An EMP501 reconciliation is a report of all your employees’ earnings, which must be submitted to SARS. Employers are required to reconcile the payroll tax liabilities (PAYE, SDL and UIF), declared monthly on the Employer declarations (EMP201). It is the employer’s obligation to deduct and declare the correct amount of employees’ tax from the employee’s remuneration each month and pay to SARS on a monthly basis.
During this period, employers are required to submit their annual reconciliation declarations (EMP501). It must reflect accurate payroll information about employees, monthly employer declarations (EMP201) for PAYE, UIF and SDL, payments made, and employee tax certificates (IRP5/IT3(a)s, covering the full tax year from 1 March 2024 to 28 February 2025.
The three elements that must be reconciled for your submission to be successful are:
- Monthly Employer Declarations (EMP201s) submitted (Pay-As-You-Earn (PAYE) and/or Skills Development Levy (SDL), Unemployment Insurance Contributions (UIC) amounts due, and Employment Tax Incentive (ETI), if applicable)
- Payments made (excluding penalty and interest payments)
- IRP5/IT3(a)s generated – PAYE, SDL and UIC values.
The annual reconciliation submission period for 2025 will run from 1 April to 31 May 2025.
EMP501 reconciliations are due twice during a particular financial year:
- Interim period – six-month period 1 March to 31 August (Due 31 October)
- Annual period – full tax year period 1 March to 28/29 February (Due 31 May)
The importance of capturing the correct PAYE liability each month on the EMP201 returns is very important, as SARS will impose penalties and interest on incorrect calculations, including corrections done on the EMP501 reconciliation and late or incomplete reconciliations.
Please be aware of critical compliance changes for the 2026 Employer Filing Season:
- Employers will not be able to submit PAYE reconciliations without valid Income Tax Reference Numbers for all employees required to register under Section 67 of the Income Tax Act.
- In previous years, missing numbers triggered warnings in e@syFile™, allowing time for corrections. This grace period ends with the 2026 season.
- Reconciliations without valid Income Tax Numbers will be rejected outright, and non-compliance will result in administrative penalties.
Please ensure that all employees who are required to register have valid Income Tax Reference Numbers before submission.
Should you require assistance with your annual EMP501 reconciliation, CMV Accountants can help you stay compliant.