More useful information on EMP501 Reconciliation

Save time and avoid penalties with EMP501 reconciliation

Let us help you with your biannual EMP501 reconciliation. We have a specialised team of payroll administrators who will make sure your reconciliations are up to date and fully compliant.

Why is accurate EMP501 reconciliation so important?

An EMP501 is the report of all your staff earnings, required by SARS. It needs to be submitted twice a year and must be submitted before you can issue IRP5 certificates to your staff.

SARS has imposed high administrative penalties for each incorrect line item in an EMP501 reconciliation. All tax numbers, addresses and bank details must be completed in full before an EMP501 reconciliation can be submitted.

With SARS implementing the PAYE software system, it is also no longer possible to submit an EMP501 reconciliation manually. 

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 More useful information on EMP501 Reconciliation

What must I submit?

SARS follows an Employer Reconciliation process that governs EMP501 reconciliation. This requires you to submit an accurate Employer Reconciliation Declaration (this is the actual EMP501 reconciliation).

There are two other documents that you need to submit, if applicable. These are: a Tax Certificate Cancellation Declaration (EMP601) and a Reconciliation Declaration Adjustment (EMP701).

To ensure that your EMP501 reconciliation submission is successful, there are three elements that you must reconcile:

  • Monthly Employer Declarations (EMP201s) that you have already submitted
  • The payments you have made
  • Employee Tax Certificates [IRP5/IT3(a)s] you have generated

When must I submit everything?

EMP501 reconciliations must be submitted twice during a financial year:

  • Interim period – for the six month transaction period 1 March to 31 August
  • Annual period – for the full tax year 1 March to 28/29 February.

Your EMP501 reconciliation must balance across all three of the above elements. If it doesn’t, SARS will notify you that your reconciliation submission was unsuccessful.

It’s absolutely important to submit accurate reconciliations; otherwise a SARS rejection can create an additional administrative burden for your company. All the more reason why it pays to use experts to do this all for you.

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