EMP201 and EMP501: the monthly return and the reconciliation that checks it

The monthly return#

The EMP201 declares and pays PAYE, UIF and SDL for the preceding month, and is due within seven days of the month end.

When the seventh falls on a weekend or a public holiday, the date moves earlier, to the last business day before it. It never moves later. That direction catches people out, because almost every other deadline in business life moves the other way.

The reconciliation is the real test#

Twice a year the EMP501 reconciles what you declared, what you paid, and the tax certificates you are issuing to employees. Interim covers the six months to August. Annual covers the full tax year and is what produces your employees' IRP5 certificates.

A monthly return can be wrong for six months without anything objecting. The reconciliation is the point at which the three numbers have to agree, and where they do not, the difference has been accruing since the error started.

SARS confirms the exact submission window at the time rather than fixing it in advance, so last year's dates are not this year's. Check the current window rather than carrying one forward.

Why the numbers disagree#

Rarely arithmetic. Almost always one of these:

A mid-month change entered late

A salary change, a new starter or a leaver captured after the run, then corrected in the next month rather than the one it belonged to. The year still totals correctly and no individual month does.

A benefit treated inconsistently

Travel allowance, medical contribution or a company car handled one way in payroll and another in the certificate. It is the same underlying figure described twice.

A payment made outside payroll

A bonus, a settlement or a final payment paid directly and reconstructed for the reconciliation afterwards. If it did not go through payroll, payroll cannot reconcile it.

The one thing to do about it#

Reconcile monthly rather than twice a year. Comparing one month of declarations against one month of payroll takes very little time and finds the error in the month it happened, which is the only month in which it is cheap to fix.