No Hiding from Payroll Non-Compliance: Why the Voluntary Disclosure Programme Is Your Best Defence

In the complex world of payroll, many employers have historically taken a head-in-the-sand approach, particularly when it comes to the taxation of employee benefits. If you are not 100% confident that every fringe benefit in your payroll is correctly taxed, now is the time to act, as the South African Revenue Service (SARS) is clamping down on all forms of tax non-compliance.

Whether through misunderstanding, oversight, or deliberate omission, certain fringe benefits may have been left off the radar of PAYE, UIF, and Skills Development Levy (SDL) calculations for years. The uncomfortable truth is that the longer non-compliance goes unaddressed, the greater the financial and reputational risks for the employer.

SARS Is Watching and Waiting

SARS has significantly enhanced its audit capabilities in recent years, leveraging third-party data, system integrations, and AI-powered risk analysis to detect non-compliance. A once-silent oversight by employers can quickly become a red-flag trigger for a payroll audit, especially when benefits like travel allowances, fuel cards, or company cars are involved.

When SARS does come knocking, the implications are far more severe than simply “correcting an error.” Penalties of up to 200% may be imposed in cases of intentional tax evasion, along with interest accruing from the first point of non-compliance and not just from when the issue was discovered.

Read more more on our most recent article "No Hiding from Payroll Non-Compliance: Why the Voluntary Disclosure Programme Is Your Best Defence".