EFFECTIVE DATE

2010.04.23

EXTERNAL POLICY

COMPLETION AND SUBMISSION OF MONTHLY

EMP201 RETURNS

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OF MONTHLY EMP201 RETURNS
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 EFFECTIVE DATE
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1 SCOPE
 The purpose of this document is to assist employers in understanding their obligations relating to the
declaration and payment of their monthly liabilities in respect of employees’ tax, skills development
levy and / or unemployment insurance fund contributions.

 All statements refer to skills development levies as well as unemployment fund contributions.

2 POLICY STATEMENT

2.1 MONTHLY RETURN (EMP201)

 Paragraph 14(2) of the 4th Schedule prescribes that the employer must submit such declaration as the
Commissioner may prescribe when making any payment.

 The prescribed EMP 201 return will be —

 Automatically supplied (posted) by SARS to non-eFiler employers for declaration and payment
purposes each month.
 Supplied to eFiler employers on eFiling when requested with the relevant requesting function on
eFiling.

 A new format of the EMP201 return is prescribed by SARS with effect from 1 March 2010. Please
refer to the Guide for completion and submission of EMP201 (AS-EMP-20-G1) which is available on
SARS’s website www.sars.gov.za.

 All validation rules as prescribed in the above-mentioned guide should be adhered to. An
incomplete return will be deemed as outstanding and will not be accepted by SARS.

 Note: that faxed or emailed declaration will not be accepted by SARS.

2.2 MONTHLY PAYMENT

 Paragraph 12(1) of the 4th Schedule prescribes that every employer (who is a resident) or
representative employer (where the employer is not a resident), who pays or becomes liable to pay
any remuneration to any employee —

 shall deduct or withhold employees’ tax from that remuneration; and

 shall pay the amount so deducted or withheld to SARS within seven (7) days after the end of the
month during which the amount was deducted or withheld.

Note: Where the employer ceases to be an employer, the seven day requirement as indicated
above will be from the date the employer ceased to be an employer.

 Section 89sex prescribes that where the seventh (7th) day falls on a Saturday, Sunday or public
holiday, the payment must be made no later than the last business day falling prior to such Saturday
Sunday or public holiday.

 Paragraph 2(2) of the 4th Schedule prescribes that where the employer deducted or withheld an
amount of employees’ tax greater than the required amount from the employee’s remuneration, due to
a written request from the employee, such amount shall be remitted to SARS and the seven day
requirement shall mutatis mutandis apply in respect of such an amount.

 Paragraph 5(1) of the 4th Schedule prescribes that where the employer fails to deduct or withhold the
full amount of employees’ tax as prescribed by the provisions of the 4th Schedule, he / she shall be
personally liable for the payment to SARS of the amount of employees’ tax which he / she fails to
deduct or withhold, and shall pay that amount not later than the date on which the payment should
have been made if the employees’ tax had in fact been deducted or withheld.

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 Note: When an employer makes a payment for PAYE / SDL / UIF after the 20 March 2010, the new
EMP201 and payment reference number must be quoted on the payment.

 Allocation of payments

 Section 89ter(1A) prescribes that where any payment is made by an employer in respect of
employees' tax, such payment will be allocated in the following order:
o in respect of penalty;
o in respect of interest, to the extent to which the payment exceeds the amount of penalty;
and
o in respect of employees' tax or additional penalty, to the extent to which the payment
exceeds the amount of penalty and interest.
 Where there is a shortfall after the allocation of penalties and interest and the outstanding tax
has not been covered in full, interest will continue to accrue on the outstanding tax.

 If the a PAYE has been received from the employer after 20 March 2010, and only the tax
reference number is quoted on the payment, the payment will be allocated to Employer’s
account ,but will be reflected as an unallocated payment, it is the responsibility of the employer
to ensure that the payment is allocated to the correct period.

2.3 PENALTY AND INTEREST

 Paragraph 6(1) of the 4th Schedule prescribes where the employer fails to pay the employees’ tax for
which he / she is liable within the period allowable for payment thereof, such employer shall be liable
to pay a penalty equal to ten per cent (10%) of such amount.

Note: SARS may, having regard to the circumstances, remit the whole or any part of the penalty
imposed. This will be considered upon application by the employer.

 Paragraph 6(2A) of the 4th Schedule prescribes where the employer fails to pay an amount of
employees’ tax with intent to evade his / her or his / her employee’s obligations in terms of the Income
Tax Act, the employer may be liable to pay a penalty not exceeding an amount equal to twice (200%)
the amount of employees’ tax which that employer so failed to pay.

Note: This penalty will be determined by SARS and shall be deemed to be tax for purposes of the
determination of any interest payable. This penalty imposed shall be subject to objection and appeal.

 Section 89bis(2) prescribes that interest shall be payable at the prescribed rate if any amount of
employees' tax is not paid in full within the prescribed period for payment of such amount.

2.4 ESTIMATED ASSESSMENTS

• Paragraph 12 of the 4th Schedule prescribes that SARS may estimate the amount of employees' tax
due by the employer—

 where the employer has failed to furnish an EMP201 monthly return;

 furnished an EMP501 reconciliation but the Commissioner is not satisfied with the submitted
reconciliation;
 where the employer has failed to deduct or withhold the correct amount of employees' tax or
UIF contributions (excluding SDL as the employer is not allowed to deduct it from the
employee); or
 Where the employer has failed to pay over the employees' tax, SDL or UIF contribution due.

