SARS Changes How It Collects Unpaid Tax Directly From SA Employee Salaries
- The South African Revenue Service revised its AA88 third-party recovery process, giving employers more time to process garnishment orders
- SARS clarified that the amount shown on a recovery instruction may not reflect an employee's total tax debt, as deductions are often made in instalments
- Employers must now update staff tax statuses on official digital platforms and transfer withheld funds using designated payment tracking numbers
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The South African Revenue Service (SARS) has updated the way it recovers unpaid taxes directly from workers' salaries, introducing changes that give employers more breathing room when processing deduction orders.
The system at the centre of this update is known as the AA88 process, a legal mechanism that allows SARS to instruct an employer to act as a collection agent. When an employee falls behind on personal income tax or racks up administrative penalties, SARS can require the employer to deduct the outstanding amount from wages and pay it over to the revenue service on the worker's behalf.
More time for payroll teams
One of the biggest changes under the revised system is the extension of lead times for payroll departments. Previously, short notice periods made it difficult for payroll managers to incorporate sudden deduction orders into their existing salary runs. The updated rollout addresses this by giving companies more time before their wage cut-off dates to process the relevant instructions.
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The changes also reduce the number of duplicate notifications and unexpected system cancellations that payroll and human resources teams had previously dealt with, simplifying what had become a frustrating administrative process for many businesses.
SARS also clarified an important point: the figure on any individual recovery instruction does not always represent the full amount an employee owes. The revenue authority frequently requests staggered deductions rather than recovering the entire outstanding balance in a single payment.
What employers are required to do
South African businesses must fulfil specific obligations through official electronic filing platforms to stay compliant. Payroll and HR personnel are required to log onto digital portals, review the list of flagged employees, and update each record to reflect the worker's current status. This includes indicating whether the person is still employed, has left the company, has an estate matter in progress, or needs an affordability review.
Once those records are confirmed, employers must withhold the specified amounts from the relevant employees' pay and remit the funds to SARS using designated payment reference numbers. Companies are also required to keep their payroll software synchronised with national tax databases so that any updates, adjustments, or cancellations are captured in real time.
Failure to comply with these requirements could expose businesses to legal penalties.
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More on SARS and South African tax
- Briefly News recently reported that SARS collected more than R992 billion in net revenue during the first half of the 2026/27 financial year, exceeding budget projections.
- The Durban High Court authorised SARS to sell five Sandown properties linked to Shauwn Mkhize over a claimed tax debt of about R125.9 million.
- Tamia Mpisane was named in SARS court papers linked to Shauwn Mkhize’s tax case, prompting questions about her marriage to Andile Mpisane in community of property.
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Source: Briefly News
