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Use this ten-point checklist to stay out of trouble with SARS when filling in your employee's IRP5 forms

by , 10 July 2013
'Sir, there have been some inconsistencies in the IRP5 forms of your employees. We at SARS have decided to audit your company, and if we don't like what we find... well, I hope you have astronomical sums of money lying around to pay the fines.' Nobody wants to receive that phone call! Don't put a target on your business, because SARS would love to shoot it down. Use this simple checklist to ensure your business fills in the employee's IRP5 forms correctly.

The truth is, it only takes five minutes to check that you're filling out your employee's IRP5 forms correctly. These five minutes could save you hours in drama and thousands in fines!

Tax Returns Made Simple recommends checking these ten key areas before it's too late.

Ten-point IRP5 Form Checklist for employers
  1. Have you deducted the right amount of employee's tax under the 3601 code?
  2. Have you revealed taxable pensions under code 3603?
  3. Have you put the employee's bonus under code 3605?
  4. Have you put the employee's overtime under code 3607?
  5. Have you put the employee's cellphone / telephone allowance under code 3712? NB: Make sure you do this, because your employee can deduct calls and subscriptions from their personal income tax.
  6. Have you made sure you're using the correct codes for travel allowances? Code 3702 is for reimbursements over the prescribed rate per kilometer, or where the employee receives a fixed travel allowance in addition to the reimbursement, or if the employee travels more than 8 000 business kilometres per year.
  7. Have you used codes 3705 and 3704 for the employee's local travel subsistence allowance?
  8. Have you given one of your employee's relatives a bursary? Declare this under code 3809 of that employee's IRP5
  9. Have you used code 3810 for any medical aid contributions your business has made on behalf of the employee?
  10. Have you reflected the employee's commission under code 3606, and NOT code 3601?

Asking yourself these ten simple questions will ensure you're filling out your employee's IRP5 forms the right way, so you never have to worry about SARS phoning you up to say otherwise.

Click here to find out how to complete your individual tax return yourself.

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