The South African Revenue Service (SARS) has placed a spotlight on Pay-As-You-Earn (PAYE) compliance, naming it a key priority in its 2023/24 Annual Report. This shift underscores SARS’s commitment to enhancing oversight and enforcing employer accountability in tax matters.
Employers play a pivotal role in South Africa’s PAYE system, deducting taxes from employees’ earnings and remitting them to SARS. With this renewed focus, SARS is emphasising the importance of accurate and consistent compliance in these processes.
SARS’s intensified approach means non-compliance—whether intentional or accidental—is likely to face greater scrutiny. For employers unsure about their PAYE processes, now is the time to proactively identify and address any gaps to avoid potential penalties or audits.
To enforce this, SARS’s Specialised Audit division has expanded its scope to include a thorough review of PAYE compliance for both individuals and businesses. Beyond PAYE, these audits also cover related employment tax considerations, such as the Employment Tax Incentive (ETI).
What This Means for Businesses
SARS auditors are equipped with the tools and training to detect compliance issues across various industries. Their reviews range from desk-based evaluations to detailed on-site inspections, focusing on:
- Accuracy of PAYE withholding
- Consistency in remittance
- Proper application of employment-related tax incentives
Given the heightened scrutiny, businesses should prioritise a comprehensive review of their PAYE systems. Ensuring compliance now can safeguard against future complications and align with SARS’s expectations for accountability in tax administration.
By addressing these priorities proactively, employers can stay ahead in an evolving regulatory environment and support a seamless relationship with SARS.
