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Pay-As-You-Earn (PAYE)

P.A.Y.E. Registration / Pay As You Earn (P.A.Y.E.) / January 16, 2018

Pay-As-You-Earn

.....According to law, an employer must apply for registration with the South African Revenue Service (SARS) within 21 days after becoming an employer, unless none of the employees are liable for normal tax. Application to register as an employer for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF) must be made on an EMP101e form – Payroll Taxes – Application for Registration

 

What is Pay-As-You-Earn?

 

Employees’ Tax refers to the tax required to be deducted by an employer from an employee’s remuneration paid or payable. The process of deducting or withholding tax from remuneration as it is earned by an employee is commonly referred to as PAYE.

 

An employer who is registered or required to register with SARS for PAYE and/or Skills Development Levy (SDL) purposes, is also required to register with SARS for the payment of Unemployment Insurance Fund (UIF) contributions to SARS.

 

Top Tip: The 2015 Employer Interim Reconciliation runs from 1 September – 31 October 2014,

 

Who is it for?

 

The amounts deducted or withheld must be paid by the employer to SARS on a monthly basis, by completing the Monthly Employer Declaration (EMP201). The EMP201 is a payment declaration in which the employer declares the total payment together with the allocations for PAYE, SDL, UIF and/or Employment Tax Incentive (ETI), if applicable. A unique Payment Reference Number (PRN) will be pre-populated on the EMP201, and will be used to link the actual payment with the relevant EMP201 payment declaration.

 

How and when should it be paid?

 

It must be paid within seven days after the end of the month during which the amount was deducted. If the last day for payment falls on a public holiday or weekend, the payment must be made on the last business day before the public holiday or weekend.

 

The following payment methods are available:

  • eFiling
  • Electronic payments through the internet (EFT)
  • At a branch of one of the relevant approved banking institutions. Cheque payments may not exceed R50 000. This limit applies irrespective of the number of tax periods being paid, or should multiple cheque payments be made.
  • At a specific SARS branch, cheque payments may not exceed R50 000. This limit applies irrespective of the number of tax periods being paid, or should multiple cheque payments be made.

 

Top Tip: The Employment Tax Incentive encourages employers to employ young workers by providing a tax incentive to the employers.


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Nivesh
Nivesh Mahadeo, Managing Director of ATB Consultants (Pty) Ltd, Accounting - Taxation - Business




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