The South African Revenue Service (SARS) is strictly enforcing mandatory Income Tax Reference Numbers for all employee PAYE submissions, meaning reconciliations missing these numbers will be rejected. SARS also updated thresholds for bursary fringe benefits and increased the annual retirement fund tax deduction limit.
Key Compliance & Regulatory Updates
- Mandatory Tax Numbers: Employers must report valid tax reference numbers for every employee on e@syFile™ Employer submissions; missing details cause immediate rejection and potential administrative penalties (detailed on the South African Revenue Service portal).
- Employment Tax Incentive (ETI): SARS published Interpretation Note 145 to crack down on ETI abuse, making it clear that paperwork alone is insufficient and individuals must strictly meet statutory employee definitions to qualify.
- Retirement Fund Limits: The annual deduction limit under section 11F for employee contributions to pension, provident, and retirement annuity funds increased to the lesser of R430,000 (up from R350,000) or 27.5% of remuneration.
Thresholds & Fringe Benefits
- Bursary Income Ceiling: The annual remuneration income ceiling for employee bursary/scholarship fringe-benefit exemptions increased to R90,0000 (raised for the first time since 2017).
- Tax Relief vs. Inflation: Budget 2026 adjustments provided minor inflationary relief, but payroll analysts note that cumulative bracket creep over prior years keeps pressure on net take-home pay.
Would you like more details on employer filing requirements via e@syFile or information on individual personal income tax brackets for this season?
Contact us on sales@lagoonpayroll.co.za