PAYE Biannual Reconciliation 2010
The first Pay-As-You-Earn (PAYE) biannual reconciliation
takes place from 1 September 2010 to 31 October 2010. The biannual
reconciliation is a six-month reconciliation for the period 1 March 2010
to 31 August 2010.
As part of its drive for better service, SARS has been
modernising tax processes over the past three years. The changes are a vital
part of SARS’s long-term vision to have a more accurate reconciliation
process. More information means a less cumbersome tax process, as tax
returns are increasingly pre-populated.
Employers would have heard about the biannual
reconciliation over the past two years, and again when SARS embarked on an
extensive communications campaign during the 2010 Employers Tax Season.
The Employers Tax Season has always marked the climax of
the tax year for employers, when employers submit their reconciliations for
the period 1 March to 28/29 February for PAYE, SDL and UIF. While the annual
reconciliation declaration will still be required for the full tax year
ending February, going forward the biannual reconciliation will also be an
integral part of the PAYE process.
What you should be aware of:
Registration of all employees in formal employment
SARS has relaxed the requirement for employers to provide
employees’ income tax reference numbers on the employee tax certificate
during this biannual reconciliation in September/October 2010, and will
provide income tax numbers to all employees who do not have one
subsequent to the biannual reconciliation. Employers are therefore urged
not to refer their employees to SARS at this stage.
Importantly, registration with SARS does not mean that a taxpayer is
required to submit an income tax return. The requirement to submit an income
tax return depends on the nature of a taxpayer’s tax affairs and income
generation.
Currently, you are not required to file a return if you earn under R120 000
a year from a single employer, and do not have a car allowance, do not have
additional income and do not have any other deductions.
Mandatory fields
During the annual reconciliation SARS relaxed the requirement for employers
to provide the latest information to improve the efficiency of the
reconciliation and submission process. These fields are now mandatory for
the 2010 biannual submission.
The advantage for employers is that they will have an up-to-date database of
their employees once they collate this information.
You are required by SARS to obtain the following demographic information
from all employees:
1 Initials, first two names and surname;
2 ID number;
3 Passport number and country of issue (where no SA ID number is available);
4 Date of birth;
5 Email address (where available);
6 Business, cell, home telephone and/or fax numbers;
7 Physical business, postal and residential address;
8 Directive numbers (where applicable);
9 Bank account (into which the salary, pension or annuity is paid) details,
including:
a Bank account type;
b Bank account number;
c Branch number;
d Account holder name;
e Account holder relationship (either own, joint or third party); and
f Bank name and branch name (optional).
The submission of tax certificates for the biannual reconciliation
The new requirement to submit tax certificates on a biannual basis will
assist SARS in streamlining its administrative processes, which, at the end
of the day will provide the backbone for an efficient PAYE and Personal
Income Tax system. As a result, the requirements for tax certificates
submitted biannually differ from those for tax certificates submitted at the
end of a year of assessment.
Please note:
Biannual tax certificates must not be issued to employees as they are for
SARS’s administrative purposes only.
However, the relevant certificate must be provided to employees whose
employment was terminated prior to the closing of the biannual period
(either due to resignation, death, immigration or an employer ceasing to be
an employer) according to the current process and legislation.
The new process also benefits employers, who will be able to provide a more
accurate indication of their PAYE status, identify payment gaps, and
reconcile and eliminate their own administrative issues on a regular basis.
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