Blog

The South African Revenue Service (SARS) has issued a crucial update that will impact every employer in South Africa. While the current 2025 employer interim reconciliation period provides temporary leniency, from February 2026 onwards, income tax reference numbers will become mandatory for all employees, without exception.

This change represents a major shift in employer compliance, and early preparation is key to avoiding penalties and submission rejections.

Current Position: Temporary Flexibility

 The current reconciliation submission period runs from 22 September to 31 October 2025, covering the first half of the 2025/2026 tax year (1 March to 31 August 2025). During this cycle, SARS has confirmed that submissions missing employee tax numbers will not be rejected, but that they will trigger warnings in the e@syFile™ system.

However, SARS has been clear: This flexibility ends soon.

The Upcoming Change

Starting from the 2026 employer filing season (i.e. February 2026), SARS will strictly enforce the validation of employee income tax numbers. This means that:

• Submissions missing even one employee’s tax number will be rejected.
• Tax certificates (IRP5/IT3(a)) cannot be generated without these numbers.
• Penalties and interest may be applied for non-compliance or delayed submissions.

SARS’ updated validation rules specify that:

• If the type of certificate (code 3015) is IRP5 and Pay-As-You-Earn (PAYE) (code 4102) is greater than zero, the income tax reference number is mandatory.
• If the type of certificate (code 3015) is IT3(a) and the reason code for IT3(a) is not 02 (earnings less than the tax threshold) and not 04 (non-taxable earnings (including nil directive)), the income tax reference number is mandatory.

Why SARS is making This Change

The enhanced validation is part of SARS’ broader goal to improve tax administration and compliance. By ensuring that every individual on payroll has a valid income tax number, SARS can:

• Accurately pre-populate individual tax returns for auto-assessment.
• Eliminate mismatches between employer submissions and employee tax records.
• Strengthen compliance across employers and the labour market.

Ultimately, this change will help to streamline the filing process for both employers and employees, while reducing the risk of audit queries and delays.

Actions that Employers must take now

Employers should act immediately to avoid last-minute compliance issues. Be sure to:

• Identify missing tax numbers by running payroll Tax Certificate Exceptions Summary reports to flag employees who do not yet have tax numbers. Your payroll system or e@syFile™ Employer will display these as warnings.
• Register employees for income tax numbers:

• Use e@syFile™ Employer or eFiling (ITREG/BundleReg process) to register or request Income Tax Numbers in bulk.
• Have employees visit the SARS website to register directly under “How do I register for tax?”.

If employees are registered for tax but do not know their tax number, they can retrieve it by visiting “I need my tax number” on the SARS website.

The Risk of Inaction

Employers failing to ensure that all employees are registered by February 2026 face significant risks:

• Rejected EMP501 submissions.
• Inability to issue IRP5/IT3(a) certificates.
• Administrative penalties and interest charges.

In short, a single missing tax number could delay your entire reconciliation submission and attract SARS penalties.

Early action will ensure a seamless transition into the 2026 filing season, saving time, avoiding penalties, and keeping your organisation fully compliant.