COMPENSATION FUND: REQUIRES EMPLOYERS TO CONFIRM THEIR REGISTRATION DETAILS

Government Gazette No. 52333 dated 18 March 2025 has been issued in terms of section 6A of the COID Act by the Acting Compensation Commissioner, Farzana Fakir.

While this notice does not appear to have a direct impact on payroll systems, this Newsflash has been issued to assist PAGSA members to inform their clients of this requirement.

The requirements of Government Gazette No. 52333 in terms of section 6A of the COID Act are summarised as follows:

1. The purpose of the notice is a request to employers to provide the Fund with up-to-date details of the company to assist the Fund to “cleanse” and update their employer database.
2. The notice applies to all employers irrespective of the type of entity and is not limited to companies.
3. Employers using consultants or third parties must provide both the employer’s and the consultant’s contact details, plus a signed consultant mandate.
4. Non-submission, incomplete forms, or false information, may result in delays, incorrect assessments, penalties, or legal action.
5. The notice applies to the 2024 Return of Earnings period and for future years.

Note that the terminology used by the Fund to describe a year of assessment is, for some strange reason, the opposite of what we are accustomed to in the tax world.
For the Compensation Fund, “2024” indicates a year of assessment that starts on 1 March 2024, and comes to an end on 28 February 2025.

SARS: TAX DIRECTIVE SOFTWARE TRADE TESTING DATES

SARS has issued a notice on 20 March 2025 with regards to the trade testing of the tax directive software. Trade testing will commence on 24 March 2025 until 7 April 2025.

SARS NOTICE:

The Tax Directives Interface Specification is available here and you are encouraged to review it prior to testing.

Please follow these steps to submit test files:

Step 1: Before testing can commence, you will need to email 10 taxpayer reference numbers to [email protected] to ensure the numbers are active. In the email subject line, use “Tax reference numbers for Trade Testing”. A maximum of 10 taxpayer reference numbers will be allowed.

Step 2: You will be notified via the same email address to confirm when testing may commence.

For trade testing queries please email [email protected]

BASIC CONDITIONS OF EMPLOYMENT ACT: EARNINGS THRESHOLD INCREASE

The Minister of Employment and Labour issued Government Gazette Number 52232 on 7 March 2025 to increase the BCEA Earnings threshold from R254 371.67 pa to R261 748.45 pa with effect from 1 April 2025.

The BCEA Earnings threshold effect from 1 April 2025 is R261 748.45 pa.

Note that the definition of ‘BCEA earnings’ is included in the notice and is only used for the application of this threshold.

The following link can be use to access the Gazette announcing this Earnings Threshold Increase: https://www.gov.za/sites/default/files/gcis_document/202503/52232rg11806gon5970.pdf

DEPARTMENT OF EMPLOYMENT AND LABOUR
Date: 7 March 2025
I,Nomakhosazana Meth, Minister of Employment and Labour, hereby in terms of Section 6(3)of the Basic Conditions of EmploymentAct, No.75of1997, (the Act), determine that all employees earning in excess of R261748,45(Two hundred and sixty-one thousand, and sevenhundred and forty-eight rand, forty-five cents) per annum be excluded from sections 9,10, 11, 12, 14, 15, 16, 17(2) and 18(3) of this Act with effect from 1April 2025. For the purposes of this notice: “Earnings”means the regular annual remuneration before deductions i.e income tax, pension, medical and similar payments but excluding similar payments(contributions) made by the employer in respect of the employee:Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration for the purpose of this notice.

The following is the News flash 2023-05 published by the PAGSA on February 20, 2023 regarding the Compensation Fund: Earning threshold & Submission period

COMPENSATION FUND: EARNINGS THRESHOLD AND ROE SUBMISSION PERIOD

The Director-General of Employment and Labour issued Government Gazette Number 48065 on 17 February 2023 to announce that the period during which employers must submit the annual Return of Earnings for Actual earnings for 2022/2023, and Provisional earnings for 2023/2024, is 1 April 2023 to 31 May 2023. This applies to the 2022 assessment year.

As a result of a request submitted earlier to the Fund, a second Gazette with the same number (48065) and the same date of issue (17 February 2023) specified the two earnings thresholds as follow:

1. R 529 264 for 1 March 2022 to 28 February 2023
2. R 563 520 for 1 March 2023 to 28 February 2024.

I assume that the layout of, and the information required, by the Return of Earnings form is the same as last year (with the exception of the dates and earnings threshold as specified above), but a request to confirm this has been sent to the Fund.

The following is news flash 2024/18 published by the PAGSA on April 04, 2024 regarding COID Annual ROE Submission period

COMPENSATION FUND: RETURN OF EARNINGS SUBMISSION PERIOD

The Compensation Fund has issued the following notice with regards to the annual ROE submission:

2023 RETURN OF EARNING SUBMISSION

THE SUBMISSION OF THE RETURN OF EARNINGS SUBMISSION BY EMPLOYERS FOR THE 2023 ASSESSMENT IS OPEN FROM 1 APRIL 2024-30 JUNE 2024 . This applies to the 2023 year of assessment.

EMPLOYERS ARE ENCOURAGED TO SUBMIT THEIR RETURNS THROUGH THE DEPARTMENT OF EMPLOYMENT AND LABOUR ROE ONLINE SYSTEM PLATFORM ACCESSIBLE AT www.labour.gov.za (click on the Online Services, ROE Online (cfonline.labour.gov.za)

EMPLOYERS ARE ENCOURAGED TO SUBMIT ON THE PRESCRIBED DEADLINE TO AVOID PENALTIES FOR LATE SUBMISSION.

