Life is certainly getting faster and faster, we try to fit more into each day and often things slip by the wayside. Unfortunately sometimes these are important issues which we put off like registering for tax or meeting our other tax obligations. It is understandable when often these processes aren’t easily understood however ignoring these makes you liable to pay penalties to SARS.

SARS penalty for non-compliant taxpayers

In an effort to combat non-compliant taxpayers, SARS announced and implemented a range of penalties which started from January 2009.

Situations that incur penalties include:

  • Failure to register as a taxpayer
  • Failure to inform SARS of a change of address and other personal particulars
  • Failure to submit Income Tax returns (ITR12) and other documents.

If you are in non-compliance with any of the situations above, you will be liable for recurring monthly penalties until you have rectified your non-compliance. The penalty you will need to pay is determined by your taxable income or assessed loss. See the table below:

Taxable income or assessed loss for preceding year             Penalty
Assessed loss


R0 – R250 000


R250 001 – R500 000


R500 001 – R1000 000

R1 000

R1 000 001 – R5 000 000

 R2 000

R5 000 001 – R10 000 000

R4 000

R10 000 001 – R50 000 000

 R8 000

Above R50 000 000

 R16 000



SARS Penalty for employers

SARS has also clamped down on employers for transgressions including:

  • Non submission of an Employer Reconciliation Declaration (EMP501) by the due dates (interim and annual)
  • Failure to submit Employee Income Tax Certificates [IRP5/IT3(a)] (i.e. Missing IRP5/IT3(a)s)
  • Submission of incorrect, incomplete or inaccurate data in relation to the IRP5/IT3(a)s, even where the EMP501 has been submitted on time.

The non-compliances mentioned above will be subject to a non-recurring percentage based penalty. According to SARS, this penalty is equal to 10% of:

  • The amount of Employees’ Tax that an employer fails to pay as and when required under the Act
  • The total amount of Employees’ Tax deducted or withheld, or that should have been deducted or withheld, by an employer from the remuneration of employees, where the employer fails to submit an IRP5/IT3(a) as and when required under the Act.

Once the non-compliance has been remedied, the penalty will be adjusted. This adjustment is calculated on a percentage sliding scale.

To reduce the risk of incurring these penalties, contact Brett from Dirmeik Consulting today. The best method of avoiding penalties is to make sure you are registered and submit your returns on time and in a proper manner. By hiring a knowledgeable accountant and tax consultant, you can concentrate on what you do best and we take care of the rest.

Call Cape Town Accountant Brett on 021 421 4444.