Official interest rate for fringe benefits at SARS
The official interest rate of the South African Revenue Services (“SARS”) is being used in the calculation of fringe benefits being made available to employees in the form of low interest loans or of deemed benefits such as debit loans to directors or their associated persons.
The official interest rate of SARS was already determined at 1% above the prevailing repo rate as of 1 March 2011. The official interest rate rises on the first day of the month following the month after which the repo rate changed.
Therefore employers must at all times, remain up to date with the repo rate, because as soon as a change takes place, fringe benefits that are linked with the official interest rate, must be adjusted accordingly.
Currently the repo rate is 5.5%; thus the official interest rate for fringe benefits is 6.5%.
U-filing – New electronic service through a Virtual Office to claim certain UIF benefits
The Unemployment Insurance Fund (“UIF”) division of the Labour Department started a few years ago with an extensive project aimed at improving their efficiency and it has proven to be highly successful thus far. To enable all parties to enjoy the benefit of the latest technology and efficient practises as a consequence thereof, the UIF established a Virtual Office, called U-filing.
The purpose of the Virtual Office System is to create an environment in which UIF benefits can be applied for, approved and paid without a single visit to a labour office. The whole process can be done from a computer with an internet connection.
The following benefits can be claimed via U-filing: Unemployment, maternity, adoption and illness’ benefits. Death benefits cannot be processed virtually as yet.
An employer must complete an accreditation application form and will thereafter be registered as an accredited user of the Virtual Office System. The system became effective for public use as of March 2012.
Pay As You Earn (“PAYE”) – Final submission date 31 May 2012
We wish to remind all employers that the PAYE reconciliations (or IRP5 reconciliations) must be submitted to SARS by 31 May 2012. Very important – a new E@syfile version must be downloaded from the SARS web page, but the previous E@syfile must first be backed up. The new version may delete the previous year’s data which can’t be retrieved in any way.
If you need any further information please contact Christa Marais at 021 840 1600 or at firstname.lastname@example.org.
Earnings Threshold in terms of Basic Conditions of Employment (“BCEA”)
As of 1 July 2011 the earnings threshold was increased to R172 000. In other words, employees earning above this amount are excluded from the terms of the BCEA which deals with aspects such as working hours, overtime, night work and public holidays. Furthermore, the definition of remuneration in this specific act has now been defined as EXCLUDING all overtime.