SARS Warns South African Employees Who Miss Tax Return Deadline About Admin Penalties

• SARS can charge employees a fixed monthly penalty for failing to submit outstanding income tax returns on time
• The administrative penalty can range from R250 to R16,000 per month for up to 35 months, depending on taxable income
• Taxpayers who disagree with the penalty have options to dispute it, but must still submit outstanding returns to stop further charges

The South African Revenue Service has issued a firm warning to employees who miss their tax return deadlines, spelling out exactly what non-compliance could cost them.

SARS can levy an administrative penalty under section 210 of the Tax Administration Act against any natural person who failed to submit an income tax return for years of assessment from 2007 onwards. This rule has been in effect since 1 December 2022.

What the penalty could cost you

The monthly fixed-amount penalty is tied to a taxpayer's taxable income and ranges from R250 to R16,000. What makes it particularly costly is that it recurs every month the return remains outstanding, for a maximum of 35 months. Each recurring penalty carries its own unique transaction number.

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Companies face similar consequences where SARS has issued a final demand and the business failed to submit the outstanding return within 21 business days. From 4 May 2026, trusts with outstanding income tax returns (ITR12T) for tax periods from 2024 onwards also fall under this penalty regime.

SARS advises that even if a taxpayer disagrees with the penalty, submitting the outstanding return immediately is the best way to prevent further charges from piling up.

How to dispute or pay the penalty

According to the report, taxpayers who believe a penalty was unfairly imposed can submit a Request for Remission, providing reasons for the non-compliance. This can be done via eFiling or at a SARS branch by appointment. If SARS rejects or partially allows the remission, the taxpayer can still lodge a formal objection and, if needed, take the matter to appeal.

Importantly, taxpayers cannot skip straight to the objections process. The Request for Remission must be submitted and considered first.

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For those who owe the penalty and cannot pay it in one lump sum, SARS allows a deferred payment arrangement. Taxpayers who fail to pay at all risk having SARS appoint an agent, such as their employer, to collect the debt directly on its behalf.

The Penalty Statement of Account is no longer automatically sent with the penalty assessment notice. Taxpayers can request one via eFiling, by calling the SARS Contact Centre on 0800 00 7277, or by visiting a branch with a prior appointment.

More on SARS and South African taxpayers

• Briefly News reported that SARS has introduced a mandatory online customs declaration system that South Africans and other travellers must complete before crossing the country's borders.
• A South African financial advisor was stunned after SARS blocked his R323,000 tax refund, with the reason only becoming clear after he visited a branch.
• South Africans debated a proposal for SARS to deduct NSFAS debt from graduates' salaries, but many questioned whether the plan would be fair.

Source: Briefly News