In June 2021, the South African Revenue Service (SARS) introduced the PAYE Admin Penalty, enabling the imposition of administrative penalties for the failure to submit EMP501 reconciliations on time. This penalty structure was divided into three phases, with the first two phases already implemented in June 2021 and April 2022, respectively.

Currently, SARS is in the process of implementing phase 3, which will incorporate legal changes effective 19 June 2022. Phase 3 of the PAYE Admin Penalty includes penalty imposition based on estimated amounts and penalty adjustment based on actual amounts determined later. It’s important to note that the enhancements to the administrative penalty process will only apply from the date of promulgation, January 19, 2022, and will affect reconciliation periods going forward.

See the full notice here.