Explaining interim tax certificates

Employers provide interim tax certificates on request to employees when the leave employement. We provide more details on these type of certifi

According to Paragraph 13(2)(b) of the Fourth Schedule to the Income Tax Act, employers are required to issue tax certificates to employees within 14 days, after the termination of an employment relationship.

Although it is accepted in practice that tax certificates are issued to terminated employees at the end of the tax year, there are scenarios where compliance to the rule is necessary.

These include employee emigrations, the death of an employee, insolvencies, etc. where the certificate is essential for the South African Receiver of Revenue, to determine the employees final tax liability.

How to print an Interim tax certificate:

• Reports
• Reports and Maintenance
• Select the IRP5/IT3’s report
• Select the action required
• For the IRP5 certificates being printed during anytime in the tax year, the system will default to Interim IRP5 – Terminations 
• Select the Type of Run - complete a TEST run(s) until all errors have been resolved before doing a LIVE run
• Indicate whether only the Current Company or Multiple Companies should be included
• If Multiple Companies are selected, only the companies with the same PAYE number will be displayed for selection
• Click on the company and enter the password per payroll company
• The Selected column will display a YES for each selected company then close
• Confirm the company details
• Select the reports to be printed
•  Complete the selections and then choose the employee to print for, from the list of terminated employees

The IRP5/IT3 Recon Report will print a list of all employees with the amounts per IRP5 code, the PAYE paid or the reason code that will print on the IT3 certificate if no tax was deducted

The IRP5/IT3 Summary Report will print the totals per IRP5 code

•  Select the location where the IRP5 resubmission file should be written to
• The default location will be the current payroll directory 
• The IRP5 Interim submission file name will default to Interimxx (xx = current tax year, e.g.INTERIM.20)
• Select the printer that you normally print to
• If any mandatory information is missing a list will reflect
• Correct the errors and create another Interim IRP5 Test run
• Once all the outstanding information has been entered/corrected, repeat the process choosing the Type of Run = Live Run
• The Interim.xx file will now exist in the specified directory
• The Interim certificate number will display on the employee’s Basic Information (IS) screen, on the Statutory Details tab.
   
  Important: The interim.xx file that is created must NOT be imported into e@syFile. This process is merely to create the IRP5/IT3a so that it can be issued to the employee on paper. When the Tax Year End Submission is completed, the interim tax certificate will also be included in the final submission to SARS.