At the end of the tax year, the system calculates employees' final tax liabilities based on their remuneration for the year.
The system does not permit any changes to this final tax calculation during the last pay period or upon termination. However, we do receive requests from employers to amend these liabilities for various reasons.
Adjustments to the final tax deductions for employees aren't recommended, as this can lead to rejected tax certificates.
After submitting the EMP501 and certificates, the South African Revenue Service (SARS) will validate the PAYE and SDL on the IRP5/IT3(a) certificates. If errors are found, employers will receive a "Payroll Taxes Validation Failure" letter with details and must correct the liabilities. These corrections may result in penalties and interest.
If you receive a "Payroll Taxes Validation Failure" letter from SARS, follow these steps:
- Review the letter: Review the letter to understand the specific errors identified by SARS.
- Access the details: Log into your SARS e@syFile
application account to view the detailed report of the validation failures.
- On e@syFile: Go to Reconciliations , click on the Actions button, and then select “ETV Report”
- On e@syFile: Go to Reconciliations , click on the Actions button, and then select “ETV Report”
- Correct the errors: Identify the incorrect IRP5/IT3(a) certificates and make the necessary corrections in your payroll system.
- Resubmit the corrected certificates: Once the errors are corrected, resubmit the updated EMP501 and IRP5/IT3(a) certificates to SARS.
- Monitor for updates: Keep an eye on your eFiling or e@syFile account for any further correspondence from SARS.
For more details, refer to the SARS website: https://www.sars.gov.za/types-of-tax/pay-as-you-earn/employment-taxes-validation-etv/
Q: How can I validate my employee's tax calculation in the payroll?
A: Use the following tools to assist if you want to validate the tax calculation in the payroll.
Take note, the calculations in the payroll is based on factors e.g. age, service periods and income received.