SARS releases an updated Business Requirements Specification – BRS V21.1
SARS has updated the BRS V21.1 with a new source code for Long Service Cash Awards and amended validation rules for source codes 3231, 3232, 3234, 7004 and the descriptions for source codes 3601, 3605, 3835, 4587, 7002. The latest BRS changes will be implemented on the SARS systems in September 2022 and includes changes required for the interim tax certificate submissions. All SARS stakeholders have been provided with this specification and should have their systems updated in time for the October submission deadline. Access the official SARS BRS V21.1 document here: https://www.sars.gov.za/latest-news/paye-employer-reconciliation-brs-v21-1/

SARS releases a notice to employers in respect of the Employer Annual Declaration for the period 1 March 2022 to 28 February 2023. The Employer filing season has started on 1 April 2023 and closes 31 May 2023. During the above-mentioned period, employers are required to submit their annual reconciliation declaration (EMP501 with the relevant tax certificates [IRP5/IT3(a)] to SARS by using one of the available channels. Employers may use SARS eFiling if an employer has less than 50 employees or alternatively use the Employer e@syFile software version 7.3.1 which was release on 21 November 2022. Access the official SARS notice here: https://www.sars.gov.za/wp-content/uploads/Docs/PAYE/Employer-Annual-Declaration-2023-Stakeholder-Letter-30032023.pdf

UIF Notice: Approved Auditors appointed by UIF for TERS Audit
On 8 December 2022, the UIF Commissioner signed a notice containing a list of auditing firms that have been approved by the Fund and mandated to audit employers for compliance with the TERS benefit requirements. The following are the approved firms that will be contacting selected employers to arrange for information gathering:
1.The Accounting Village (Pty) Ltd;
2.NKS Chartered Accountants;
3.Inqaba Kadiya Consulting (Pty) Ltd;
4.Leolo and Partners Chartered Accountants;
5.Morobi Chartered Accountants;
6.Ndemex Business Solution; and
7.Ligwa Advisory Services. If an employer receives a request from one of these firms, it is legitimate and must be complied with. The full UIF Notice follows on the next page of this Newsflash, and on the page that follows, is an example of the information that employers / payroll systems must make available for the verification. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER. EXTRACT OF THE REQUEST BY THE APPROVED AUDIT FIRMS
We wish to notify you that our firm has been requested by the UIF to conduct a post verification exercise on your firm and would accordingly require access to various documentation to complete this exercise. 5. We accordingly request that we be provided with the following information within three (3) working days following receipt of this letter:
5.1 Bank statements, showing all COVID19TERS funds received to date from the UIF and money paid to employees by the employer;
5.2 Payroll reports (January 2020 to the last month of application);
5.3 Signed Memorandum of Agreement (“MoA”) with the UIF;
5.4 Reconciliation of COVID19TERS funds (total COVID19TERS funds received from the UIF against or a comparison to funds paid to employees);
5.5 A bank confirmation letter submitted to the UIF initially with the claims applications;
5.6 Communication letter/email sent to staff relating to the temporary closure of the business indicating the periods that the UIF claims were applied for;
5.7 Proof of payment of COVID19TERS funds to employees;
5.8 Proof of any refunds made by your firm to UIF; and
5.9 A schedule of forced leave days for employees listed in your
COVID19TERS benefit application/s. 6. We will in due course provide you with a sample list of employees for which we will require the following further information:
6.1 Contracts of employment or appointment letters;
6.2 Payslips from January 2020 to the last month of your benefit application/s;
6.3 Clocking reports or attendance registers pertaining to the lockdown period applied for;
6.4 IRP5’s for 2021 and 2022;
6.5 Salary increase letters, where applicable; and
6.6 Termination letters, where applicable; and
6.7 Any other documentation or records deemed appropriate to fulfilling the post-verification exercise. 7. Our above request is in no manner exhaustive and should further documentation and/or records be required to fulfil the post-verification exercise, we trust that you will provide same. Your assistance in this post-verification exercise is appreciated.

