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.

Feb 12, 20264 min read Share

Tax Year-End is almost here, but don’t stress.

If you haven’t already planned for it, you still have time to get everything ready.

Out of all the payroll year‑end tasks, the most important is submitting your annual EMP501 by the date SARS publishes in the Government Gazette (typically late May).

Always confirm the current year’s dates on the SARS website before you file.

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

This checklist is designed for South African business owners and finance professionals who want to stay ahead of SARS deadlines and avoid last-minute stress this Tax Year-End.

Here’s what we’ll cover:

What’s new for 2026?

Individual tax rates, thresholds, and rebates: no changes for 2026

Use the current SARS thresholds:

• primary rebate R17,235
• tax thresholds:
  • R95,750 under 65
  • R148,217 65–74
  • R165,689 75+

SARS has expanded auto-assessments to select 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 carefully and submit any corrections before the deadline to avoid penalties.

Employers must use updated IRP5/IT3(a) source codes for certain deductions

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

Check that your payroll system is up to date and that you’re using the correct codes when issuing tax certificates to employees.

Labour brokers with exemption certificates are now classified as provisional taxpayers

From 1 March 2025, labour brokers who hold valid exemption certificates are classified as provisional taxpayers under SARS rules.

This change affects how these labour brokers calculate, report, and pay their tax.

If your business works with labour brokers, it’s important to understand this updated classification and review your processes to ensure they remain compliant.

The National Minimum Wage is now R28.79/hour

Effective 1 March 2025, the National Minimum Wage has increased to R28.79 per hour.

Review your pay rates to ensure all employees are paid at least the new minimum, and update employment contracts and payroll systems as needed.

SARS eFiling now features an Express Access dashboard for easier submissions

SARS has launched an Express Access dashboard on eFiling, designed to simplify and speed up tax submissions for employers.

The new dashboard provides a clearer overview of outstanding tasks, deadlines, and submission statuses, helping you stay organised and compliant.

Payroll year-end checklist

3-step information verification process

Before you submit your payroll data, complete this three-step information verification process:

Step 1: Verify your:

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

Step 2: Ensure your employees’ information is complete and accurate, including their:

• Names
• ID or passport numbers
• Bank account numbers
• Income tax reference numbers
• Address and phone numbers
• Directive numbers.

Step 3: Check your remuneration data by:

• Validating your employees’ earnings, deductions, and employer contributions.
• Ensuring you have processed the above using the correct IRP5 codes.
• Using the medical aid billing statement to ensure that medical aid dependants were reflected correctly throughout the tax year.

All staff who earned remuneration, and from whom PAYE was withheld, must get an IRP5 certificate.

If no PAYE was withheld from an employee’s earnings, issue them an IT3(a) certificate (a summary of income for employees not subject to PAYE).

This crucial document summarises their pay and deductions for the year.

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

Process your payroll

Now is when you get down to the detail.

Step 1: Reconcile your PAYE, UIF, SDL and ETI values.

Step 2: Create a CSV file from your payroll and import it into e@syFile Employer.

Complete your year-end

Check your processing date on your payroll software – it should be 28 February 2025.

You can now complete your year-end processing and make your final submission for the tax year.

Important Tax Year-End dates

We’ve already mentioned some critical dates around payroll year-end, but here they are again, along with other important dates for the 2025/26 tax year.

Add them to your calendar if you haven’t already:

• 28 February 2025: The 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.

Final thoughts

Payroll year-end doesn’t have to be complicated.

With a bit of forethought, you can complete your processing quickly before preparing for the next tax year.

If you have trouble with tax administration or need to fill in the blanks regarding your deductibles and ensure that your business is tax compliant, go to your nearest SARS branch or use the online helpdesk service.

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