Deceased Employee – responsibility of the Employer

The Fourth Schedule to the Income Tax Act 58 of 1962, (“the Fourth Schedule”), places various obligations on an employer in respect of the deduction or withholding of employees’ tax and the administrative requirements related thereto.

What obligation rests on the employer?

Paragraph 13(2)(b) of the Fourth Schedule provides that an employer, who ceased to be an employer in relation to an employee, e.g. when an employee dies, is required to deliver an employees’ tax certificate within 14 days of the date on which employment ceased to the former employee (or to such deceased employee’s representative).

The employer must therefore deliver an employees’ tax certificate within 14 days after the employee passed away. The employer is required to provide the employees’ tax certificate to the executor acting as the representative taxpayer of the deceased employee.

An employer must, in the case of an employee’s death, provide the employees’ tax certificate even if the EMP501 reconciliation is not yet submitted. This is an exception to the provisions of paragraph 14(5) of the Fourth Schedule.

What obligation rests on the executor?

The executor, as the representative taxpayer, is responsible to finalise the financial and tax affairs of the deceased employee efficiently and without any unnecessary delays. The executor should therefore ensure that the necessary documentation, like the employees’ tax certificate is obtained from the deceased’s employer.

For more information, visit the SARS Estates webpage here.

14/01/2022