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Article by listed accountant Annja Louca

Should I register for PAYE?

Are you a company or employer who employs people and pay them a salary every month?

Do they currently earn more than R6 250 per month (R6137.50 for 2016 tax year)? Update: Here are the 2017 PAYE thresholds (for tax year ending Feb 2018)

If any of the above answers are yes, you are required by law to register for PAYE with SARS.

It is easy to do. And quick to! So don’t stress. Just contact us and we will help you gladly.

Now I am registered for PAYE, what next?

You now need to deduct UIF and PAYE off your employee’s salary. Using the tax tables per SARS’s website, you need to deduct the appropriate PAYE on a monthly basis.

UIF is calculated as 1% for the employer and 1% per employee. This means a total of 2% per employee per month needs to be paid over. The max deduction is R148.72 x employee and employee = R297.44 per month.

Best thing to do is run a payroll and make sure a reputable package calculates the PAYE and generates a payslip for your employee on a monthly basis. This way you know the amount deducted is correct and you know you won’t get into trouble with SARS.

Did you know: You can be held liable for the PAYE not deducted off you employee’s salary? With a 200% penalty! Contact us urgently if you think you need help with this or if you are unsure if your PAYE was calculated correctly.

Useful tip: By using a proper payroll system you know that your IRP5’s generated and EMP501 reconciliations that are due will be correct.  EMP501 is a reconciliation that is required by SARS and should be submitted twice a year. We can also help with this.

What happens if my employees do not earn more than R6250 per month (R6137.50 p.m. for 2016 tax year)?

Then you do not need to be registered with SARS for PAYE. You do, however, need to pay UIF over to the labour department if your employees work more than 24 hours per week. This is done through U-filing.

Useful tip: Rather register for PAYE with SARS and use this cannel to submit the UIF payable. If your staff does go over the threshold, you know you are ready and can submit the necessary submissions.