• Effective date (period for which this relief is available) – 1 April 2020 to 31 July 2020. 
  • Compliance – tax returns may not be in arrears and there must be no outstanding debt with SARS (unless there is some arrangement with SARS or the debt is less than R100.

Under the COVID-19 relief provisions: 

  • Qualifying small to medium size businesses may defer payment of 20% of the PAYE liability arising during the period 1 April 2020 to 31 July 2020 without SARS imposing administrative penalties and interest on the late (short) payment. 
  • The aggregate PAYE liability deferred will have to be paid to SARS in equal instalments over the six-month period from 1 August 2020 (i.e. the first payment is due on 7 September 2020 and the last by 5 February 2021). 

A qualifying small to medium size business in this case is one in which the annual turnover does not exceed R50 million per annum for the 2020/2021 year. 

Example: deferral of PAYE liability for four months (using assumed PAYE figures)

Payroll MonthEMP201 –
PAYE liability
Less 20% 
Deferral (deferred total)
80% payableSubmit EMP201
and make payment by
April 2020R 150 000R 30 000R 120 0007 May 2020
May 2020R 145 000R 29 000R 116 0005 June 2020
June 2020R 155 000R 31 000R 124 0007 July 2020
July 2020R 150 000R 30 000R 120 0007 August 2020
Cash flow benefitR 120 000

Repayment of deferred total of R120 000 (6 monthly instalments)

Payroll MonthAmount payableSubmit and make payment by
August 2020R 20 0007 September 2020
September 2020R 20 0005 October 2020
October 2020R 20 0006 November 2020
November 2020R 20 0007 December 2020
December 2020R 20 0007 January 2021
January 2020R 20 0005 February 2021
Total deferred PAYE repaidR 120 000

Please note: interest and penalties will apply if the employer has understated the PAYE liability for any of the four months.


In terms of Paragraph 2 of the Fourth Schedule to the Income Tax Act, 1962 (the Act) a resident employer or representative employer (in cases where the employer is non-resident) must deduct employees’ tax (PAYE) from remuneration paid to its employees. 

In addition, the employer or representative employer must submit a return and pay over the PAYE withheld to the South African Revenue Service (SARS) within seven days after the end of the month for which the PAYE was deducted. 

Administrative penalties may be imposed in terms of paragraph 6 of the Fourth Schedule to the Income Tax Act for late payment of PAYE.

Source of the legislation:

  • Disaster Management Tax Relief Bill, and
  • Disaster Management Tax Relief Administration Bill