EMP201s (Monthly Employer Declarations) and EMP501s (Employer Interim Reconciliation Declarations) are two documents that the South African Revenue Service (SARS) requires registered South African businesses to complete and record on a monthly basis.
It is important for an employer to understand how these two documents should be completed and submitted as well as the information they contain.
Let’s consider the differences between the two and explore how they are interlinked.
EMP201
An EMP201 allows an employer to adjust and/or declare applicable Pay As You Earn (PAYE), Skills Development Levy (SDL), Unemployment Insurance Fund (UIF) and Employment Tax Incentive (ETI) payments made on behalf of the employees in their company for a specific or previous period.
A company needs to submit their EMP201 and the related payment by the 7th of each month. Where this day occurs over a weekend or on a public holiday, the submission and payment should be made by the last business day before the public holiday or weekend.
As an employer is responsible for administering its own tax account, it is critical that payment details shown are correct when a payment is made. The Payment Reference Number (PRN) and the allocation of the payment must be correct for PAYE, SDL, UIF and/or ETI on the completed EMP201.
EMP501
The EMP501 is the roll-up of the monthly EMP201s for a six-month reporting period.
Reconciliation declarations should be submitted twice during the year of assessment, namely for:
- The interim period which is for the six-month period of 1 March to 31 August.
- The annual period which is for the full year of 1 March to 28/29 February.
The interim-period EMP501 needs to be submitted by the end of October of each year with the filing season usually opening in the first half of September. The submission period for the annual EMP501 return opens in the first half of April with these requiring finalisation by the end of May of each year.
The EMP501 process forms a key part of the preparation and readiness for the individual tax filing season which occurs later on in the year once the EMP501 company returns have been completed.
The Connection Between the Two
Both the EMP201 and EMP501 returns are essential for the collection of statutory deductions by the employer and the payment of these to SARS. These returns are key pillars of the information that is reflected on an employee’s tax certificate (IT3a or IRP5) and forms a very important part of the statutory collections process for SARS as well as the Department of Labour.
Ensure that yours are completed accurately and in full, and submitted timeously to ensure compliance.
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