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Fourth Schedule Income Tax & SARS eFiling

PAYE Compliance & EMP201 Returns

Eliminate costly SARS penalties and protect company directors. We deliver meticulous monthly Pay-As-You-Earn management, EMP201 return submissions, and bi-annual EMP501 tax reconciliations.

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Statutory PAYE Framework: 4th Schedule & Employer Withholding Duties

Under the Fourth Schedule to the Income Tax Act 58 of 1962, every South African employer is an involuntary agent of the State, mandated to withhold employee tax (PAYE) at source from all remuneration paid to staff and directors.

2026/2027 Personal Income Tax Brackets

SARS applies progressive statutory tax rates to all taxable income earned by individuals:

R0 – R237,10018% of taxable income
R237,101 – R370,500R42,678 + 26% of taxable income above R237,100
R370,501 – R512,800R77,362 + 31% of taxable income above R370,500
R512,801 – R673,000R121,475 + 36% of taxable income above R512,800
R673,001 – R857,900R179,147 + 39% of taxable income above R673,000
R857,901 – R1,817,000R251,258 + 41% of taxable income above R857,900
R1,817,001+R644,489 + 45% of taxable income above R1,817,001

Statutory Tax Rebates & Medical Credits

Annual statutory income tax rebates directly reduce the final tax liability for South African individual taxpayers:

Primary Rebate (All Individuals)R17,235
Tax threshold: R95,750
Secondary Rebate (Age 65 and Older)R9,444
Tax threshold: R148,217
Tertiary Rebate (Age 75 and Older)R3,145
Tax threshold: R165,689
Section 6A Medical Scheme Fees Tax Credit:

Direct monthly tax deductions: R364 per month for the primary member, R364 per month for the first dependant, and R246 per month for each additional dependant.

EMP201 Deadlines, Section 213 Penalties & Director Personal Liability

SARS enforces employer compliance with zero tolerance. Failing to file the EMP201 return or underpaying statutory employee tax balances triggers immediate severe legal consequences under the Tax Administration Act 28 of 2011:

7th-of-the-Month Deadline

EMP201 declarations and payments are strictly due by the 7th calendar day of the subsequent month (or last preceding business day if on a weekend or public holiday).

10% Late Payment Penalty

Section 213 of the TAA assesses an immediate 10% penalty on total overdue PAYE, SDL, and UIF amounts, plus monthly compound interest at the statutory PFMA rate of 11.75%.

Section 180 Director Liability

SARS possesses statutory authority to hold directors, members, and financial officers personally liable for unpaid employee taxes, piercing corporate veil protections.

Monthly PAYE Compliance Calendar & Process

How My Accountant coordinates your pay run to guarantee clean filings well ahead of the SARS 7th-of-the-month cutoff.

25th

Payroll Cutoff

Collation of all variable hours, overtime, bonuses, expense claims, and new staff tax declarations.

28th

Tax Computation

Application of statutory tax brackets, Seventh Schedule benefits, and medical tax credits across all staff.

1st–4th

EMP201 Generation

Filing of draft EMP201 on SARS eFiling, verifying ledger matching and PRN payment advice numbers.

5th

Client Pre-Approval

Employer sign-off on total tax liabilities with clear payment instructions for electronic bank transfer.

7th

Statutory Cutoff

SARS final payment deadline. Full payment receipt before midnight avoids automatic 10% penalty assessment.

Comprehensive PAYE & Employer Tax Deliverables

Protect your business against statutory tax discrepancies with end-to-end management by accredited SARS tax practitioners.

Monthly EMP201 Preparation

Accurate preparation and calculation of monthly PAYE, SDL, and UIF liabilities on SARS eFiling, reconciling gross payroll against all statutory schedules.

Fringe Benefit Tax Valuations

Seventh Schedule fringe benefit computations for company-provided vehicles, employer medical aid subsidies, low-interest staff loans, and travel allowances.

