What is an EMP501? – Employer Reconciliation Explained

Reduce your stress levels by trusting Booysen Accountants with all your accounting and taxation needs. As a business owner, you usually have numerous issues to deal with at any given time. Not only do you have to ensure that the business is operating smoothly on a day-to-day basis, but you also have to manage the finances of the company and ensure that you remain compliant with the South African Revenue Service (SARS) at all times. It can all become a bit overwhelming at times and most employers simply don’t have the resources to address many of these issues properly. A company is responsible for its own business tax, and also has to ensure that the various taxes and levies that affect the employees working at the company are paid diligently. With regard to staff, one of the documents that SARS requires an employer to submit is called an employer reconciliation declaration, also referred to as an EMP501.

An employer reconciliation is a detailed report of employees earnings at a company. The EMP501 has to be submitted twice in a financial year and an employer is tasked with ensuring the accuracy of this report. Employers are required to submit a monthly report, called an EMP201, on the various taxes and levies paid by employees. Deductions such as Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF) are collected by the company and paid over to SARS as part of the EMP201. However, this monthly report reflects only the total amount that is owed to SARS and does not reflect how much each individual staff member contributes towards the total. This is why a business is required to submit an EMP501 biannually. The employer reconciliation declaration is a much more detailed report that should indicate exactly how much each employee contributed towards the various deductions.

Companies are required by law to submit an EMP501 twice during the year of assessment and the submission deadline for the interim period, 31 October, is approaching very quickly. There are certain things that need to balance for your submission to be successful: your monthly EMP201 declarations need to add up to the total of the payments made to SARS, then your EMP201 payments must also balance with your IRP5/IT3(a)s generated. This means that your payments throughout the year need to be reflected accurately in the EMP501 for your submission to be successful. The whole procedure can become quite overwhelming and a business owner simply might not have the time or expertise to process all the information correctly. Put your mind at ease and trust Booysen Accountants to manage your financial affairs. We provide expertly tailored solutions to help you beat the deadlines and stay in good standing with SARS. Contact Booysen Accountants today on 012-740-7703 or email: This email address is being protected from spambots. You need JavaScript enabled to view it. to talk to one of our qualified accountants about the right package for you!