Employee guide to your IRP5

What is an IRP5?

Another tax year has come to an end and the 2023 tax filing season for all individuals opened on 7 July 2023. During tax filing season each individual who has received income during the period of 1 March 2022 to 28 February 2023 will need to submit their Income Tax Returns to SARS, either via eFiling or by means of going in to a SARS branch.

In order for SARS to assess the total tax liability due from an individual, they need to be informed of the accumulated income which the individual has received during a particular period, as well as the amount of the allowable deductions for this same period. This will be either via remuneration as reflected on the IRP5 certificate or income received from another source which will be supported by additional source documents.

By law, the employer is obligated to submit the employee’s IRP5 to SARS which provides information about a particular tax year. This is indicated by the transaction year, assessment year and reconciliation period. Each certificate is allocated its own individual certificate number and displays all the company’s details for which the employee works such as company name, physical address and registration numbers for PAYE, Skills Development Levy and Unemployment Insurance Fund.

The employee’s personal details are also reflected showing their employee number, name, surname, date of birth, identity number, income tax reference number as well as physical and postal addresses. Where salary payments are made directly to a bank account, these banking details will reflect as well.

Your employer should issue you with a copy of your IRP5 certificate and it is important to check that the information is correct as should any of the information displayed on the IRP5 be incorrect, the employer will need to make a correction to the error and proceed with a re-submission to SARS in order to update the information. The individual is not allowed to make any changes to information reflected on the IRP5 certificate but may make changes to certain details on the actual return which is submitted to SARS for assessment.

In certain circumstances, the employee may receive more than one IRP5. Each separate IRP5 will provide details concerning the dates that the employee has worked at the respective company as well as displaying the total income, allowances and fringe benefits received during that particular tax year. The IRP5 also reflects any statutory deductions made for Pay As You Earn, Unemployment Insurance Fund and Skills Development Levy. Contributions to Medical Aid, Provident or Pension Funds are also reflected.

Understanding the more commonly used IRP5 source codes

Income Received

The IRP5 will list different categories of income that have been received during the particular period. The categories of income are grouped under different source codes. Some of the more common codes are listed below:

3601 - Income (Generally for basic salary amounts)
3605 - Annual Payments (Normally used for annual bonuses or once off payments)
3606 - Commission Payments
3701 - Travel Allowances (Subject to PAYE)
3702 – Reimbursive Travel Allowance (Assessed on assessment)
3703 – Reimbursive Travel Allowance (non-taxable)
3713 – Other Allowances – Taxable (cell phone, computer, tool, entertainment, other earnings subject to PAYE)
3810 – Fringe Benefit – Company contribution to medical aid (amount should agree to code 4474)

The total of the income received is shown as Gross Employment Income (Taxable) – Code 3699 and

Non-Taxable Income – Code 3696, should any non-taxable earnings have been received.

Deductions/Contributions/Information

Employee salary deductions and any contributions made by the company will be displayed under this heading. Some examples of common codes are listed below:

4001 – Total pension fund contributions paid or deemed paid by employee (includes both employee and employer contribution)
4003 – Total provident fund contributions paid or deemed paid by employee (includes both employee and employer contribution)
4005 – Medical aid contributions paid and deemed to be paid by the employee (includes both employee and employer contribution) This also includes contributions towards a private medical aid.
4006 – Total retirement annuity fund contributions paid and deemed paid by employee
4472 – Employer’s pension fund contributions paid for the benefit of the employee
4473 – Employer’s provident fund contributions paid for the benefit of the employee
4474 – Employer’s medical scheme contributions paid for the benefit of the employee
4582 – Value of “remuneration” included in allowances and benefits (travel related)
4497 – Reflects the total deductions and contributions for the period

Tax Credits and/or Employer’s/Employee Contributions

4102 – PAYE (Indicates the amount of PAYE that was deducted from the employee and already paid during the period)
4116 – Medical scheme fees tax credit (indicates the total amount of the medical scheme fee tax credits already received during the period)

In summary, the IRP5 contains all the necessary information that SARS requires in order to calculate the tax liability on your remuneration received for the tax year. Please note should a re-submission of the EMP501 and IRP5/IT3(a) submission need to be done, the employee can then request their ITR12 via eFiling again to ensure that the latest version of the IRP5/IT3(a) is pre-populated on the ITR12.

The following deadlines apply to ITR12 submissions which must be made for the 2023 tax ﬁling season:

eFiling or electronic ﬁling at SARS branches - 23rd October 2023 (Non-provisional)
eFiling submission – 24th January 2023 (Provisional taxpayers only)

SARS has also introduced an auto-assessment. In these cases, SARS will use the information that has been pre-populated by third parties and loaded onto the ITR12, to make an assessment of the tax status of the return. Should the individual agree with the assessment, nothing further is required to be done. Should the individual not agree to the assessment, a revision can be made and submitted before the 23 October 2023.

Please make sure to submit your ITR12 before these deadline dates to ensure that SARS does not raise penalties or interest on any late submissions.

Should you have any further enquires or need any assistance in completing your submission, please feel free to contact our personal income tax department.

Michelle van Coppenhagen

Associate | Outsourced Accounting and Payroll, Johannesburg