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SARS [email protected]: Relaxed validations on IRP5 code 4587 (Exempt foreign employment income in terms of section 10(1)(o)(ii) of the Income Tax Act)

One of the new IRP5 codes for for the 2020/2021 tax year is 4587.

Code 4587 reports the exempt foreign employment income in terms of section 10(1)(o)(ii) of the Income Tax Act, taken into account by the employer for PAYE purposes.

This is to accommodate the amendment made to section 10(1)(o)(ii) of the Income tax Act effective March 2020 (please click here  for more information about the amendment).

The current PAYE BRS states that code 4587 cannot exceed the lower of R1.25 mil or the total of the values declared under foreign services income codes.

However, according to section 10(1)(o)(ii), only certain remuneration items can be exempted.

Currently, you might receive the following error message on [email protected]:

" The value of source code (4587) '...' cannot exceed the lower of R1.25 mil or the toal of the values declared under foreign service income codes '...'

Since the BRS does not contain any guidelines/validations for what IRP5 codes should be included in 4587 and what should be excluded, SARS will relax the validations for code 4587 for Interim Reconciliation (March -August 2020) submissions. 

There will be a new [email protected] release on Monday, 21 September 2020, which will contain the relaxed validations for code 4587.

If employers experience any errors with code 4587, we recommend that you wait for the new [email protected] release, as communicated by SARS.

The validations for code 4587 will be revised and clearly specified in an updated PAYE BRS for the February 2021 submissions.

Please click here to view the SARS notice.