When the employer pays the employees, she or he must deduct tax from their wages. At the end of every month, the employer pays the tax to the SARS. The employer must:

• Add up all the tax deducted from each employee’s wages and write it on the form called an emp201 form
• Make payment of the tax to sars. Either by electronic payment or by writing out a cheque to sars (keep copies of all cheques or efts made to sars)
• Submit the form EMP201 electronically on SARS E-filing and make an electronic or manual payment.

Electronic payments can be made directly into the SARS banking accounts at First National Bank, Absa Bank, Nedbank or Standard Bank or via the Internet banking facilities. In all instances it is very important that the correct payment reference as indicated on the specific EMP201 Return is provided to ensure that tax payments can be identified and correctly allocated when SARS receives the payment:

• SARS beneficiary account ID; and
• A 19-digit bank payment reference number. This allows the allocation of such payment to a specific tax type and period.

The SARS website, www.sars.gov.za provides details and information relating to bank payment limits and bank payment reference number structuring.

SARS must receive the form and the cheque or electronic payment by the 7th of the next month. For example, the SITE/PAYE for January must reach SARS by 7 February. If it is late, SARS will fine the employer. If the seventh day falls on a weekend or public holiday the Return and payment must be submitted on the last working day before the weekend or public holiday. SARS will send a receipt to the employer which must then be filed.

Manual payment can also be made at most commercial banks.

Income earned below the tax threshold must be declared on a document called an IT3. The reason for not deducting PAYE must be stated. The threshold is adjusted ever year.