The Department of Employment and Labour has published a notice guiding how earnings must be calculated and reported on the Return of Earnings (ROE).
The notice also outlines the documents that employers are required to submit online. Here is a summary of the key information related to the ROE:
- An employer shall include the following earning types with employees’ earnings (salary/wages) in the payroll for the declaration of ROE earnings:
- 13ᵗʰ cheque
- Service bonus
- Holiday bonus/pay/Christmas bonus
- Housing allowance/subsidy allowance
- Acting allowance
- Attendance allowance
- Overtime allowance
- Commission
- Danger allowance
- Grazing allowance
- To calculate earnings (assessments), the employer is required to submit,t but not limited to, the following:
- Detailed payroll report
- Audited/independently reviewed/compiled, signed annual financial statement
- SARS EMP501 / SARS Exempt Certificate
- Employee master file
- List of subcontractors
- Incident report
- Employment contract (for domestic employees)
To get a comprehensive overview of all the earnings, excluded earnings, what employers are required to submit and an example of how to calculate the earnings, we recommend downloading the Notice published by the Department of Labour to learn more.
Even though the notice provide details, a few questions remain regarding the notice, and Sage has requested clarification from the department:
- It is unclear whether this notice overrides previous notices that provided guidance on the calculation of ‘earnings’.
- The notice was published after the close of the 2024/2025 reporting period (2024 ROE), so it is assumed that it applies only to the 2025/2026 submission period (i.e., the 2025 ROE).
- The notice makes no reference to remuneration in kind, other than the cash value of food and quarters, leaving uncertainty about whether other benefits in kind should be excluded from the ROE.
- It is also not clear whether employer contributions to retirement funds and medical aid schemes must be excluded.
- The new notice does not distinguish between ‘regular’ and ‘irregular’ payments in determining what must be included in the ROE.
We will keep you updated once we have received more details in this regard.
Sharon: AME Country Lead
