What the new Employment Tax Incentive limits mean for your business

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2021 RETURN OF EARNINGS DECLARATION

The Department of Labour and/or Rand Mutual Assurance (RMA), in accordance with the Compensation for Occupational Injuries and Diseases Act (COIDA) requires employers to submit a declaration by either 31 March 2022 (RMA), or 31 May 2022 (Department of Labour extended deadline date as in preceding years) which declares the number of employees (including directors) and their annual earnings, per month, for the period 1 March 2021 – 28 February 2022.

A percentage is determined, depending on the industry applicable to the employer, which is used to determine the fee payable to the Compensation Fund (CF).

If the declaration and payment is not made by 31 May 2022, a penalty not exceeding 10% of the assessment will be charged.

2021 EMPLOYER ANNUAL RECONCILIATION

Employers are required to submit their Pay-As-You-Earn Employer Annual Reconciliation (EMP501) from mid-April to 31 May 2022 and involves a reconciliation between the monthly EMP201 declarations submitted to SARS, monthly payments made to SARS and income tax certificates (IRP5) for the 2021/2022 tax year. Employers are also required to supply employees with a copy of their income tax certificates (IRP5).

It is of utmost importance to ensure that each employee’s personal details are up to date and accurate, as the information will reflect on the employee’s 2022 income tax certificate (IRP5).

SARS has developed a free software programme to assist employers with the reconciliation and submission process and is available for download on their website (www.sars.gov.za).

To avoid any penalties or interest charged, ensure that your reconciliation is submitted by 31 May 2022.

In due course, SDK Cloud Accounting will be contacting our payroll clients to request up to date information to ensure the accuracy of submissions.

April 2022 NEWSLETTER

What The New Employment Tax Incentive Limits Mean for Your Business

A substantial increase in the limits for the Employment Tax Incentive (ETI) - a tax concession encouraging employers to hire more young people – was announced during Finance Minister Enoch Godongwana’s 2022 Budget Speech. These proposed new limits, effective from 1 March 2022, will increase the amount of tax relief employers can claim when employing young people.

In this article, we find out what the new limits are, look at a few ETI calculations to see the potential tax reduction, and draw attention to the pitfalls for employers to ensure this ETI incentive can be claimed successfully, allowing companies to employ more young people by sharing the cost with government.

When, Why and Whose Jobs You Should Be Outsourcing

If you are a small business owner it can often feel like you need to do everything yourself in order to keep the wolf from the door. It's easy to feel like everything you can do is money saved. This is, however, misleading and trying to do everything yourself can in fact put your company at a larger risk than if you let other professionals take care of matters for you.

Knowing when, where and which services should be outsourced is going to be a critical step along the pathway to success. Optimizing this process will free up your time to focus on core business areas, while also bringing in fresh thinking and expertise that can invigorate the business, lead to fresh insights and take your company to the next level. So how do you know when it's time to outsource a particular task, and which tasks are those most in need of outsourcing?

Planning to Cease Being a South African Tax Resident? What You Should Know Before Approaching SARS

Another channel has been made available to taxpayers to inform SARS that they are ceasing to be tax residents. While this might make it seem a simple matter to break South African tax residency, the reality is that doing so requires comprehensive understanding of the implications and careful planning, whether for a person, a trust or a company.

Informing SARS that you are ceasing to be a tax resident via any channel could result in unintended consequences, such as an audit or an unexpected tax liability. With increasing numbers of skilled and wealthy South Africans emigrating, the tax and other implications of this option should be well understood before any decisions are made, and SARS is best approached with the assistance of a trusted advisor.

A Guide to Accessing Funds That Can Help Your Small Business

Small and Medium-Sized Enterprises (SMEs) have financing opportunities some owners may not be aware of, or if they are, may not know how to fully take advantage of them.

There are various schemes available to assist SMEs with grants, business loans and “soft loans” and development programs. These schemes are primarily to support SMEs finance operating costs and expansion projects – however they mostly have an undertone of creating and protecting employment – together with training and skills development.

Your Tax Deadlines for April 2022

1 April Start of the 2022/23 Financial Year

7 April Monthly Pay-As-You-Earn (PAYE) submissions and payments
25 April Value-Added Tax (VAT) manual submissions and payments
28 April Excise Duty payments
29 April Value-Added Tax (VAT) electronic submissions and payments & CIT Provisional payments where applicable.

Disclaimer

The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for professional, detailed and appropriate advice.

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