 The estimate will be a reasonable estimate of the amount of employees’ tax which is required to be
deducted or withheld by the employer.

 The Commissioner will in case of an estimate, issue a notice of assessment for the unpaid amount to
the employer.

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 Paragraph 13(3) of the 4th Schedule prescribes that any estimate of the amount of employees' tax,
SDL or UIF contributions payable by the employer is subject to objection and appeal.

3 REFERENCES

3.1 LEGISLATION
TYPE OF REFERENCE
Legislation and Rules
administered by SARS:
Other Legislation:
International Instruments:
REFERENCE
Income Tax Act No. 58 of 1962: Sections 1, 89bis(2), 89sex, 89ter; Fourth
Schedule Paragraphs 2, 12, 14 and 30
Skills Development Levies Act No. 9 of 1999: Sections 1 to 6 and 13
Unemployment Insurance Contributions Act No.4 of 2002: Sections 1, 3, 4,
5, 6, 7, 8, 10, 12, 13 and 14
None
None

3.2 CROSS REFERENCES

DOCUMENT # DOCUMENT TITLE APPLICABILITY
AS- EMP-20-G1 Guide:Completion and submission of Monthly EMP 201 All
form

AS-PAYE-05-A1 Allowances Withdrawn

AS-PAYE-05-A2 Fringe benefits Withdrawn
AS-PAYE-05-A3 Rate per kilometre schedule Withdrawn
AS-PAYE-05-A8 Subsistence deemed amount per country Withdrawn
AS-PAYE-05-F1 Personal Service provider All
AS-PAYE-05-F2 Seasonal Workers All
AS-PAYE-05-G1 Guide in respect of Employees’ Tax Deduction Tables All
AS-PAYE-05-G1-A1 Weekly tax deduction tables All
AS-PAYE-05-G1-A2 Fortnightly tax deduction tables All
AS-PAYE-05-G1-A3 Monthly tax deduction tables All
AS-PAYE-05-G1-A4 Annual tax deduction tables All
AS-PAYE-05-G2 Guide for Employers in respect of Fringe Benefits All
AS-PAYE-05-G3 Guide for Employers in respect of Allowances All
AS-PAYE-05-G3-A1 Rate per kilometre schedule All
AS-PAYE-05-G3-A2 Subsistence Allowance in respect of Foreign Travel All
AS-SDL-01 Quick reference guide on SDL All
AS-UIF-01 Quick reference guide on UIF All
FIN-CH-02 SARS payment rules All

4 DEFINITIONS AND ACRONYMS

4th Schedule Fourth Schedule to the Income Tax Act.
Commissioner The Commissioner for the South African Revenue Service
E-mails Electronic mail messages including faxes converted by the process.
Employee  An employee for employees' tax purposes is defines as —

 A natural person who receives remuneration or to whom

remuneration accrues;
 A person (including a company) who receives remuneration or to
whom remuneration accrues by reason of services rendered by
such person to or on behalf of a labour broker;
 A labour broker;
 A person or class or category of persons whom the Minister of
Finance by notice in the Government Gazette declares to be an

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employee;
 A personal service provider;
 A director of a private company.

 An Employee for UIF purposes is defines as any natural person who

receives any remuneration or to whom remuneration accrues in
respect of services rendered or to be rendered by that person but
excluding an independent contractor.

 An employee for taxable benefit purposes is defined as any person

who receives remuneration or to whom remuneration accrues and
includes any director of a company but excludes persons who retired
before 1 March 1992 except for purposes of the provisions which deal
with the payment of an employee’s debt or the release of an employee
from an obligation to pay a debt.
Employees' tax An amount of tax that an employer must deduct from all regular or periodic
payments (remuneration), paid or which becomes payable to an employee.
Employer Any person who pays or is liable to pay a person an amount by way of
remuneration including a person responsible for the payment of an amount by
way of remuneration to a person under the provisions of a law or out of public
funds or out of funds voted by parliament or Provincial Council. This
definition excludes any person not acting as a principle but includes any
person acting in a fiduciary capacity or in his / her capacity as trustee in an
insolvent estate, an executor or an administrator of a benefit fund, pension
fund, pension preservation fund, provident fund, provident preservation fund,
retirement annuity fund or any other fund.
Month A calendar month
Mutatis Mutandis The necessary changes. This means that matters or things are generally the
same, but to be altered, when necessary.
Representative employer Any public officer, liquidator, judicial manager, manager, secretary, officer,
guardian, curator, administrator or other person having authority to pay
remuneration on behalf of an employer.
SARS South African Revenue Service.
SDL Skills Development Levy.

5 DOCUMENT MANAGEMENT
Designation Name / Division
Business Owner: GM Policy and Standards
Policy Owner: GM Policy and Standards
Author: C Kgoedi
Detail of change from previous Changes with regards to faxed and email returns and allocation of
revision: payments
Template number and revision POL-TM-02 - Rev 9

EXTERNAL POLICY: COMPLETION AND SUBMISSION Revision: 2 Page 5 of 5

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