Strategy, Legal & Operations

Checklist: Preparing for and processing Tax Year-End

Learn about a series of measures to take and important dates to help you prepare for and process your payroll this Tax Year-End.

Published August 27, 20266 min read Share

Tax Year-End payroll processing is the process of checking your payroll records, reconciling employer tax values, producing employee tax certificates, and submitting the annual EMP501 employer reconciliation return to SARS.

The annual EMP501 must be submitted by the date SARS publishes in the Government Gazette, which is typically in late May. Always confirm the current filing dates on the SARS website.

Unless otherwise specified by the Commissioner, businesses must submit annual employer reconciliation returns to SARS within 60 days of the start of the employer filing season.

This checklist is for South African business owners, finance professionals, and payroll teams preparing for Tax Year-End.

Explore the Sage Tax Year-End resource centre

Key takeaways

• Confirm the current annual employer reconciliation filing dates on the SARS website before you submit.
• Verify your business details, employee information, and remuneration data before creating tax certificates or submitting payroll data.
• Reconcile Pay As You Earn (PAYE), Unemployment Insurance Fund (UIF), Skills Development Levy (SDL), and Employment Tax Incentive (ETI) values.
• Issue an IRP5 certificate where PAYE was withheld, or an IT3(a) certificate where no PAYE was withheld.
• Make sure your payroll system and reporting codes are up to date before completing year-end processing.

Here’s what we’ll cover:

What payroll changes should you check for 2026?

Review the following items before processing year-end payroll.

The figures and effective dates below are retained from the approved source article and require final verification before publication.

Individual tax rates, thresholds, and rebates

The source article states that there are no changes for 2026 and lists the following SARS rebate and tax thresholds:

• Primary rebate: R17,235
• Tax threshold for people under 65: R95,750
• Tax threshold for people aged 65 to 74: R148,217
• Tax threshold for people aged 75 and over: R165,689

Auto-assessments for selected provisional taxpayers

SARS is broadening its auto-assessment programme to include certain provisional taxpayers.

If you or your employees are eligible, SARS may pre-populate tax returns using third-party data.

Review all pre-filled information and submit any corrections before the relevant deadline to help avoid penalties.

Updated IRP5 and IT3(a) source codes

For the 2025 tax year, the source article states that SARS introduced new and revised IRP5 and IT3(a) source codes for reporting specific deductions and fringe benefits.

 Check that your payroll system is up to date and that you use the correct codes when issuing employee tax certificates.

Provisional tax classification for labour brokers

From 1 March 2025, the source article states that labour brokers with valid exemption certificates are classified as provisional taxpayers under SARS rules.

If your business works with labour brokers, review how this classification affects tax calculation, reporting, and payment processes.

National Minimum Wage

The source article gives the National Minimum Wage as R28.79 per hour from 1 March 2025.

Review employee pay rates, contracts, and payroll settings where needed.

Confirm the current rate before publication and before applying changes.

SARS eFiling Express Access dashboard

The source article states that SARS eFiling includes an Express Access dashboard for employers.

It provides an overview of outstanding tasks, deadlines, and submission statuses.

How do you prepare payroll information for Tax Year-End?

Complete these three checks before you submit payroll data.

Step 1: Verify your business details

• PAYE reference number
• UIF reference number
• SDL reference number
• Registered company information

Step 2: Check each employee’s information

• Full name
• Identity or passport number
• Bank account number
• Income Tax reference number
• Address and phone number
• Directive number, where applicable

Step 3: Validate remuneration data

• Check employee earnings, deductions, and employer contributions.
• Confirm that the correct IRP5 codes were used.
• Use the medical aid billing statement to check that medical aid dependants were reflected correctly throughout the tax year.

Which tax certificate should each employee receive?

Give an IRP5 certificate to each employee who earned remuneration and had PAYE withheld.

If no PAYE was withheld from an employee’s earnings, issue an IT3(a) certificate, which summarises income for an employee who was not subject to PAYE.

These certificates summarise the employee’s pay and deductions for the year.

You can use payroll software to produce, print, and send tax certificates, and distribute them securely online.

How do you process payroll at Tax Year-End?

1. Reconcile your PAYE, UIF, SDL, and ETI values.
2. Create a comma-separated values (CSV) file from your payroll system and import it into e@syFile Employer.
3. Check the processing date in your payroll software before completing year-end processing. The source article specifies 28 February 2025; verify the correct date for the intended tax year.
4. Complete your year-end processing and make the final submission for the tax year.

What are the important Tax Year-End dates?

The source article lists the dates below for the 2025/26 tax year.

However, the dates appear to describe the period beginning 1 March 2025 and must be confirmed against current SARS notices and the Government Gazette before publication or filing.

Date in source article	Event
28 February 2025	Last day of the tax year
1 March 2025	New tax year starts
30 May 2025	Deadline for annual employer reconciliation submissions
31 October 2025	Deadline for mid-year employer reconciliation submissions

Before you submit

• Confirm the current annual and mid-year employer reconciliation filing dates on the SARS website.
• Check that payroll software, source codes, employee records, and company registrations are current.
• Keep evidence of reconciliations and review imported data before submitting it through SARS eFiling or e@syFile Employer.

Final thoughts

Tax Year-End is easier to manage when payroll information is checked before submission.

Verify business and employee records, reconcile PAYE, UIF, SDL, and ETI values, use the correct source codes, and confirm the current filing deadlines with SARS.

If you need help with tax administration or deductions, contact SARS through an official branch or online helpdesk service.

Editor’s note: This article was first published in February 2024 and has been updated for relevance.

Frequently asked questions about payroll Tax Year-End

What is payroll Tax Year-End in South Africa?

It is the process of checking payroll records, reconciling employer tax values, producing employee tax certificates, and submitting the annual employer reconciliation return to SARS.

What is an EMP501?

An EMP501 is the employer reconciliation return submitted to SARS.

The source article says the annual return must be filed by the date published in the Government Gazette, typically in late May. Confirm the current deadline before filing.

What information should you check before submitting payroll data?

• Check business tax and levy reference numbers,
• registered company information,
• employee identity and contact details,
• remuneration,
• deductions,
• employer contributions,
• directive numbers,
• and the IRP5 codes used.

When should an employee receive an IRP5 certificate?

Issue an IRP5 certificate when an employee earned remuneration and PAYE was withheld.

When should an employee receive an IT3(a) certificate?

Issue an IT3(a) certificate when an employee earned remuneration but no PAYE was withheld.

How can you check the current Tax Year-End deadlines?

Check the SARS website and the relevant Government Gazette notice for the filing period before submitting your employer reconciliation return.

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