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Repayments of Covid-19 employees’ tax deferrals

  • June 14th, 2024
  • Tax

Affected parties: Employers and representative employers that made use of the COVID-19 tax relief to defer their employees’ tax payments.

Background

On 21 April 2020, the President announced additional measures to assist employers to provide financial stability to their employees. One of these measures included a 35% deferral on the monthly PAYE liability owed to SARS for five months from 1 April to 31 August 2020. In addition, SARS will not impose any penalty or interest on the deferred PAYE liability amount. This meant that employers were still liable to pay the remaining 65% PAYE as per normal.

Repayment obligation

The employer must make repayment of the deferred tax in six equal instalments, together with the monthly payroll tax liabilities, starting in October 2020 (payable by 7 October 2020) and every subsequent month until March 2021 (payable by 5 March 2021).

SARS has determined the six equal instalments in respect of the total deferred employees’ tax and has included the amounts since 15 September 2020 in the monthly Statement of Account (EMPSA).

The instalments are payable on the following dates:

  • 7 October 2020;
  • 6 November 2020;
  • 7 December 2020;
  • 7 January 2021;
  • 5 February 2021; and
  • 5 March 2021.

Penalty and interest will be imposed on any default (short payment or no payment) of any instalment.

Repayment process

Employers and representative employers must not include and process the repayments with the payment of the monthly payroll tax liabilities. Instead, employers and representative employers are advised to make a separate payment in respect of each instalment against the unique 19-digit payment reference number (PRN) reflected in respect of each instalment on the employer’s EMPSA to allocate the payment of each instalment to the correct period.