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South Africa Payroll - Payroll Taxes Validations (EMP501 submissions)

For the 2021/2022 year of assessment, SARS is performing ‘back-end’ payroll taxes calculations (validation process on PAYE and SDL) on the IRP5/IT3(a) certificates after the submission of the EMP501. If any errors are found by SARS, the employer will receive a “Payroll Taxes Validation Failure” letter.

The purpose of the Payroll Tax Validation letter:

  • To inform the employer of discrepancies on the amount of tax or levies that were deducted for employees. All the certificates submitted were accepted and processed and will be pre-populated on the employee’s income tax return (ITR12).
  • SARS is not validating UIF since the UIF remuneration is not stated on a monthly basis.

SARS has published information about the employment taxes validation (ETV) on their website. This information includes:

  • how to obtain the list of certificates which have failed PAYE and/or SDL validations/SARS calculations (i.e. the tilde (~) delimited text file),
  • how to understand the file layout, and
  • what to do if there are tax calculation differences

Please click here for more information.

Q: How can I validate my tax calculation in the payroll?

A: You can use the following tools to assist you if you want to validate the tax calculation in the payroll. Take not, the calculations in the payroll is based on factors e.g. service periods and income received.

Q: I received a notification "Invalid directive date issued", but the information I submitted is correct. What could be the issue?

A: Please review the following post for more information on this error: Employee Taxes Validation (ETV) Error - "Invalid directive date issued"

Should you require assistance with you investigation if you received a rejection letter, you can book a consultant here.