SARS PAYE compliance – employers must get it right

0
24

Micaela Paschini | Tax Attorney |  Tax Consulting SA  |  mail me  |


The South African Revenue Service (SARS) has signalled a stronger focus on Pay-As-You-Earn (PAYE) compliance. Furthermore, SARS PAYE compliance focus is highlighted in its 2023/24 Annual Report. SARS’s renewed attention includes a rigorous auditing strategy targeting employers. The aim is to ensure PAYE is accurately held and remitted.

With SARS’s enhanced focus on accountability, employers are urged to verify their PAYE matters complying with tax legislation. Consequently, meeting compliance standards are now more critical than ever.

Employers play a crucial role in the tax system by collecting PAYE from employees’ remuneration on behalf of SARS. SARS’s commitment to optimising PAYE collections increases scrutiny on non-compliance. Whether non-compliance is intentional or accidental, it could now lead to significant penalties.

SARS’s strategic focus: PAYE under examination

Employers with uncertainties regarding PAYE compliance must address these issues proactively to avoid complications.

Through its Specialised Audit division, SARS has expanded its audit operations to include comprehensive reviews of individuals and businesses. Furthermore, these audits particularly focus on PAYE compliance, as well as areas like the Employment Tax Incentive (ETI).

SARS’s auditors are equipped with advanced training and structured methodologies to identify non-compliance issues across various businesses. The emphasis includes desk and field audits, highlighting the importance of accurate PAYE with holding.

Key aspects of SARS PAYE compliance

The scope of PAYE audits now extends beyond basic payroll checks. Furthermore, SARS is closely reviewing all elements of PAYE withholding. This includes fringe benefits, ETI claims, and other forms of employee remuneration.

Properly accounting for fringe benefits, such as company vehicles or housing allowances, is essential to avoid further consequences. Therefore, employers must ensure all aspects of PAYE are handled comprehensively and accurately.

To support compliance, SARS has introduced updates that streamline processes and enhance oversight. These updates include refinements to directives and bi-annual PAYE submissions (EMP501). Additionally, enhanced eFiling options for third-party data submissions are also part of the developments. These measures aim to simplify compliance for employers while allowing SARS better insight into reported PAYE data.

Addressing PAYE non-compliance: proactive steps to consider

Ensuring PAYE compliance is vital for employers to maintain good standing with SARS. Non-compliance with PAYE obligations can result in penalties and reputational damage.

SARS’s investments in technology and training make the detection of discrepancies increasingly likely. Consequently, employers are encouraged to prioritise PAYE compliance to mitigate potential risks.

Navigating PAYE requirements can be complex. Accordingly, consulting a tax professional is a prudent step for employers facing compliance challenges. A thorough review of PAYE practices can preempt future issues, offering peace of mind and assurance of full compliance.


 



LEAVE A REPLY

Please enter your comment!
Please enter your name here