Do you, like most hard-pressed business owners, find your biannual EMP501 reconciliation a daunting and anxiety-inducing ordeal? If so, you’ve come to the right place. At Diga, we know these processes – and the constantly changing regulations and requirements – very well!

Here, we give you some pointers:

Simply put, an EMP501 is the report of all your staff earnings required by SARS before you can issue IRP5 certificates to your staff.

  • You must submit accurate EMP501 reconciliations twice during a financial year:
    1. Interim period – which is for the six month transaction period 1 March to 31 August
    2. Annual period – which is for the full tax year 1 March to 28/29 February.
  • Using the PAYE software system implemented by SARS, you are required to input the tax numbers, addresses and bank details of all your employees.

Take care to submit accurate reconciliations as SARS has imposed high administrative penalties for each incorrect line item.

  • For your submission to be successful, there are three elements that you must reconcile:
    1. Monthly Employer Declarations (EMP201s) that you have already submitted
    2. The payments you have made
    3. Employee Tax Certificates [IRP5/IT3(a)s] you have generated

To be successful, your EMP501 reconciliation must balance across all three of the above elements. If it doesn’t, your submission will be rejected by SARS.

A SARS rejection can create an additional administrative burden for your company. This is all the more reason why it pays to use experts to do this for you, leaving you to focus on what you do best: running your business!

At Diga, we strongly recommend you let us help you with your EMP501 reconciliation. Our specialized team will ensure your reconciliations are up to date and fully compliant.

Should you require any assistance, email us on info@diga.co.za and let us know your specific needs.