Tax and SARS knowledge base
Does an employer need a separate PAYE branch registration?
Does a company need a separate PAYE branch registration for another payroll location?
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Direct answer
No, a company does not automatically need a separate PAYE registration simply because it opens another payroll location. SARS provides for an employer to apply to register branches separately. Once separate registration has been granted, each branch is deemed to be a separate employer for employees' tax purposes. SARS says the application is made on an EMP102 form.
Separate registration is an administration choice with consequences. It changes how payroll responsibilities, returns, employee transfers and certificates are managed. Do not begin treating a branch as a separate employer before the relevant SARS registration has been completed.
What this means in practice
An employer may have one company with offices, factories, stores or projects in different locations. A different address or cost centre does not by itself create a separately registered PAYE branch. The question is whether the business has applied for and obtained separate branch treatment from SARS.
Where a branch is separately registered, payroll administration must follow through. SARS says an employee who transfers between separately registered branches must receive an IRP5 or IT3(a) from the original branch for the period from 1 March, or commencement if later, to the day before transfer. The receiving branch then issues a second certificate for the period from the transfer date to the end of February, or earlier termination.
That result can surprise employers who think the employee has had only one job. It is why HR and payroll should agree the transfer date and branch identifier before the move is processed.
Step-by-step
- Decide whether separate registration is actually needed. Map the payroll, payroll-tax payments, recordkeeping and responsible person for each location. If the company simply needs management reporting by site, a separate SARS branch registration may not be necessary.
- Define the intended branch structure. Make sure the legal employer, location, payroll team and employee populations are clearly identified. Avoid using temporary project names or informal department labels that cannot be reconciled to SARS records.
- Apply through the SARS process. SARS's current employer guide specifies EMP102 for an application to register branches separately. Check the SARS registration page and the current submission channel before sending documents, because process requirements can change.
- Wait for the registration outcome. Keep SARS acknowledgement and the assigned registration details. Do not issue separate EMP201s or tax certificates as though the branch is a separate employer until this is confirmed.
- Configure payroll after registration. Allocate employees, payment duties, records and reconciliation responsibilities to the correct registered branch. Test that the payroll system can generate the separate certificate history needed for an employee transfer.
- Handle transfers carefully. Record the last working day at the old branch and the first day at the new branch. The former branch should issue a certificate through the day before transfer, and the new branch should issue the certificate from transfer onwards. Reconcile both records before EMP501 submission.
Documents and records to keep
Keep the EMP102, SARS correspondence, branch registration confirmation, internal payroll-responsibility map and employee allocation list. For each transfer, retain a signed HR transfer record, the effective date, old and new branch details, payroll reports and the certificates issued.
Keep the normal employee remuneration, PAYE, UIF and other payroll records required for the relevant employer. SARS says employer records must generally be kept for five years. These documents will also help explain two certificates for one individual in a single tax year.
Important limits and exceptions
This is not an initial PAYE-registration guide. A business must still register as an employer when it meets the relevant employer-registration obligation. Separate branch registration is additional to that and should not be confused with opening another bank account, office or payroll cost centre.
The transfer-certificate rule described here applies where the branches are separately registered. It should not be applied automatically to an internal move between departments that remain under one PAYE registration. Do not let a payroll system generate an unintended termination record merely because an employee changes location.
When to get tailored advice
Obtain advice where a business is restructuring, moving a workforce between group companies, outsourcing payroll or changing its registered representative. Care is also needed where a branch has different liabilities, a large number of mid-year transfers or historical payroll errors.
TaxProof can help organise the EMP102 support, branch payroll records and employee-transfer evidence. We cannot decide the employer's legal structure or submit a registration as your authorised representative without the appropriate authority.