Along with all the other responsibilities associated with tax management in South Africa, businesses are reminded of their pay as you earn (PAYE) obligations towards the South African Revenue Service (Sars) – including the onus to issue IRP5 tax certificates to employees.
This is according to HR and tax legislation specialists at Human Capital Management and HR solutions services provider CRS Technologies.
Sandra Maritz, head of Legislation, says local companies have to understand and appreciate that there are serious repercussions for companies that don’t adhere to South Africa’s tax regulations.
“In order for Sars to assess the total tax liability due from an individual, they need to be informed of the accumulated income which the individual has received during a particular period, as well as the amount of the allowable deductions for this same period,” says Maritz.
“Generally employees are not informed of whether employers actually pay over the PAYE deducted from their remuneration to Sars. The reconciliation process is a way of determining that the PAYE deducted was actually paid to Sars,” she continues.