Updated Post (20 May 2021)
A patch has been deployed for the RSA IRP5 on Release 5.5a/b
Updated Post (14 May 2021)
A patch has been deployed for the RSA IRP5 on Release 5.6a/b.
Please note: Release 5.5a/b will be deployed early next week
The IRP5 patch will resolve the following three issues related to IRP5 Code 4587:
IRP5 Code 4587 is a total value for the Exempt Foreign Employment Income on the IRP5 Certificate and File.
- We were including all IRP5 Codes that begin with 39xx to the calculation to determine the sum of IRP5 Code 4587.
- We were accumulating the values, including cents, on the Employee's Payslip to determine the sum of IRP5 Code 4587, instead of the truncated values that are printed on the IRP5 Certificate and exported to the IRP5 File.
- We were exporting a value of zero for IRP5 Code 4587 in cases where an employee got Foreign Income against IRP5 Codes not specified for inclusion in the calculation of IRP5 Code 4587, e.g. 3652 (Non-Taxable Income)
Original Post (11 May 2021)
We have become aware of the following errors on [email protected] during the 2020/2021 year of assessment:
- [email protected] error: " The value of source code (4587) 'xxxxxxx' cannot exceed the lower of R1.25 mil or the total of the values declared under foreign service income codes 'xxxxxx'
- Source code 4587 in the IRP5 file adds up the remuneration values on the payslip screen, where [email protected] adds the truncated values in the IRP5 file and then compares the two amounts to validate code 4587, resulting in the error.
- [email protected] error: " The value of source code (4587) 'xxxxxxx' cannot exceed the lower of R1.25 mil or the total of the values declared under foreign service income codes 'xxxxxx' when you have a value on source code 3901/3951
- The following error appears on [email protected] when the employee has a value on source code 3901/3951. This source code is changed to 3951 when Foreign Income (FI) is flagged on the payroll system. Source code 3951 must not be included in the calculation of source code 4587.
- [email protected] error: (" The value of source code (4587) 'xxxxxxx' cannot exceed the lower of R1.25 mil or the total of the values declared under foreign service income codes 'xxxxxx') when source code 4587 exceeds R1.25 mil
- The following error appears when the employee’s income on the foreign services source code 4587 exceeds R1.25 million
Code 4587 is only valid from 2021 year of assessment and is an information code which reports the section 10(1)(o)(i) foreign employment income exemption taken into account by the employer for PAYE purposes on the tax certificate. If the employee received foreign employment income but did not qualify for the exemption in terms of section 10(1)(o)(ii) of the Income Tax Act, then code 4587 will be zero. The exemption limit is R1.25 million per tax year, therefore, code 4587 cannot exceed this value.
Rules for information code 4587:
- If no foreign service income codes are completed, then code 4587 must not be completed.
- If any of the foreign service income codes allowable for the s10(1)(o)(ii) exemption is completed, then code 4587 must be completed.
- The value of source code 4587 cannot exceed the lower of R 1.25 million (the exemption limit) or the total of the values declared under the s10(1)(o)(ii) allowable foreign service income codes.
The following foreign service income source codes are included in the remuneration which qualifies for the s10(1)(o)(ii) exemption and which employers may consider for calculating PAYE, if all requirements are met:
- Income Source codes – 3651,3655,3656,3657
- Allowance codes – 3751,3763,3767,3768,3772
- Fringe Benefit codes- 3851,3852,3855,3856,3858,3859,3860,3863,3866,3867,3870,3875,3878,3879,3881,3883
Read more in the SARS Business Requirement Specification (BRS) 2020 release.
Refer to the IRP5 Code 4587 - Frequently Asked Questions
If you require any further assistance, kindly contact your Accountant, Tax Practioner, or Accredited Business Partner