SARS Request for Information – API Technology for Tax Certificate Submissions
Refer to PAGSA NF 2023-17 ‘Monthly Tax Certificates – Heads-up’ for background to the SARS intention to modernise the technical capability of their systems. As far as payrolls and employers are concerned, this will result in the requirement to submit monthly tax certificates to SARS as opposed to the current bi-annual submission requirement. On 22 May 2023 SARS issued a RFI (Request for Information) asking for feedback from PAGSA payroll supplier members on their ability and their appetite to introduce API (Application Program Interface) technology into their payroll systems as an alternative method of submitting tax certificates to SARS in the future. The introduction to the SARS RFI reads as follows:
SARS requested a response from the PAGSA by 5 June 2023. Unfortunately the questions in the RFI were focused on both payroll suppliers and on your clients (employers). Within the time frame, it was impossible for payroll members to request information from their clients that would no doubt require technical explanation, to analise the response and send the consolidated feedback to the PAGSA for on-sending to SARS. A further complication was that the numbers of your clients was requested, which is confidential information. After some discussions between the PAGSA and SARS, it was agreed to reduce the scope of the survey to include only the PAGSA payroll supplier members, and to limit the questions to the following:
1.As a payroll supplier member, if an API channel was made available, would your company make the necessary changes to your payroll system(s) to allow your clients to make use of the new submission channel option? Please answer ‘Yes’ or ‘No’ and add a short comment if you want to. 2.If your payroll system(s) made the API submission channel available in the future, estimate as best possible the percentage of your client base that you anticipate would make use of the new submission channel. Can I ask that on behalf of your company, you URGENTLY submit your response to the above two questions by email directly to [email protected] for Rhona’s attention by no later than close of business Wednesday 7 June 2023. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

2022 Budget Review Date
The PARLIAMENTARY PROGRAMME FRAMEWORK FOR 2022 that specifies the dates of important Parliamentary events has not yet been published, no doubt because of the fire that forced the Parliament’s buildings to be closed down. However, it seems certain that the ‘last Wednesday of February’ principle will be followed, and the 2022 Budget Review will be presented on Wednesday 23 February 2022. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

Overview of the ETI Monthly Remuneration Change – Effective 1 March 2022
PAGSA Newsflash 2022-03 discussed the general changes made by the 2021 tax amendment Acts that were published on 19 January 2022 and indicated that there were two amendments that are more complicated and that the PAGSA has been following up to get clarity. We have today been given an opinion by SARS regarding the change to the definition of monthly remuneration in the Employment Tax Incentive Act that is effective from 1 March 2022. Due to the urgency to get this to payroll suppliers, this Newsflash gives you the proverbial bottom line, and the background detail will be discussed in a Newsflash to follow. Amendment
The definition of remuneration in the ETI Act has been amended by the insertion of the proviso. “monthly remuneration’—
(a) where an employer employs and pays remuneration to a qualifying employee for at least 160 hours in a month, means the amount paid or payable to the qualifying employee by the employer in respect of a month; or;
(b) where the employer employs a qualifying employee and pays remuneration to that employee for less than 160 hours in a month, means an amount calculated in terms of section 7(5):
Provided that in determining the remuneration paid or payable, an amount other than a cash payment that is due and payable to the employee after having accounted for deductions in terms of section 34(1)(b) of the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997), must be disregarded;”
Application
Non-cash payments to employees are employer-paid contributions to third party organisations, as well as all taxable fringe benefits in terms of the Seventh Schedule of the Income Tax Act. These non-cash payments must be excluded from the calculation of ETI monthly remuneration from 1 March 2022. More Detail
There are some aspects of the broad guidance outlined above for the calculation of ETI monthly remuneration that is with SARS Legal for their opinion. As soon as feedback is received, another Newsflash will be issued. Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.

Public holiday: :27 December 2022
The President has declared Tuesday, 27 December 2022 as a public holiday in lieu of Christmas day falling on a Sunday. The press statement with regards to this event can be found by using the following link:
https://www.thepresidency.gov.za/press-statements/president-declares-27-december-public-holiday#:~:text=South%20Africans%20will%20enjoy%20Tuesday,Act%20No%2036%20of%201994). Regards,
Rhona van Taak
Admin Manager Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