For more information or any enquiry please call Customer Care: 0860105350/0800321322 or
email at: [email protected]/[email protected]

Regards,

Rhona van Taak

COMPENSATION FUND: RETURN OF EARNINGS SUBMISSION PERIOD

The Compensation Fund has issued Gazette No. 52069 with regards to the ROE submission period for the 2024 assessment year. The period for submission for the Return of Earnings (ROE) for COIDA will commence on 1 April 2025 and ends on 30 June 2025.

The Government Gazette can be access via the following link:
https://www.gov.za/sites/default/files/gcis_document/202502/52069gen2991.pdf

To determine the tax bracket for an employee who is paid a bonus in March, the first tax period of the tax year, with no normal taxable earnings, you would need to include this bonus in their remuneration for the tax year. The employee’s tax bracket is determined based on their total taxable income. Here is a step-by-step process:

Include the Bonus in the Remuneration: According to the South African Revenue Service, bonuses are included in the employee’s remuneration in the year they are paid. This means that the bonus paid in March will be included in the employee’s remuneration for that tax year.

Determine the Total Taxable Income: Since there are no other taxable earnings, the total taxable income for the employee would be the amount of the bonus paid.

Apply the Tax Brackets: The tax bracket can then be determined by applying the statutory tax rates for the tax year. This involves looking up the relevant tax brackets for the year and matching the employee’s total taxable income to the corresponding bracket.

For detailed tax brackets, you would usually refer to the tax tables published by SARS for the relevant year.

The current Employment Tax Incentive (ETI) minimum wage requirements are as follows:

– The qualifying employee must be paid a wage that exceeds the applicable wage regulating measure, which could be a collective agreement, a sectoral determination, or a binding bargaining council agreement.
-If none of the above measures are applicable, then the minimum wage is R2,000 per month.
-Additionally, the National Minimum Wage Act introduced in 2018, indicates the minimim wage an employee may be paid. This aligns the ETI requirements with the National Minimum Wage Act

As an eligible employer, you can claim the Employment Tax Incentive (ETI) for a maximum of 24 months per qualifying employee, and these 24 months do not need to be consecutive. Here are the details:

The ETI can be claimed for a total of 24 individual months per qualifying employee.
This 24-month period is determined with reference to the period that a qualifying employee is employed, not necessarily the periods during which the ETI is actually claimed.
If, for example, an employer does not claim the ETI for a qualifying employee in a particular month, that month still counts towards the 24 qualifying months.

A TRIBUTE TO NIEL NEL ON HIS PASSING
It was with a heavy heart and a great sense of loss that I received the news of the passing of Niel Nel early this morning.
Niel started his working career in 1977 at the Port Elizabeth branch of SARS when it was still Inland Revenue, but was
soon head-hunted up to SARS Head Office in Pretoria until his retirement from SARS after 46 years on 31 January 2023.
During those many years of distinguished service, Niel earned a National Diploma in Tax and Financial Accounting and
played a key role in the implementation of the Employees’ Tax (PAYE) system, the codified electronic certificates, the
automation of the PAYE reconciliation system and the subsequent e@syFile and eFiling systems, the Skills Development
and the UIF Contribution processes, and the Employment Tax Incentive.
The PAGSA was founded in 1989, and in the years that followed, my PAGSA activities brought me into contact with Niel
(and incidentally also with Rhona and others at SARS). I remember many interesting discussions between us in those
early years trying to solve the mysteries of applying employment tax laws and their administrative requirements in
payroll systems.
These discussions helped me to understand the SARS perspective on various issues, and in return, I believe they also
helped SARS to understand the practical challenges encountered by payroll suppliers, employers, and employment tax
administrators.
In the late nineties, PAGSA and SARS worked together to design the framework of an electronic tax certificate
submission and reconciliation system during which Niel played an important role.
This collaboration resulted in the 4-digit coded structure that is still in use by SARS today, and that formed the
foundation for the later development of the SARS e@syFile and SARS eFiling systems, as well as a similar design for the
monthly UIF Declarations by payrolls.
Niel continued to provide such valuable assistance to the PAGSA over the years that it prompted my rather cheeky
request to SARS to appoint Niel into a position that I described as “Payroll Champion”. This eventually happened,
although his job title was not the one that I suggested!
Directly after his retirement in January 2023, I invited Niel to join the PAGSA, an offer which he accepted and was then
appointed as a Managing Member of the PAGSA, a position that he held until his untimely passing today.
During the two years that he was with the PAGSA, his contribution was of immense value and will be sorely missed.
Mark Kingon says it well:
Niel is remembered fondly by many at SARS. His role in laying the foundation stones of the current PAYE system is not
often recognised or are understated. Much of where we are with Auto Assessments has as its foundation the work done
by Niel. He had an amazing ability to unravel complex PAYE account issues that no one else could deal with. He knew the
Source Codes like no other. We are sad that he is gone so soon, but remember him with fond memories, a true gentleman.
Our condolences to Zenda and his sons as well as to the broader Payroll family in SA, especially to Rob and the PAGSA.
On a personal note, over the years and during the many discussions about PAYE, UIF, ETI, etc. …and the weather … while
Niel was always professional, we became good friends, and I will miss our conversations.
From the PAGSA, and from me, thank you Niel for your massive contribution to the payroll world. His passing is a big
loss to everyone who had the privilege of knowing him both professionally and personally.
Niel is survived by his wife and two sons, and our thoughts are with them.
Rest in peace.