SARS ETI Verification Audit

The South African Revenue Service (SARS) is currently conducting audits to verify Employment Tax Incentive (ETI) claims made by employers. If your return(s) for the tax period 201908 have been selected for verification, SARS has issued a general letter requesting certain records to be submitted.

To ensure a smooth verification process, employers are advised to review their EMP201 return(s) against their relevant payroll calculations and materials. If any errors are detected, they can be corrected by submitting a revised EMP501 reconciliation via eFiling or e@syFile.

For the tax period(s) under verification, the following relevant material should be submitted if no errors are detected:

1. Payroll or summary report for the period
2. A schedule of the employment tax incentive calculations per employee, including their names, ID numbers, age, number of hours worked for the month, remuneration, and the ETI calculation for the period under verification.
3. If any employees earned below R2000 per month, the employer should provide the bargaining council and industry regulations and agreements that allowed them to remunerate the employee for less than R2000.
4. Proof that the employer is subject to sector determination or bound by a bargaining council agreement which prescribed a lesser minimum salary than R2000.

It is important to note that the payroll data used for submitting employees’ tax certificates already contains most of the above-mentioned information, except for the “wage regulating measures,” if any.

To facilitate the verification process, employers are advised to submit the tax certificate information available on their payroll file. Specifically, the following codes should be provided:

– Code 3030: Surname
– Code 3040: Names
– Code 3060: ID number
– Code 3066: Asylum seeker permit number
– Code 3080: Date of birth
– Code 3190: ETI employment date
– Code 7006: ETI month
– Code 7005: ETI qualifying month cycle
– Code 7009: ETI SEZ code
– Code 7007: ETI hours
– Code 7002: ETI remuneration
– Code 7003: Minimum wage applicable
– Code 7008: Wage paid
– Code 7004: Calculated ETI

The above-mentioned information is sufficient for SARS to perform the verification process.

Please note that although the “age” is specifically requested, it can be determined using the “Date of Birth” information.

If you have any further questions or concerns, please refer to Rhona van Taak, the Admin Manager of the Payroll Authors Group of South Africa (PAGSA).

Please keep in mind that all information provided by PAGSA is subject to their DISCLAIMER.