If there is a tax calculation difference between what was calculated in the payroll and what is being assessed by the South African Revenue Service (SARS), it is important to investigate the reasons for the variance and take appropriate steps to address the issue. Here are some steps you can take to resolve a tax calculation difference:
1. **Review the Calculations:** Begin by carefully reviewing the tax calculations that were done in the payroll system and compare them with the assessment from SARS. Look for any discrepancies or errors in the calculations that could explain the difference.
2. **Check for Data Accuracy:** Verify that all the data used in the tax calculations, such as income amounts, deductions, allowances, and tax rates, are accurate and up to date. Even small errors in data entry can lead to significant differences in tax calculations.
3. **Consult Tax Professionals:** If you are unable to identify the cause of the tax calculation difference on your own, consider seeking assistance from tax professionals or consultants who have expertise in tax matters. They can help you review the calculations and provide guidance on how to rectify any errors.
4. **Communicate with SARS:** If you believe there is an error in the assessment from SARS, you can communicate with them to seek clarification and resolve the issue. Provide them with any relevant information or documentation that supports your calculations.
5. **Make Corrections:** If errors are identified in the initial tax calculations, make the necessary corrections in the payroll system and ensure that future calculations are done accurately to avoid similar discrepancies in the future.
6. **Keep Records:** Maintain detailed records of the tax calculations, assessments, and any correspondence with SARS

Under-Deduction
Where there is an under-deduction of employee’s tax from an employee’s remuneration:
• Pay the shortfall (employees’ tax, UIF and/or SDL) amount to SARS. Penalties and interest may be payable;
• Recover the shortfall (employees’ tax only) from the employee;
• Issue an amended IRP5/IT3(a) certificate for the transaction year in which the under-deduction occurred to the employee, once the employees’ tax shortfall has been recovered;
• Submit the amended IRP5/IT3(a) certificate to SARS showing the correct withholding. The employer may only submit such amended certificate once all the employees’ tax has been recovered from the employee; and
• Determine the reason for the under-deduction. If it is as a result of a calculation error or incorrect setting in the payroll system, the necessary changes must be made to avoid such incorrect deductions in future.
Where the employee’s ITR12 return has already been assessed, the employee must resubmit the ITR12 through the Request for Correction (RFC) process or, if the ITR12 was audited, the employee must lodge an objection.
Where the employer cannot recover the under-deduction of employees’ tax from the effected employee, such amount will be deemed to be a penalty payable by the employer only. The relevant tax amount MUST NOT be reflected on any certificate. PAYE MUST be declared in the “Tax Paid on Behalf of Employee” field on the EMP501. SDL and UIF MUST be declared in the “Audit Result not in Certificates” field on the EMP501.
Over-Deduction

Where there is an over-deduction of employment tax from an employee’s remuneration:
• Determine if the over-deduction is per request of the employee and ensure that the field “Voluntary Over Deduction” on the certificate is updated to “Yes”. Please note that the employee must submit a request for over-deduction to the employer in writing;
• For PAYE, do NOT correct the over-deduction of PAYE, regardless of the reason for over-deduction;
• For SDL and UIF, amend the certificate where it was overstated, and resubmit the certificate to SARS. The amendments must be submitted for the transaction year for which the overstatement occurred.
• Inform the employee to submit an ITR12 to claim a refund; and
• Determine the reason for the over-deduction. Where the over-deduction is as a result of a calculation error or incorrect setting in the payroll system, the necessary changes must be made to avoid such incorrect deductions in future.
How to Amend Certificates
• Where there are no changes required for the type of certificate [IRP5 or IT3(a)] or the transaction year or the year of assessment, the certificate must be amended (same certificate number).
• Where either the type of certificate [IRP5 or IT3(a)] or the transaction year or the year of assessment must be amended, the original certificate issued must be cancelled and replaced with a new certificate (new certificate number).
Examples which can result in an over- or under-deduction
• Unpaid extended sick leave
• Retrenchment
• Resignation
• Retirement
(Ref. https://www.sars.gov.za/types-of-tax/pay-as-you-earn/employment-taxes-validation-etv/)