SARS PAYE BUSINESS REQUIREMENTS SPECIFICATION VERSION 24.0.0
Background:
The SARS PAYE Business Requirements Specification (BRS) is a collaboration between the Payroll Authors Group of South Africa (the PAGSA) and SARS (the owner of the document), to specify the requirements for the creation of tax certificates (IRP5’s and IT3a’s) by payroll suppliers and employers.
The PAYE BRS specifies the details of all employer and employee data fields as well as the validation rules for every data field, in order to align the tax certificate data that is created by payroll systems with the tax certificate data expected by the SARS tax certificate systems (e@syFile, eFiling and the SARS online system used in the SARS branch offices).
SARS BRS Version Principle:
SARS normally issue a major release of the PAYE BRS at the start of each new tax year, indicated by an increase to the first two digits of the 6-digit BRS version number.
If necessary, minor releases are issued during the tax year to introduce new tax certificate codes, or to change the specification of the employer and employee data fields, or the validation rules for the data fields, to bring them up to date with any legal or administrative requirements that change during the tax year.
SARS PAYE BRS VERSION 24.0.0:
Version 24.0.0 of the SARS PAYE BRS was issued on 18 March 2025 and specifies the requirements for the creation of tax certificate files for the interim (mid-year) submission, as well as for the annual (tax year-end) submission for the 2025/2026 year of assessment.
Unless replaced by an updated version (e.g. the recent issue of PAYE BRS version 24.0.2 discussed below), the requirements specified in BRS version 24.0.0 are operational from 1 March 2025 until 28 February 2026 for payroll suppliers and will be implemented in the SARS tax certificate systems for the September 2025 Interim submissions.
The following changes to tax certificate data fields and validation rules have been implemented in Version 24.0.0:
New Source Codes:
Code 3623/3673 – ‘Antedated salary/pension’ extending over previous years of assessment (PAYE)
• Instead of code 3907/3957, code 3623/3673 must now be used to report:
o employees’ tax (taxable) accrued in previous year/s due to a settlement agreement or arbitration award or court-order that relates to previous years
o awards granted via settlements out of court and Labour Court disputes.
• The employer must apply for a tax directive to determine the amount of employees’ tax to be deducted
• If codes 3623/3673 are completed, then the Directive number is mandatory and MUST NOT be zeros.
Note:
The effective year of assessment for changing from code 3907 to code 3623 for antedated salaries and pensions has been updated from 2026 (in BRS version 24.0.0) to 2025 (in BRS version 24.0.2).
This retrospective change could unfortunately make life difficult for payroll suppliers and for employers who have not been given enough notice in advance to make the changes to their payroll systems.
The implications are explained in more detail in a section headed “Effective Year of Assessment Change for Codes 3623 and 3907” at the end of this newsflash.
Note further:
The following three codes (4042, 4588, and 4589) have been added to the PAYE BRS from 1 March 2025 in terms of the amended section 11(nA), section 11(nB), and the new Fourth Schedule paragraph 2(4)(g).
The application of these new refund deduction requirements is not an easy matter and will be discussed in detail in a PAGSA Newsflash that will be issued as soon as we receive final clarity from SARS on some issues.
For the purposes of this Newsflash, the three new codes are simply listed below as issued without explanations.
Code 4042 –Deduction amount in terms of section 11(nA) and Fourth Schedule 2(4)(g):
Reported under code 4042 are amounts deducted from PAYE in the current year of assessment in terms of section 11(nA) and Fourth Schedule paragraph 2(4)(g) in respect of remuneration amounts paid to an employee in the current or a previous year of assessment that were refunded by the employee to the employer in the current year of assessment, i.e. recoupment of overpaid remuneration / clawback of commission received by the employee for his or her own benefit, excluding administration errors.
Note:
• The underlined wording in the above description of code 4042 is incorrect and has been corrected in BRS version 24.0.2. (“Amounts deducted for the purposes of calculating PAYE”)
• The original remuneration amount paid to the employee by the employer in either the current or an earlier tax year, for the benefit of the employee, which has accrued, must be declared under the relevant income code.
• Code 4042 can only be used for s11(nA) deduction and will be used in the ETV calc
• Code 4042 is only valid from the 2026 year of assessment
• If code 4042 is greater than zero, then code 4588 MUST be completed.
Code 4588 – The total amount repaid by the employee in the tax year for a s11(nA) recoupment:
Note:
• This amount will be used by SARS in the ITR12 assessment process
• The inclusion of this code on the IRP5/IT3(a) certificate replaces the ‘Repayment confirmation letter’ that the employer issued to the employee in the past.
• Code 4588 is only valid from the 2026 year of assessment
• If code 4042 is greater than zero, then code 4588 MUST be completed
Code 4589 – The total amount repaid by the employee in the tax year for a s11(nB) recoupment i.e. a restraint of trade:
Note:
• This amount will be used by SARS in the ITR12 assessment process
• Code 4589 is only valid from the 2026 year of assessment
Amended Source Codes:
Code 3020 –Nature of Person:
The scope of Code 3020 = ’N’ has been extended to provide for an individual in receipt of a savings withdrawal benefit, as follows:
• ‘N’ = Retirement Fund Lump Sum Recipient or Pensioner or Savings Withdrawal Benefit Recipient.
Code 3907/3957 – Other Lump Sums [PAYE]:
• Code 3907 was used to report ‘Antedated salary/pension’ amounts for years of assessment up to 2026.
• From the 2026 year of assessment, these amounts must be reflected under source code 3623/3673.
Note that the year of assessment in which the change from code 3907 to code 3263 becomes effective is now 2025 (and not 2026). This is explained in the section at the end of this Newsflash headed “Effective Year of Assessment for Codes 3623 and 3907”.
Amended Source Code Validations:
Code 3230 –Directive Number:
The Directive number is mandatory and MUST NOT be zero if code 3623/3673 is reported on a tax certificate.
Code 3232 -Directive Income Source code:
The list of valid source codes that require a directive has been extended to include code 3623/3673.
SARS PAYE BRS VERSION 24.0.2:
SARS issued PAYE BRS version 24.0.2 in July 2025 to implement the retrospective change to the effective year of assessment for code 3623/3673.
A detailed description, and the rationale behind this change, follows in the section that follows:
EFFECTIVE YEAR OF ASSESSMENT FOR CODES 3623 AND 3907:
Due to a late decision by the policy makers, the year of assessment that the change from applying code 3907/57 to that of applying code 3623/3673 for ‘antedated salaries/pensions’ is effective from, has been changed retrospectively from 2026 (in BRS version 24.0.0) to 2025 (in BRS version 24.0.2).
This retrospective change could unfortunately make life difficult for payroll suppliers and for employers during the changeover period.
Aspects of the administration in payrolls to accommodate the change to the effective year of assessment follow:
1. SARS have clarified that the backdating of the source code on the IRP5 will only be implemented in September 2025 in the SARS systems. Thismeans that if employers submitted antedated salary payments under code 3907 in the 2025/02 reconciliations, they don’t need to resubmit them.
2. Code 3623 requires a directive from SARS, and the application of the change to the year of assessment will be specified on the directive itself. In other words, the code on the directive that is issued for an antedated salary/pension will determine which source code must be used on the IRP5 certificate, regardless of the year of assessment that the employer is submitting.
3. Directives that were issued before April 2025 will reflect source code 3907, and directives issued from April 2025, will reflect source code 3623.
I trust that this clarifies the requirements and will be of assistance to you.