Medical Credit Optimization

Application of Section 6A and 6B Medical Scheme Fees Tax Credits for employees and qualifying dependants, ensuring correct net tax withholding.

PRN & Payment Reconciliation

Generation of 19-digit SARS Payment Reference Numbers (PRNs) and reconciliation against electronic bank payments to prevent unallocated ledger debits.

Bi-Annual EMP501 Reconciliations

Comprehensive balancing of monthly EMP201 declarations against bank payments and IRP5 tax certificates during the Interim (October) and Annual (May) filing windows.

SARS Audit & Dispute Support

Direct representation during SARS payroll verification audits, resolving IT180 assessments, and drafting Section 217 penalty remission requests.

Transparent PAYE Compliance Packages

Flat-rate monthly compliance retainers with zero hidden setup fees or surprise admin charges.

Small Team EMP201 Retainer

R550/per month

For small business employers with 1 to 5 staff members.

  • Monthly EMP201 calculation and submission
  • PAYE, UIF, and SDL statutory tracking
  • Medical aid Section 6A credit calculations
  • SARS PRN payment advice generation
  • Turnaround SLA: 3 business days prior to the 7th
Select Package
Most Popular

Growing Employer Retainer

R950/per month

Comprehensive compliance for expanding teams of 6 to 20 staff.

  • Full monthly EMP201 submission and monitoring
  • Seventh Schedule fringe benefit valuations
  • Director remuneration tax structuring
  • Bi-annual EMP501 reconciliation support
  • SARS statement of account monitoring
Select Package

Mid-Market Employer Retainer

R1,650/per month

Tailored for multi-tier enterprises with 21 to 50 active employees.

  • Dedicated senior tax practitioner
  • Complex overtime and variable commission rules
  • Expatriate and foreign worker tax certificates
  • Both Interim and Annual EMP501 recons included
  • Full IRP5/IT3(a) generation and bulk submission
Select Package

Frequently Asked Questions

Essential guidance on South African PAYE calculations, EMP201 deadlines, and SARS employer tax rules.

Under the Fourth Schedule to the Income Tax Act 58 of 1962, the EMP201 declaration and full payment of Pay-As-You-Earn (PAYE), Skills Development Levies (SDL), and Unemployment Insurance (UIF) must be received by SARS on or before the 7th calendar day of the month following the payroll deduction period. If the 7th falls on a Saturday, Sunday, or statutory public holiday, the return and payment must be submitted by the last business day immediately preceding the 7th.

Under Section 213 of the Tax Administration Act 28 of 2011 (TAA), an automatic and immediate 10% late payment penalty is assessed against the employer on the total unpaid balance of PAYE, SDL, and UIF. Furthermore, under Section 89(2) of the Income Tax Act, interest compounds monthly at the prescribed statutory PFMA rate (currently 11.75% per annum) from the first day following the due date until full settlement.

Yes. Under Section 180 of the Tax Administration Act, SARS has explicit statutory power to hold company directors, public officers, and financial managers personally liable for unpaid employee tax debts if they intentionally or negligently withheld taxes from workers without remitting those funds to the SARS commissioner. This personal liability pierces the corporate veil.

Section 6A provides a direct monthly tax credit deductible against an employee calculated PAYE: R364 per month for the principal member, R364 per month for the first dependant, and R246 per month for each additional dependant. Section 6B provides additional medical tax credits for qualifying disability expenses or out-of-pocket medical expenditures exceeding statutory threshold percentages.

Under the Fourth Schedule, company directors are classified as employees for PAYE purposes. Directors salaries, directors fees, and bonus drawings are subject to statutory PAYE withholding at standard personal income tax rates. Remuneration cannot be treated as informal drawings without triggering deemed dividend taxes or fringe benefit loans under Section 64E and Seventh Schedule rules.

Avoid Costly SARS Employer Tax Penalties

Ensure your EMP201 returns are calculated accurately, approved on time, and paid prior to the 7th of every month. Partner with our dedicated tax team today.

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