Employers are assisted by the interim EMP501 reconciliation, says SARS, because it makes it easier to:

• make more accurate annual reconciliation submissions

• maintain an up-to-date employee database

• register employees for income tax purposes

There are two deadlines in each tax year. For the 2025 tax year the deadlines are:

• 31 October 2024 – 2025 Interim Reconciliation (for the period 1 March 2024 – 31 August 2024)

• 31 May 2025 – 2025 Annual Reconciliation (for the period 1 September 2024 – 28 February 2025)

• Payroll information must be verified

• Correct deduction of employees’ tax (PAYE), Skills Development Levy (SDL), and Unemployment Insurance Fund (UIF) contributions must be verified

• Deductions must reconcile with IRP5 / IT3(a) tax certificates

• Employment Tax Incentive (ETI) values claimed must be reconciled

• EMP201 returns must be reconciled with actual payments made to SARS

• EMP201 returns must be reconciled with EMP501 statements

• Employee information needs to be updated on eFiling

• Employees without tax numbers must be registered

• Employer’s Reconciliation Declaration (EMP501) needs to be submitted via the eFiling website or the e@syFile application

• Calculating PAYE liability incorrectly will result in the imposition of both penalties and interest. This includes corrections made on the EMP501 reconciliation, as any shortfall is attributed to the last month of the reconciliation period.

• If an employer submits their EMP501 late, administrative penalties will be charged. The penalty will equal 1% of the year’s PAYE liability, increasing each month by 1% (up to a maximum of 10% of the year’s PAYE liability).

• An employer who wilfully or negligently fails to submit an EMP201 or EMP501 return to SARS is guilty of an offence and could face a fine or imprisonment for a period of up to two years.