Are you puzzled about all the deadlines, names and forms required by SARS?
Don’t worry, tax terminology is confusing for most of us! And it is for this reason that we at DATC have decided to break down on of the upcoming deadlines (Employer Annual Reconciliation) for you so that you can try and gain a better understanding of where your money is going, why it needs to be paid and what you need to do for the above-mentioned deadline.
For those of you that don’t understand exactly what Employer Reconciliation is, it is the process whereby an employer is required, by SARS< to submit accurate reconciliation declarations (known as EMP501 and if applicable EMP 601/701).
- How does it work?
ETI (Employer Tax Incentive) was started with the aim to encourage private employers to employ young workers by providing them with a tax incentive. This came into effect on 1 January 2014. Qualifying employers may claim ETI and reduce the amount of Pay-As-You-Earn (PAYE) payable to SARS.
Not sure whether you are a qualifying member or whether your employees are qualified? Not to worry, visit the SARS website to find out!
Remember, any amounts claimed for ETI on your Monthly Employer Declaration (EMP201) must be included in the spaces provided when completing your Annual Reconciliation Submission.
- What do you need to do?
When completing the Employer Reconciliation Declaration (EMP501) form you need to make sure that you enter the correct amounts for each month! You could also just get us to do it for you and therefore ensure 100% accuracy and save you time and effort too!
Reconciliation involves matching ALL tax due (liabilities) with all tax paid and then checking these against your total value of tax certificates issued. Remember, these 3 amounts should all be equal.
For a step-by-step break down on exactly how to go about the entire process, take a look at this handy guide from SARS.
- When is it due?
Employer Annual Reconciliation starts on the 1st of April 2016 and ends on the 29th of May (this is for the period 1 March 2015 to 28 February 2016).
If you require any assistance with your tax or accounting, please contact DATC today.
Please note some of the Information above is taken from SARS: http://www.sapayroll.co.za/Portals/12/Documents/TaxInfo/Dear%20Employer.pdf