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Extension of Covid-19 PAYE Deferral relief (SARS notification)

SARS published a notice on their website on  August 2020 informing employers that the Covid-19 PAYE deferral is extended to include August 2020.

The amended Disaster Management Tax Relief Administration Bill containing this amendment has not yet been published, but it is confirmed that the amended Bill was passed by National Assembly on 26 August 2020, and will be published soon.

 Therefore, employers will be able to defer 35% of their PAYE of August 2020 as well (EMP201 deadline is 7 September 2020).

The employer will be required to pay the deferred PAYE (from April – August 2020) in 6 equal monthly instalments, commencing on the EMP201 of September 2020 (due 7 October 2020) until the EMP201 of February 2021 (due 5 March 2021).

Please click here to view the notice.

How will the PAYE deferral affect my interim / mid-year reconciliation EMP501 submission to SARS?

The deferral of PAYE will result in a difference in your liability declared on your monthly EMP201 and payments made to SARS.

The payroll application will provide details of the liability for PAYE, SDL, UIF and ETI calculated, however no records of payments made to SARS are recorded.

The EMP501 Reconciliation History report provides you to extract your liabilities and then complete your payment amounts, to determine any differences.

In months where the deferral was applied, there will be an expected difference on your declaration. Employers should provide the reason ”Deferred PAYE payment ito Covid-19 tax relief measures” when submitting their reconciliations in September/October, for the 6 month period March to August 2020.

Who will be able to assist me to apply the PAYE deferral correctly?

We recommend that to contact your accountant, bookkeeper, tax practitioner or SARS to assist you with completing and applying the deferral on your monthly declaration.