South African Revenue Service (SARS)
By Nkosana Khumalo
The South African Revenue Service (SARS) has announced that the deadline for the “Employer Annual Declaration” period is “31 May 2025”. This process, a critical step before the Personal Income Tax (PIT) Filing Season, ensures accurate tax assessments for employees. SARS has also introduced an enhanced “e@syFile™ Employer v8.0” to streamline submissions, urging employers, tax practitioners, and payroll administrators to comply to avoid penalties. Timely and accurate submissions, including “IRP5 and IT3 certificates”, are essential for employees to file their “Income Tax Returns (ITR12)”.
Employer Annual Declaration: A Key Tax Process
SARS emphasized that the “Employer Annual Declaration” is vital for gathering accurate data to issue “auto-assessed or pre-populated Income Tax Returns (ITR12)”. The process integrates information from the “monthly declaration in EMP201” and the “reconciliation in EMP501”. Incomplete or incorrect submissions can hinder employees’ ability to meet their tax obligations, potentially leading to delays or penalties during the PIT Filing Season, which typically begins in July.
SARS stressed the importance of timely distribution of “IRP5 and IT3 certificates”, stating, “Incomplete or incorrect information will make it difficult for employees to fulfil their tax obligations. Timely distribution of IRP5 and IT3 certificates by employers is extremely important as employees require these certificates to file their ITR12s returns during tax season.” These certificates detail employees’ earnings and deductions, enabling accurate tax filings.
Enhanced e@syFile™ Employer v8.0 Launched
To improve the filing experience, SARS has rolled out the “e@syFile™ Employer v8.0”, available for download from the “e@syFile download page on www.sars.gov.za”. The updated version offers “improved capability, ensuring a smoother, more efficient reconciliation process”. SARS encouraged “employers, tax practitioners, and payroll administrators” to adopt the new system to facilitate seamless submissions. The platform simplifies the reconciliation of payroll data, reducing errors and enhancing compliance.
The introduction of this enhanced system aligns with SARS’s ongoing digital transformation efforts. In 2024, SARS reported that 98% of PIT returns were filed electronically, with eFiling and the SARS MobiApp handling over 7 million submissions. The upgraded e@syFile™ is expected to further boost efficiency, particularly for small and medium enterprises (SMEs) managing payroll compliance.
Mandatory Compliance for All Employers
SARS underscored that “all employers are required and must submit their Employers Annual Declaration, including those Employers who are not economically active”. Non-compliance will result in penalties, with SARS holding employers accountable for failing to meet the “31 May 2025” deadline. This includes businesses that have ceased operations or have no employees for the tax year, as they must still submit a nil return to remain compliant.
The revenue service has intensified efforts to enforce compliance, with automated audits and penalties for late or incorrect submissions. In the 2023/2024 tax year, SARS issued over R1.2 billion in administrative penalties for non-compliance, a 15% increase from the previous year, reflecting its zero-tolerance approach.
Supporting Taxpayers and Economic Growth
The Employer Annual Declaration ensures that SARS can provide accurate, pre-populated tax returns, reducing the administrative burden on taxpayers. This process supports SARS’s broader mission to enhance tax compliance while fostering economic growth. The revenue service’s 2025/2026 Strategic Plan emphasizes leveraging technology to simplify tax processes, with initiatives like the e@syFile™ upgrade aimed at improving service delivery.
Recent economic developments, such as the drop in headline consumer price inflation to “2.7% in March 2025” and Eskom’s suspension of loadshedding, have bolstered business confidence, enabling employers to focus on compliance. On X, tax practitioners have praised SARS’s digital tools but called for more support for SMEs navigating complex payroll requirements.
Tips for Employers
SARS advises employers to:
- Download and install “e@syFile™ Employer v8.0” before starting reconciliations.
- Verify employee data, including earnings and deductions, to ensure accuracy.
- Issue “IRP5 and IT3 certificates” promptly to employees.
- Submit declarations by “31 May 2025” to avoid penalties.
- Contact the SARS Contact Centre at 0800 00 7277 or visit www.sars.gov.za for assistance.
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