Fairway sa

Professional Accountants & Tax Practitioners

Fairway sa Professional Accountants & Tax Practitioners

EMP201 and EMP501 Submissions

What Are EMP201 and EMP501 Submissions?

Statutory amounts deducted and withheld by the employer must be paid over to the South African Revenue Services. An employer needs to complete and submit a monthly employer reconciliation (EMP201) This is the monthly payment declaration. The form EMP501 employer declaration presents the annual reconciliation of these payments.

Importance of EMP201 and EMP501 Submissions

By submitting these returns you ensure that your business complies with South African Tax Laws and regulations. Late and or incorrect submissions can result in significant penalties and interest charges. The South African Revenue Service imposes heavy fines and can in some cases decide to pursue criminal prosecution.

What is an EMP201 declaration return?

This form is used by the employer to declare the amounts deducted from the employer’s salary and include :

Paye-As-You-Earn (PAYE) : The amount of income tax deducted from the salary.
Skills Development Levy (SDL) : A levy at the prescribed rate contributed by the employer to develop employment skills and initiatives.
Unemployment Insurance Fund (UIF) : Contributions by the employer and employee to this statutory fund, provide short-term relief to employees when they become unemployed or are unable to work for short periods of time.
Employment Tax Incentive (ETI) : A reduction in the amount of pay-as-you-earn that the employer needs to pay that effectively lowers the cost of employing young people.

When and How Often EMP201 is Submitted

The monthly employer declaration form (EMP201) and payment is required to be submitted and paid no later than the 7th of each month. Should the 7th fall on a weekend or public holiday, then the return and payment must be submitted on the last business day before the weekend or public holiday.

EMP501 and Annual Tax Filing: How They are Related

The annual employer reconciliation declaration (EMP501) reconciles the amounts of pay-as-you-earn (PAYE), skills development levy (SDL) and unemployment insurance fund contributions (UIF) that were declared and paid monthly via the monthly employer reconciliation (EMP201) and needs to be submitted to the South African Revenue Services twice a year.

How EMP501 Differs from EMP201

While EMP201 provides a monthly summary of the deductions, the EMP501 serves as a reconciliation process to ensure that all payroll taxes have been accurately reported and paid. It also helps to identify any discrepancies between the amounts declared and the amounts actually paid. The EMP501 reconciliation includes the details of the employee tax certificates (IRP5/IT3(a)) issued for the tax period. These certificates summarize the total earnings and deductions for each employee. It provides essential data in employees individual tax returns and annual submissions.

When to submit EMP501 Reconciliation

The EMP501 reconciliation declaration is submitted twice a year. The interim or bi-annual submission is for the first six months of the year for the period from the 1st of March to the 31 of August and needs to be submitted before the 31st of October each year. The final reconciliation is done annually for the fiscal year and needs to be submitted before or on the 31st of May each year.

Failure to submit the EMP501 reconciliation accurately and on time, can result in SARS imposing heavy penalties and interest charges.

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