SOURCE CODE DESCRIPTIONS IRP5 code 4586

Deduction codes

In the electronic file IRP5 code 4586 is used for: Employer’s provident fund contributions paid for the benefit of an employee or former employee who has retired from the fund and qualifies for the “no value” provisions in the 7th Schedule [par 12D(6)]
This is the employer’s portion of the provident fund contribution:
· for the benefit of a member of the fund who has retired from the fund, or
· i.r.o. the dependants or nominees of a deceased member of the fund.
This code is valid from the 2017 year of assessment.

The prescribed Length of IRP5 code 4586 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4586 – Validation Rules

The Validation Rules for IRP5 code 4586 in the electronic file are:
• Conditional. All deductions and contributions that have a value must be reported, and those that do not have a value must not be reported
• A maximum of 12 deduction codes must be used. If there are more than 12 codes to be output, they must be combined in accordance with the rules defined
• If the certificate type is ITREG this field must not be completed.
• Cents must be omitted (decimal amount is invalid)
• No negative amounts are allowed
• If code 4586 is greater than zero and code 4473 is equal to zero, then codes 3825/3875 and 4003 must be zero
• Codes 4585 and 4586 are only valid from 2017 year of assessment

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4587

Deduction codes

In the electronic file IRP5 code 4587 is used for: Section 10(1)(o)(ii) exemption considered by the employer for PAYE purposes
Basic Principles:
1 The exemption remains an assessment determination by SARS (i.e. when the completed ITR12 return is submitted by the employee to, and processed by, SARS).
2 Employers are therefore required to declare the foreign service remuneration as per the SARS Business Requirements Specification: PAYE Employer Reconciliation or notices issued to employers in this regard. SARS will determine whether the exemption is allowable when processing the ITR12 return submitted to SARS by the employee based on the information provided in the ITR12 return together with the IRP5/IT3(a) certificate information submitted by the employer.
3 The possibility that the employee may qualify for the exemption does not automatically waive the obligation of an employer to deduct and pay PAYE. Where an employer is satisfied that the exemption will apply, the employer may choose not to deduct and pay PAYE. However, where the exemption is not allowed when the ITR12 of the employee is processed, the employer will be liable for the PAYE not deducted as well as the concomitant penalties and interest.
4 The following foreign service income source codes are included in the remuneration which qualifies for the s10(1)(o)(ii) exemption and which employers may consider for calculating PAYE, if all requirements are met:
· Income Source codes – 3651, 3655, 3656, 3657, 3672
· Allowance codes – 3751(the full amount must be included), 3763, 3767, 3768, 3772
· Fringe Benefit codes – 3851, 3852 (the full amount must be included), 3855, 3856, 3858, 3859, 3860, 3863, 3866 (the full amount must be included), 3867, 3870, 3875, 3878, 3879, 3881, 3883, 3885.

The prescribed Length of IRP5 code 4587 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4587 – Validation Rules

The Validation Rules for IRP5 code 4587 in the electronic file are:
• Conditional. All deductions and contributions that have a value must be reported, and those that do not have a value must not be reported
• A maximum of 12 deduction codes must be used. If there are more than 12 codes to be output, they must be combined in accordance with the rules defined
• If the certificate type is ITREG this field must not be completed.
• Cents must be omitted (decimal amount is invalid)
• No negative amounts are allowed
• Code 4587 is only valid from 2021 year of assessment
• If no foreign service income codes are completed, then code 4587 MUST NOT be completed
• If any of the foreign service income codes allowable for the s10(1)(o)(ii) exemption (listed under 4587 in par 6.6) is completed, then code 4587 MUST be completed
• The value of code 4587 may be zero
• The value of source code 4587 cannot exceed the lower of R1.25 mil or the total of the values declared under the s10(1)(o)(ii) allowable foreign service income codes

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4497

Deduction codes

In the electronic file IRP5 code 4497 is used for: Total Deductions/Contributions.

The prescribed Length of IRP5 code 4497 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4497 – Validation Rules

The Validation Rules for IRP5 code 4497 in the electronic file are:
• Conditional:
o If any value (whether zero or greater than zero) is completed next to a deduction/contribution/information code, then this
field is mandatory
o If no value is completed next to a
deduction/contribution/information code, then this field must not be completed
• Cents must be omitted (decimal amount is invalid)
• No negative amounts are allowed
• If the certificate type is ITREG this field must not be completed.

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4101

Employees’ tax deduction, Employment Tax Incentives and Reason codes

In the electronic file IRP5 code 4101 is used for: SITE (Standard Income Tax on Employees). Not applicable from 2014 year of assessment.

The prescribed Length of IRP5 code 4101 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4101 – Validation Rules

The Validation Rules for IRP5 code 4101 in the electronic file are:
• Conditional. Either 4101 and/or 4102 and/or 4115 must be completed otherwise 4150 must be completed (invalid if Type of Certificate is IT3(a))
• Must only be used if certificate type (3015) is IRP5
• Decimal digits are mandatory even if the decimal value is zero
• Must be decimal point (comma invalid)
• Must not be completed if Type of Certificate is IT3(a), ITREG.
• Must not be completed from 2014 year of assessment

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4102

Employees’ tax deduction, Employment Tax Incentives and Reason codes

In the electronic file IRP5 code 4102 is used for: PAYE (Pay-As-You-Earn).

The prescribed Length of IRP5 code 4102 in the electronic file is: N15

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax

SOURCE CODE DESCRIPTIONS IRP5 code 4102 – Validation Rules

The Validation Rules for IRP5 code 4102 in the electronic file are:
• Conditional. Either 4101 and/or 4102 and/or 4115 must be completed otherwise 4150 must be completed
• Must only be used if certificate type (3015) is IRP5 [invalid if Type of Certificate is IT3(a)]
• Decimal digits are mandatory even if the decimal value is zero
• If YoA (source code 3025) is greater or equal to 2021 and Voluntary Over-deduction Indicator (code 3195) is “Y” then PAYE (source code 4102) must be less or equal to the sum of Non-taxable income (source code 3696) and Gross Employment Income (taxable) [source code 3699]
• If YoA (source code 3025) is greater or equal to 2021 and Voluntary Over-deduction Indicator (code 3195) is “N” then PAYE (source code 4102) must be less or equal to Gross Employment Income (taxable) [source code 3699]
• Must be decimal point (comma invalid)
• Must not be completed if Type of Certificate is IT3(a), ITREG.

All income and deduction components (e.g. salary, commission, allowances, benefits, medical contributions, employer information, etc.) must be reported against the applicable code as prescribed in the GUIDE FOR CODES APPLICABLE TO EMPLOYEES’ TAX CERTIFICATES PAYE-AE-06-G4.

The abbreviations used within the description of the relevant codes mean:
• PAYE: Income is subject to the deduction of Employees’ Tax and will also be taxed when the income tax assessment for the employee is processed.
• IT: Income is not subject to the deduction of Employees’ Tax but will also be taxed when the income tax assessment for the employee is processed.
• Excl: Income is not subject to the deduction of Employees’ Tax and will also not be taxed when the Income Tax assessment for the employee is processed.
• Excl/PAYE: Depending on the circumstances described in the legislation, the income is either subject to both PAYE and Income Tax, or it is excluded from both PAYE and Income Tax