Checklist: February is the month to close off your financial year

February is the last month (for the 2018 tax year) in which you can make final adjustments for the tax period 1 March 2017 – 28 February 2018.

Let’s take a quick look at which earnings and deductions you ought to be checking before the 28 February 2018 deadline arrives. Note: once done, this allows your payroll files to be rolled over (i.e. locked down) in preparation for reconciliations to be calculated and submissions to be done—which will take place later this year.

1. Monthly EMP201. Perhaps the most important check is to make sure that the monthly EMP 201 submission balances with the report in payroll and balances with money paid over to the Receiver of Revenue (SARS). Being certain of this balance makes your June reconciliation a lot easier to do.

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2. Car and travel allowances. This is an opportune time to inform all relevant employees about key requirements. They must be sure that they have completed the logbook and to set a reminder to take a final odometer (mileage) reading at end of February. You should strive to reduce or increase car allowances, in order to maximise related tax deductions.

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3. Retirement fund contributions. Remind your staff that they can claim up to 27.5% of their remuneration (max R 350 000) for the financial year. Some employees may want to top-up their retirement contributions in order to make full use this tax-planning opportunity.

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4. Medical aid details. Make sure that you have registered all dependants (with the correct dates). This ensures that your employees are certain to get a full tax credit.

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5. Record keeping. Let’s check that we have all the required documentation to file. You need to keep these records for 5 years from the date of the submission of this tax period. Be sure to check:
   1. Medical aid returns
   2. Pension schedules
   3. Company car documentation
   4. Car allowance documentation
   5. Expense refunds — Do you have all the documents to back up the expenses claimed.
   6. Travel expense records, especially if subsistence allowances were paid.
   7. Tax directives are correctly applied and filed for reference.
   8. Bursary scheme applications are all in order.

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6. Employee tax incentive. Please check that you are claiming for the correct employees. You must not submit claims for ETI that you might not entitled to.

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7. Basic payroll information. You need access to basic payroll information so that your IRP 5 certificates can be produced. Be sure that you have the following basic information needed for your employee’s IRP5 certificates:
   1. Name and surname
   2. Employees address
   3. Identification number
   4. Tax number

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8. Evaluate your payroll software. Now would be the ideal time to evaluate your payroll software:
   1. Is it still economical?
   2. Does it increase you and your staff’s productivity?
   3. Does if offer comprehensive employee self-service functionality?
   4. Are you getting the reports you need?
   5. Can you upload the banking file?
   6. Are you tired of manual data inputs?

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For further information, feel free to contact Ian Hurst at Paymaster People Solutions