Pharsyde is doing a series of blog posts designed specifically to raise awareness with regards to statutory submissions. Business ownership overs a wide-range and long list of responsibilities and it is not uncommon for a small business owner to be unaware of the extent of his legal requirements. These posts cover the common statutory submissions: what they are, why they exist and when they are due. If you need more detail about a specific submission or help in getting it right, please give us a shout – we would be happy to go through them in detail with you.
If your business employs one or more person (including yourself) and pays them a salary, then you are required to register with SARS for PAYE, SDL & UIF. Please note that this registration is mandatory even if your employee is not earning enough to pay tax – they still have to pay UIF and UIF is collected via SARS.
PAYE is not actually a tax in and of itself, although it is often referred to as one. PAYE is a way for the government to collect a tax – income tax. Income tax returns are only submitted once a year, so to avoid a huge tax bill that you can’t afford to pay once a year, the government collects a portion of your income tax every month. It is deducted off your salary by your employer and paid to SARS as PAYE (Pay-As-You-Earn). You can find the deduction tables here. You do not need these if you are using a computerized payroll system.
PAYE is submitted to SARS on an EMP return every month. The EMP return includes PAYE, SDL and UIF. SDL & UIF are covered in separate blog posts.
The return and the corresponding payment are due to SARS by the 7th of the next month.
What does this mean for you?
Traditionally speaking, most companies pay their staff on the 25th of the month. This means that you are going to have your staff payroll finalised by the 25th – there should be no additions or changes after this date and your staff will have been paid what is due to them after their PAYE and UIF has been taken off.
You now have until the 7th of the next month to add up all the PAYE, SDL and UIF for all staff members and to declare this to SARS on your EMP return. If you have a good payroll program, it should do all of your calculations for you and produce an EMP report that you can use to complete your return. You can copy these figures onto the EMP and file.
Remember, SARS operates according to working days. This means that if the 7th of the month falls on a Saturday or Sunday, then your EMP return is due on the Friday before.
If you submit your return or your payment late, then SARS will charge a 10% late penalty and levy interest on the outstanding amount for as many days as it remains overdue. If you have an extremely good reason for submitting late (and honestly, the only reason they really accept is death or near-death), then you can apply to have your late penalty reversed, but they will not reverse the interest.
The SARS guide for employers can be found here.
Want some help making send of payroll and PAYE? Give us a shout!