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Income Tax Made Easy!

What would happen if your employer were to make an incorrect declaration of your earnings, be it accidentally or on purpose? Employers are dependent on the accurate and timely processing of their remuneration packages on a monthly basis. Employers who are unable to meet these expectations are likely to be branded as “bad” employers and will not only have unhappy staff, but result in compliance issues emanating from The South African Revenue Service (SARS).

Employees are required to submit their income tax returns on an annual basis. This year, those who are required to submit income tax returns are those who meet the below, new criteria, which were announced on the 1st of July 2019, when the Tax season was launched:

  • Their total employment income for the year before tax is not more than R500 000
  • They only receive employment income from one employer for the full tax year
  • They have no other form of income (e.g. car allowance, business income, and rental income, taxable interest or income from another job)
  • They don’t have any additional allowable tax-related deductions to claim (e.g. medical expenses, retirement annuity contributions and travel expenses).

When preparing for submission, employees are required to acquire their Employee Tax certificate, known as the  IRP5/IT3(a) which is provided to them by their Employer. This is generated as the result of monthly submissions from the Employer, of their EMP201 which is a monthly employers declaration of what the employer has paid in terms of PAYE, SDL, UIF as well as ETI, if applicable. From this monthly declaration, SARS is able to what an Employees total remuneration package is and then assess whether they have paid the correct amount of income tax.

This year, SARS has opened tax season in a staggered manner to promote the use of online filing as opposed to manual filing which has many South African’s taking leave of their place of employment to go and stand in long, slow-moving queues. Although SARS has certainly refined its services to ensure that no problems are experienced in the manual process, Tax Filers do face problems if they do not carry the correct documentation with them. This in term may result in multiple visits to SARS branches which can be costly for travel and time-consuming.

eFiling is SARS’s way of innovating their services to encourage more and more employees to submit their income tax returns electronically. While this may be daunting to first timers who are not accustomed the online process, SARS provides a number of support systems which individuals have access to and in addition, have extended working hours for the month of July 2019.

eFilers have until 4th of December 2019 to register and submit their income tax returns which is a period longer than the usual period of time allocated for manual submissions, which only opens on the 1st of August and closes on the 31st of October.

Innovative employers in turn, choose to modernise their technology and payroll systems and use trusted Payroll service providers who can offer then accurate payroll services which will not only assist the company with the processing of all aspects of their payroll, but will ensure that their Employees are able to receive the right information from their Employers, come tax season.