PAYE-easyFile-G001 REVISION:6 Page 5 of 137 1 INTRODUCTION The South African Revenue Service (SARS) constantly strives to improve its service offering to taxpayers. Changes introduced to SARS’ systems are a vital part of our vision to have a more accurate reconciliation process. More information at SARS’. What you as the employer should do: 1) Download the newest version of easyfile. 2) All employees who received a travel allowance or motor vehicle should be amended to include code 4582 that is the total value of travel allowance and motor vehicles. 3) Re-submit the EMP501 and send new updated IRP5’s to staff member.

1. Sars Easyfile Errors
2. Sars Easyfile Helpline
3. Download Easyfile

This articleis to assist you with all the IRP 5 codes needed to submit your EMP 501reconciliation. This is not a complete list, but the most important and most used ones.

Income codes:

3601 -Normal salary income

3605 -Annual payment (bonus)

3606 -Commission income

3610 -Normal salary income

3615 -Member's remuneration (Closed Corporation) / Directors remuneration (Company)

3616 -Independent contractor

3617 -Labour broker

Allowance codes:

3701 -Travel allowance

3702 -Travel reimbursement (taxable)

3703 -Travel reimbursement (non-taxable)

3715 -Subsistence allowance

Fringe benefitcodes:

3801 -General benefit

3802 -Company vehicle / right of the use of a motor vehicle

3805 -Cheap or free accommodation

3810 -Company medical aid contribution

Grossremuneration codes:

3696 -Gross non taxable income

3697 -Gross retirement funding employment income

3698 -Gross non-retirement funding employment income

Deduction codes:

4001 -Pension fund contributions (current)

4002 -Pension fund contributions (arrear)

4003 -Provident fund contributions (current and arrear)

4005 -Medical aid contributions

4006 -Retirement annuity fund contributions (current)

4007 -Retirement annuity fund contributions (arrears)

4474 -Employer's medical aid certificate

Employee's taxdeduction codes:

4102 -PAYE

Sars Easyfile Errors

4116 -Medical aid credits

4141 -UIF employer and employee contributions

4142 -SDL employer contributions

4149 -Total PAYE / UIF / SDL contributions

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Failure to be 100% ready for the PAYE reconciliation period at the end of May and the 1^st bi-annual reconciliation in August 2010 could result in a penalty of as much as 10% of the company’s total payroll, says Santana, an associate tax director at auditing and accounting firm BDO.

The new version of SARS’ [email protected] will make employers’ tax filing process easier in future – but right now, many companies are battling with the practicalities of [email protected]

Santana’s top hints and tips for employers are:

· Uploading Easyfile programme will overwrite all current data:

Before uploading new SARS’ [email protected], back up previous [email protected] and data file. Only then upload the new [email protected] and last year’s data. Once you upload current data the demographic details of employees will be available and you may only need to update current information required and the financial information.

· A change in the administrator’s password will result in all historical data being lost.

The administrator’s password is one of three passwords that are required when using SARS [email protected] for the first time. If the administrator’s password is misplaced or if the administrator leaves the company without passing it on to the new administrator, all historical data will need to be reloaded and current data would be lost. Therefore it is strongly advised that the passwords are kept in a safe place in the company such as the company’s safe, and a senior employee be tasked with its safekeeping.

· Log on failures

Downloads from the payroll onto [email protected] may generate a log on failure message. A log on failure message means that there is something wrong with the CSV file being transferred from payroll to [email protected] In order to establish the error, users are advised to review their ‘Business Requirements Specification’ document which can be found on the SARS website / Tax types section / PAYE. Once the error has been established, only then should they proceed.

· Error messages and validation problems should be printed and addressed well before the end of the PAYE reconciliation period

It is vitally important that validation error messages are printed so that administrators can go back into their Payroll between May and August to correct errors and do PAYE reconciliations in August without any delays.

Any error messages are an indication of a problem that needs to be addressed. Santana urges employers to address these problems sooner than later as employers may only be given a month in which to submit the August reconciliation.. Once again if the bi-annual reconciliation is not submitted in time employers will be subject to a 10% of their payroll as a penalty.

· Don’t cancel warning messages

When a warning message is reflected with the options to accept or reject, don’t select cancel. If the cancel option is selected, it may throw out the IRP5 form and will not include the PAYE in the final PAYE reconciliation. Santana advises payroll administrators to read the instructions carefully, take time to fill in the data and follow the instructions carefully before accepting or cancelling data. If in doubt, read the instruction carefully, refer to the SARS “Business Requirements Specification” document, phone your tax advisor or payroll administrator.

In the event that an error message is displayed, the first step to take is to refer to the SARS “Business Requirements Specification” document. All validation requirements can be found in the SARS Business Requirements Specification documents.

Sars Easyfile Helpline

· Read the SARS ‘Business Requirements Specification” documents on the SARS website

It is vitally important that the SARS “Business Requirements Specification” document is carefully and well-read as it gives employers a detailed outline of what information is required on the payroll before transferring from the payroll onto [email protected]

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Santana’s final word of advice? “Make the SARS website your tea time reading. There are updates and amendments everyday that are important to read.”