on the 'IRP501' return for SARS when submitting electronic file.

Go to 'Processing'->Tax Year End->Tax Certificate Nos Schedule->Enter Selection Criteria,Current Tax Year must be selected->Print





Select 'Tax Certificate Nos Schedule'.The following screen will be displayed.

Enter the current tax year, and any other selection required.Once selection made click on 'Print' and the report will be displayed on screen.

5 Adding Manual IRP5/IT3(a) numbers after Tax Year EndProcedures run

Where manual IRP5/IT3(a) numbers were ommitted, and Tax Year End Procedures have beenprocessed, follow procedures below.

1. Advise the manual IRP5/IT3(a) numbers as per section titled 'Manual IRP5/IT3(a) NumbersIssued'

2. Go and re-run Tax Year End Procedures, and 'Tick' on that the system must re-numberIRP5/IT3(a) cerificates.This is coverd in Section entitled 'Tax Year End Procedures'.

6 SARS e@asyFile Reconciliation

FOR FURTHER INFORMATION PLEASE REFER TO SARS WEBSITE www.sars.gov.za fortheir updated downloads of manuals and latest 'EasyFile'

RECONCILIATIONS (IRP 501)18.1 OBLIGATION OF EMPLOYER TO SUBMIT A RECONCILIATION� Paragraph 14(3) of the 4th Schedule prescribes that the employer is obliged to furnish areconciliation statement showing details of the total amount of employees' tax deducted or withheldas well as the details of IRP 5 certificates issued during the tax year.The purpose of the reconciliation is to �

· Reconcile the amount of employees' tax which was declared and paid over to SARS on themonthly EMP 201 returns, with the tax reflected on the IRP 5 certificates issued for that tax

· year; and· Justify all issued, cancelled, lost and destroyed IRP 5 certificates.

62SARS e@asyFile Reconciliation


The IRP 501 reconciliation statement must be submitted to your local SARS office within �· 60 days after the end of the tax year or alternate period; or· 14 days after you have ceased to be an employer.

6.1 2012 Submission Period

Will start on the 2nd April 2012 and will be open for 2 months as usual.

6.2 No Returns for Half a Million Taxpayers

From the 2008 tax year taxpayers who earn up to R120 000 a year from a single employer andwho have no additional income or deductions beyond those reflected on their tax certificates do nothave to submit a tax return!

6.3 EMP 501

RECONCILIATIONS (EMP 501)

SUBMISSION OF A RECONCILIATION

· In terms of Paragraph 14(3) of the 4th Schedule, the employer is obliged to furnish areconciliation statement

The purpose of the reconciliation is to �· reconcile the amount of employees' tax which was declared and paid over to SARS on the

monthly EMP 201 returns, with the tax reflected on the IRP 5 certificates issued for that tax year.· justify all issued, cancelled, lost and destroyed IRP 5 certificates.

· TheEMP501 reconciliation statement that is automatically sent to the employer must be FULLYcompleted by the employer.

Where an employer submits his / her IRP 5 and IT 3(a) certificates to SARS on an electronicmedium, the employer must also account for all IT 3(a) certificates (which were combined into onefile with the IRP 5 certificates) on theEMP 501 reconciliation statement.· TheEMP 501 reconciliation statement must be submitted to your local SARS office within �

60 days after the end of the tax year or alternate period; or 14 days after you have ceased to be an employer.

6.4 EMP 601

The EMP601 will remain the same as the form that was used for the 2008 Tax Year. Employerswill use this form to cancelIRP5s/IT3(a)s that were previously submitted to SARS. Cancellation of certificates can take placein two ways:· Cancel individual certificates by capturing individual certificate numbers into the EMP601. This

method of cancellations should be used for cancelling certificates when smaller volumes ofindividual certificates are to be cancelled or when certificates to be cancelled do not containsequential numbering; and

· Cancel certificate ranges by capturing Certificate From and Certificate To details within theEMP601. This method of cancellation should be used when Employers want to cancel entire



6.5 EMP 701

f any adjustments need to be made to a prior years reconciliation; these adjustment should becompleted on the EMP701 form and not be included in the current years Reconciliation.Completed EMP701's must be accompanied by the relevant certificates and or EMP601(submitted manually, electronically or in the CSV file format);· Employers must submit an EMP701 to replace previously submitted certificates where changes

in liabilities and/or individual IRP5/IT3(a)s are required;· The EMP701 can also be used to add or cancel certificates to a previous years declaration;· When submitting an EMP701 Employers should indicate the total change in liability for all

certificates per transaction year; i.e. the summed value of the changed liabilities for all thecertificates and not the individual changed liability per certificate;

· When certificates are submitted with the same certificate numbers as previously submittedcertificates, the original certificates will be replaced by the newly completed certificates � this isapplicable when Employers wish to increase or decrease a liability for an existing certificate;

· When certificates are submitted with new certificate numbers these certificates will be added tothe Employers prior submission and the Employers liability will be increased accordingly � this isused when adding to an Employers previously declared liabilities;

· No negative amounts may be submitted on the IRP5/IT3(a);· If an Employer wants to change the declared liability due the cancellation of a certificate the

Employer must submit an EMP701 indicating the change in the declared liability. An EMP601denoting the cancelled certificates must accompany the submission of the EMP701;

· Certificates may only have local income or foreign income specified in the certificate � a

6.6 Credits With Finalisation

Paragraph 11B(5) of the 4th Schedule prescribes that the employer must refund any overdeduction of employees' tax to a SITE-only employee with the final determination of the SITEliability. Such refund may be deducted from any subsequent payment of employees' tax due by theemployer or may be refundd by SARS.If the employer requires that the credit be carried forward to a specified month or refunded to him /her, a written request must accompany the IRP 501 reconciliation with a full explanation andinstructions thereto.

