The pressure is on for payroll departments at tax year-end
- Marty Santana.
With the tax year end upon us, payroll departments are gearing up for what is often an incredibly stressful time. The payroll administrator needs to consider a number of questions when gathering the requisite information for SARS. For example, was an audit undertaken on the current year’s payroll to see if it is in line with the contract of employment? Does the administered payroll correctly take account of the fringe benefits proposed in the contract of employment? Have any of the loans made to employees during the year been subject to interest and shown as a fringe benefit? These are just some of the many questions that payroll administrators must be able to answer.
It is best practice for payroll administrators to ensure that any changes as mentioned above are considered in the last month of the payroll, to ensure that the correct PAYE is paid to SARS on or before 7 March 2022. If not done at this time, errors may only be found when the PAYE reconciliations are prepared between April and May. This would result in penalties and interest being levied if the correct PAYE was not paid on time.
For large corporations, it is important to reconcile the payroll data to the information shown on the financial statement, as this will be a requirement in terms of the IT14SD. However, SARS typically requests these returns well after the budget year end, and by that time it will be too late to rectify any discrepancies that may be discovered.
Apart from the stress of tax year end, the potential financial consequences from an inadequately prepared payroll administrator can be burdensome and unnecessary. At Arro, we believe that it is never too late for payroll administrators and their companies to equip themselves with the right knowledge – even if this means being prepared for the consequences that may arise due to inadequate preparation. If you or your payroll administrator could benefit from assistance during the stressful tax year end, we encourage you to contact the Arro Collective to guide you through the process. Remember that forearmed is forewarned. Contact us today at marketing@arro.co.za
Published: 14 February 2022