Four weeks left to prepare PAYE submissions

Taxes

Taxpayers have just four weeks to prepare for the SA Revenue Service’s interim pay as you earn (PAYE) submission season, which commences on 1 September. There are important changes that will affect the PAYE reconciliation and submission process.

New legislation that took effect in March this year means medical aid contributions are no longer allowed as a tax deduction for employees under the age of 65. The medical aid capped amounts have also been replaced with medical aid tax credits.

“Companies that have not applied medical aid tax credits for the first six months of the tax year must correct this before they process their last payroll run this month (August),” says Laurica Kok, general manager at Softline Pastel Payroll.

“Those that do not have the correct medical aid legislation in place when submitting interim tax certificates will find that SARS will reject their submissions and they could face penalties for incorrect or late submissions.”

Kok adds that individual income tax reference numbers must be reflected in each submission. If one or more tax certificates do not include the tax reference number, the overall submission will be rejected.

“There are other important changes that will affect interim PAYE reconciliation submissions. These include a new interest rate for low or interest-free loans fringe benefits. Following the July reduction in the repo rate, companies must ensure that they apply the new official interest rate of 6% when calculating fringe benefits for August 2012.”

A new IT3(a) Reason code for tax certificates has been introduced by SARS for non-deduction of PAYE and must be applied on interim tax certificates. Code 08 will indicate a zero PAYE liability due to medical aid tax credits applied.

There are also new source codes for fringe benefits and tax deductions that must be applied to interim tax certificates, replacing the consolidated values SARS required prior to the 2012 tax year.

“Companies using up-to-date automated payroll software will find that all of these SARS PAYE requirements are implemented automatically, ensuring submission compliance.”

via Companies have just four weeks left to prepare SARS interim PAYE submissions | ITWeb.

Enhanced by Zemanta
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s