6.7 Completion of EMP 501 Reconciliation Statement

In order for SARS to finalise an employer's reconciliation, it is important for the EMP 501 to becompleted correctly. CompletedEMP 501's and IRP 5 certificates issued by employers that areillegible, incomplete or do not comply with the validation rules will not be processed and will resultin additional queries and the rejection of certificates and EMP 501's.The following must be borne in mind when completing a reconciliation �The employer's liability must be completed in the appropriate block (liability according to theemployer's records) on theEMP 501.· The total liability (according to the employer's records) must be completed in the appropriate· The total tax value of all certificates issued (excluding cancelled certificates) must be completed· Any difference between the tax value of certificates issued and the total liability must be

explained on theEMP 501. However, if the liability amounts are declared correctly and allcertificates are issued correctly, there should not be a difference.

The numbers of the CERTIFICATES ISSUED (excluding manual IT 3(a) certificates) must be indicatedin the appropriate block on the EMP 501. This includes certificates that have been cancelled.

· The numbers of the certificates cancelled (excluding manual IT 3(a) certificates) must beindicated in the appropriate block on the EMP 501. The certificates indicated as cancelled mustalso be indicated as issued.

· The numbers of the manual certificates lost / destroyed (excluding manual IT 3(a) certificates)

64SARS e@asyFile Reconciliation


must be indicated in the appropriate block on the EMP 501. Electronic certificates cannot beindicated as lost/Destroyed.

· The employer must sign the EMP 501 reconciliation statement for declaration purposes. Whensigning the declaration, the employer confirms that the liability amounts completed by him / herare correct and the benefits enjoyed by employees were declared on the certificates issued. Ifthis part is not signed, the EMP 501 will be returned to the employer and regarded asoutstanding.

· The original EMP 501 reconciliation statement including the first copies of the manual IRP 5sissued and electronic media (if any) must be submitted to SARS.

· The first copy of the manual IRP 5 (copy which must accompany the EMP 501 reconciliation)must be kept until the end of the tax year when the reconciliation is submitted to SARS.

· Where the employer exercises an option in respect of an alternate period in relation to a certainclass of employees, you will have different dates for the submission of your reconciliation.

However, for the remaining staff, the tax period will still end on 28 / 29 February. As you mustrender only one reconciliation for a tax year, permission is granted to employers with differentclosing dates to submit the reconciliation within 60 days after the last closing date.o For example, an employer exercises an option in respect of the administrative staff whereby thealternate period ends on 9 March, while the period in respect of the remainder of the staff ends on28 / 29 February. As only one EMP 501 reconciliation must be submitted within 60 days after theend of the period, the 60-day period will be determined from 9 March.· Where the employer submits his / her IRP 5 information to SARS on an electronic medium,

no hard copies must accompany the IRP501 reconciliation.Copies of the manual IT 3(a) returns are not submitted with the IRP 501 reconciliation to SARS,but must be rendered under cover of an IT 3, unless the employer submits the IT 3(a) informationin one electronic file which is combined with the IRP5 certificates on an electronic medium.

7 Electronic Certificates

INFORMATION FROM EMPLOYERS GUIDE FOR FURTHER INFORMATION PLEASE REFERTO SARS WEBSITE www.sars.gov.za

· Employers may print their own certificates according to the prescribed standards. Thoseemployers who choose to print their own certificates, must supply the certificate information toSARS in the prescribed format on an electronic medium. No pre-printed certificates will beissued by SARS for this purpose.

· Employers may use both the manual and electronic format certificates but employers whocannot print their own certificates and submit certificate information on an electronic mediaaccording to the prescribed standards, must use manual certificates.

No paper copies of the printed certificates may be submitted to SARS for reconciliation purposes.· If a certificate was generated electronically (employer prints his / her own certificates) the SARS

logo may NOT be printed on these certificates.

7.1 Issue and Submission of Electronic Certificates

The certificates must be printed and handed to the relevant employees and the certificateinformation must be supplied to SARS in an electronic file layout as prescribed in AS-PAYE-05-A4on the specified electronic media together with the EMP 501reconciliation.The employer must retain the electronic certificate information for a period of five years.Hard copies of the certificates will not be accepted.



7.2 SARS Validation Rules

Validation rules are set out in SARS document AS-PAYE-05-A3

7.3 Rejections

An electronic certificate will be rejected if it does not contain the mandatory information asrequired or where the tax deductions were calculated incorrectly. Where a certificate is rejected, itwill immediately be cancelled and referred to the employer. No tax credit willbe allowed to the employee on assessment. In such a case, a new certificate must be issued to theemployee and the new certificate information must once again be supplied to SARS with a revisedIRP501 reconciliation.

7.4 Zipped Files

SARS does not accept electronic files that have been zipped by any computer program.

7.5 Duplicate Certificates

Paragraph 13(8) of the 4th Schedule prescribes that the employer must, at the request of his / heremployee or former employee, issue a duplicate certificate and such duplicate certificate mustdisclose the full details of the original certificate.

7.5.1 Manual Certificates

A duplicate IRP 5(a) certificate or a replacement IT 3(a) return must be issued.The duplicate IRP 5(a) must refer to the original certificate and the original IT 3(a) return must becancelled if a replacement is issued as a duplicate.

7.5.2 Electronic Certificates

A re-print of the original IRP 5 or IT 3(a) certificate must be done. The same certificate numbermust be used. Manual IRP 5(a) certificates may not be used to replace a lost electronic certificateor to issue duplicate certificates in respect of electronic certificates.

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