The following is knowledge that has been shared from Rhona van Taak on previous EMP501 Reconciliations queries

RECONCILIATIONS

IRP5 cancel or removal from EMP501 reconciliation
In order to remove the IRP5 from the reconciliation, you need to
• cancel the specific IRP5 (which will remove the IRP5 from the totals of the IRP5; AND
• adjust the (PAYE, UIF and SDL) liabilities on the EMP501 for each month to reduce it with the amounts relating to the specific IRP5

When this cancellation and adjusted EMP501 is then submitted to SARS, SARS will adjust the employer account accordingly (the new liabilities on the EMP501). This will result in a credit in the specific months (if the amounts were paid over by SARS).
The credit will result in an unallocated payment which can be utilised in future months.

Process: SARS processing the EMP501
The PAYE reconciliation is a final declaration in terms of the PAYE, SDL and UIF liabilities of the employer.

The declaration part of the EMP501, indicates that the employer submitting the EMP501 accepts liability for any differences between the monthly EMP201 submitted and this EMP501 reconciliation.

During the processing of the EMP501 submitted by the employer, SARS will compare the PAYE, SDL and UIF liabilities declared on the EMP501 to the SARS employer account liabilities. If it is found to be different a reconciliation assessment will be raised on the employer account to match the final liabilities declared.

In cases where the employer has not submitted an EMP201 monthly return for any period, SARS will create a EMP201 return with a liability declared on the EMP501. This return will be created as a “Recon declaration” in the statement of account.

This means that although the employer has not submitted a EMP201 monthly return, the EMP501 return will correct the situation. Furthermore, if the employer has not made any payments in terms of these liabilities, the employer account will be part of the normal collection process in SARS.

As soon as an EMP501 reconciliation was submitted to SARS, the SARS system locks the EMP201 returns and no revise EMP201’s can be requested to correct any liability amounts declared on these EMP201’s.

In order to correct the liability amounts for PAYE, UIF and SDL in relation to a period for which an EMP501 reconciliation return was submitted, the employer must submit a revised EMP501 reconciliation return with the corrected liabilities as well as the IRP5 tax certificates.

In cases where the PAYE Statement of account reflects unallocated payments, the user may request the SARS processing centre to allocated these payments against the debits on the account.

You need to send an Email or fax one of SARS centres (depending on the area in which the business is located).