When a SARS payment counts as on time
When SARS treats a payment as received, how bank cut-off times can make a payment late, and the penalties for late VAT and PAYE payments.
By Achekam · · 5 min read · For Running a business businesses in South Africa
It is the afternoon of the due date. The VAT return is filed, the amount is right, and the finance manager releases the payment from the business's banking app with time to spare, or so she thinks. A few weeks later SARS's statement shows a penalty for late payment.
Nothing was wrong with the amount or the reference. The problem was the clock. SARS measures "on time" by when the money arrives in its own account, not by when you pressed the button, and the banks in between have cut-off times that decide which day a payment actually moves. This article explains SARS's rule, how cut-offs and eFiling authorisation fit in, what lateness costs, and what Achekam records and does not do.
Received in SARS's account, not sent from yours
SARS's payment rules say SARS only recognises a payment once it is received into the SARS bank account, and a payment received after the due date is a late payment. The same rules draw the practical conclusion: taxpayers must pay before their bank's cut-off time.
The distinction between sent and received is the whole point. Your bank statement may show the payment leaving on the due date. If it reaches SARS the next business day, SARS's records show it arriving after the due date, and that is the date that counts.
SARS's guide to its payment rules explains when a payment is recognised, how eFiling payments are authorised and why payments should be made before the bank's cut-off, and it is the reference to give anyone in the business who releases tax payments.
Bank cut-off times and the due date
Every bank sets a time of day after which a payment instruction is processed on the next business day. The exact time depends on your bank and the type of payment, so find out what yours is.
Then work backwards from SARS's due dates. For VAT, SARS says returns and payments are due on or before the 25th day of the month after the tax period ends, or on the last business day of that month for vendors who file and pay through eFiling. Where the 25th is not a business day, the deadline moves to the preceding business day. Payroll taxes run to a different calendar, with the EMP201 due early in the month.
A habit that avoids most late payments: treat the business day before the due date as your own deadline for releasing the payment. That leaves a day for the bank, for a missed authorisation, or for a public holiday nobody noticed.
eFiling payments are irrevocable once approved
Paying through eFiling adds a step that is easy to forget. SARS's payment rules say eFiling payments must be authorised by the payer on their banking product before they take effect, and are irrevocable once approved.
Two timing traps follow:
- The payment is not made until it is authorised. Initiating a payment on eFiling and leaving the authorisation for later means no money has moved. If the person who authorises is away on the due date, the payment is late.
- Once approved, it cannot be pulled back. That is a reason to check carefully before approving, not a reason to approve at the last minute.
SARS also notes that certain banks cannot process eFiling payments over R5 million, so a large payment may need to be split into several. Each part has to be authorised, and each needs to clear before the cut-off.
What a late payment costs
The penalties are significant, and they apply even when the payment was only a day behind.
VAT. SARS's VAT 404 guide says a vendor that fails to pay VAT within the period allowed is charged a penalty of 10% of the unpaid tax, in addition to any understatement penalty included in an assessment. The penalty rules for VAT are covered in more depth in the VAT late payment penalty.
PAYE, SDL and UIF. SARS's employer guide says a penalty of 10%, in addition to interest at the prescribed rate, is imposed on late or outstanding payments of employees' tax, SDL or UIF contributions. The same guide records that payments are allocated first to the penalty, then to interest, and only then to the tax, so a late month can leave tax outstanding even after you pay the original amount.
These figures are as stated at the time of writing. The point does not change with the percentages: a payment that arrives a day late costs far more than the effort of releasing it a day early.
A due-date checklist
- Know your bank's cut-off time for the payment type you use.
- Release VAT and payroll tax payments by the business day before the due date.
- For eFiling payments, confirm the authoriser is available and has approved.
- Check the next morning that the payment has left your account.
- Keep proof of the time and date of release with the return.
Marking a payment in Achekam records it but moves no money
In Achekam, recording a payment and making it are separate acts. For payroll, each approved run has a payment schedule you can download as a CSV, and marking it paid only records the fact: Achekam moves no money. A tax payment to SARS likewise happens when a person releases it at the bank or authorises it through eFiling, and only then.
That makes it important that "paid" in the books reflects the bank, not intention. When the payment appears on the bank statement, match it. In Achekam, bank lines are matched by suggestion and a person accepts each match; a line that is not yet in the books becomes a suggested journal a person approves; and a reconciliation completes only when no difference remains or every leftover line is explained. A tax payment that has been marked paid but has no matching bank line is the one to chase that same day. For the reference and beneficiary side of the payment, see paying SARS by EFT with the right reference.
Move your own deadline forward
Write your own due dates one business day ahead of SARS's, put the name of the authoriser next to each, and confirm on the bank statement the next morning. It costs nothing and removes the most common cause of a penalty on a tax that was, in every other respect, paid correctly.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
