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Avoid penalties from SARS for not issuing the right certificates! What you need to know about IT3(a) and IRP5

by , 05 June 2015
The onus is on you to make sure you issue the right certificate, to the right employee, at the right time

There's a 10% penalty if you don't submit your tax certificates to SARS on time. Here's how to make sure this never happens to you.

Three types of employee tax certificates and when to use them

These are the IRP5, the IT3(a) and the ITREG. The IRP5 and IT3(a) certificates are now combined into one form. You can issue either as an IRP 5 certificate or an IT3(a) certificate. You decide which one to issue to an employee, depending on whether or not you deducted employees' tax from the employee.

If PAYE was deducted from the employee during the tax year, then issue an IRP5.
If no PAYE was deducted during the tax year, then issue an IT3(a).
Use the ITREG to register employees for a tax reference number.

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If you made these five payments, issue an IT3(a), not an IRP5:

1. Foreign employment income that isn't subject to the deduction of employees' tax.

2. Remuneration that doesn't exceed the 'tax threshold'. The current threshold for the 2016 tax
year is:
•  R73 650 for employees younger than 65; or
•  R114 800 for employees older than 65; and
•  R128 500 for employees (if older than 75) per year.

3. If the employee earns less then R2 000 per year, you don't need to submit an IT3(a) at all.

4. Lump sum payments (not otherwise reflected on an IRP5 certificate) from which you haven't deducted any tax. This usually happens in cases where SARS has issued you with a tax directive telling you not to deduct tax from that lump sum.

5. Directors' remuneration that has only been determined in the following tax year (remember, in some cases, directors will only find out how much their salary is once the company's profits etc. have been declared.

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