Amendment Acts: Changes that Affect Payrolls
The 2022 Budget proposals were followed by the issue of draft Amendment Bills and the further steps of the legislation amendment cycle during 2022, culminating in the issue on 5 January 2023 of the following Amendment Acts:
1.Taxation Laws Amendment Act [TLAA]
This Act deals with the substantive changes to the Income Tax Act proposed in the 2022 budget. 2.Tax Administration Laws Amendment Act [TALAA]
This Act deals with the administration-related changes proposed in the 2022 budget to the various Acts that fall under SARS. 3.Rates and Monetary Amounts and Amendment of Revenue Laws Act [Rates Act]
This Act confirms the tax tables, rebates and threshold changes proposed in the 2022 Budget. 4.Draft Revenue Laws Amendment Bill [Revenue Bill]
This Bill introduced the ‘Two-pot’ retirement system reforms. Changes that Affect Payrolls
There were very few changes to the legislation that have an impact on payrolls, the least that I can remember in decades, and with one exception of an earlier date for the ETI Understatement Penalty, they are all effective from 1 March 2023. There are several changes that affect retirement funds and the members of these funds, but except for one, these changes are outside of payroll administration and are not discussed here. The following amendments do have an impact on employers and payroll suppliers. ETI Understatement Penalty
Budget 2022 Proposal
In view of the abuse of the Employment Tax Incentive (ETI) that has been encountered it is proposed that the Employment Tax Incentive Act be amended in order to facilitate the imposition of understatement penalties on ETI reimbursements improperly claimed. This is achieved by classifying ETI reimbursements as refunds for purposes of the Tax Administration Act and specifically as refunds of tax for purposes of the understatement penalty provisions. The Changes to the Legislation
Section 221 of the Tax Administration Act is hereby amended by the substitution for the definition of ‘tax’ of the following definition:
“‘tax’ means a tax as defined in section 1, excluding a penalty and interest, and will for purposes of this Part include an employment tax incentive as contemplated in section 2(1) of the Employment Tax Incentive Act, 2013 (Act No. 26 of 2013);”. Effective date:
This proposed amendment will come into operation on 1 September 2022. Note that in the draft amendment Bill issued in July 2022 this change was proposed to come into effect on 1 September 2022, long before the amendment was promulgated on 5 January 2023. The reason behind making the effective date retrospectively effective was no doubt to align the penalty on ETI reimbursements that are incorrectly claimed with the start of the second 6-monthly tax certificate submission cycle of September to February. From memory, draft legislation can be implemented prior to promulgation as long as it is a matter of urgency, the amendment is clear, understandable, and properly communicated and explained. Also from memory, this same situation arose in April 2020 with the Covid-19 draft Disaster Management Tax Relief Bill that introduced retrospective changes back to 1 April 2020 for the enhanced ETI requirements that were introduced under huge pressure and as a matter of extreme urgency. Following comments from concerned parties, SARS agreed to clarify how the penalty will be determined to explain the interaction between section 4(2) of the ETI Act and the USP (understatement penalty) to ensure that there is not a duplication of penalties. Section 7B Variable Remuneration
This is a relatively minor change to section 7B, but section 7B is starting to make its presence felt in other areas of payroll administration, so you would be well-advised to become familiar with its requirements. To assist you, this Newsflash goes into detail to explain the concept of ‘variable remuneration’, the changes introduced by the amending legislation, as well as aspects of the application of ‘variable and ‘non-variable remuneration’ both now and in the future.

e@syFile BETA Testing (1st phase)
SARS has issued a notice with regards to the testing of the updated e@syFile software (BETA version) application before its release to the general market in September 2022. All online functionality has been disabled in order to prevent inadvertent submission of test data into SARS production environment, therefore, certain menu options have been disabled and the test application will default to offline mode as a fail-safe. Testing should commence tomorrow 16 August 2022 and be concluded on 15 September 2022 after which the testing window will close. The link: The BETA test version was released and the build can be downloaded from the following link:
https://secure.offline.sarsefiling.co.za/PAGDownloadSite/BetaHome.xhtml
Please note that this link is confidential and only available to PAGSA full members for testing purposes. In order to protect its confidential status, SARS request that you do not share this link. The BRS: The PAYE BRS for the Employer Interim Reconciliation submission period 202108 is available on the SARS website: PAYE BRS V21.1
Username & Password: The username and password will be sent to you when an SMS with your company name is received on (072) 680 8337. Error reporting: Email the following details of the error to [email protected]
1.Make your description of the problem as short as possible, but good enough for SARS to understand the problem. 2.Add screen prints where necessary of the error to the email. 3.Add the CSV file where the error relates to the information supplied in a CSV file. Regards,
Rhona van Taak
Admin manager: Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER

SARS Notice: Modernisation of the e@syFile Employer AA88 System
SARS are presenting a webinar on the changes to modernise their e@syFile Employer AA88 system. The details are in the notice below. Dear Valued Stakeholders
In pursuit of SARS’ vision and strategic objectives we are continuously modernising our systems to provide digital and streamlined online services necessitating that regular upgrades, enhancements, and maintenance are done on our digital platforms and technology infrastructure. One of the enhancements that are due to be rolled out to all employers in due course relates to the e@syFile Employer AA88 system. As one of our key role-players SARS would like to engage you, to provide an overview of the various issues that were identified and fixed while also including various other enhancements made during this process. We do not believe the enhancements will have a system development impact; however, these changes will have a significant impact for all employers from a data perspective in relation to AA88’s. You are therefore kindly requested to please avail yourself for the meeting and / or ensure that one of your more technically inclined staff members responsible for actioning the AA88’s in your organisation, also attend the interactive session that will be scheduled for Thursday, 20 April 2023, at 9:00 – 10:00. Please be on the lookout for the invitation that will block your diary and contain the virtual meeting link for the proposed meeting. Business Associations and organisations should kindly share this widely with their members and relevant person/(s) in their respective organisations. As promised, the meeting invitation is below. Microsoft Teams meeting
Join on your computer, mobile app or room device
Click here to join the meeting
Meeting ID: 397 032 625 291
Passcode: TmUKyS
Download Teams | Join on the web
Regards,
Rob Cooper
Chairman Payroll Authors Group of South Africa
All information provided by the PAGSA is subject to our DISCLAIMER.