Insights
How to prepare for a payroll audit
Whether the reviewer is your external auditor or SARS, they test the same things: does the data support the payments, and do the payments support the declarations?
Assemble these first
- Payroll registers for every period under review
- EMP201 declarations with proof of payment
- EMP501 reconciliations and submitted tax certificates
- Employment contracts and package change authorisations for a sample of employees
- Third-party schedules and proof of payment to each beneficiary
- The payroll journal and general ledger reconciliations
What reviewers test
Existence of employees, accuracy of calculation, authorisation of changes, completeness of statutory declarations, and whether the person capturing changes is the same person releasing payments.
Fix the predictable findings
Duplicate banking details, terminated employees still active, allowances taxed incorrectly, and unreconciled control accounts appear in almost every review. An independent payroll audit finds them before someone else does.
Frequently asked questions
How far back does a payroll audit go?
It depends on the trigger. An annual external audit usually covers the financial year, while a SARS review can extend across multiple tax years within the prescribed periods.
What is the fastest way to fail a payroll audit?
Being unable to reconcile declarations to payments, or being unable to produce authorisation for salary and banking changes.
Can we run our own payroll audit first?
Yes, and it is worth doing. An internal or independent review lets you correct findings on your own timeline rather than under a deadline.
Patuza runs independent payroll audits and gives you a rated fix list.
Book a consultationRelated services
- Payroll audits →
Independent payroll audits covering data integrity, statutory accuracy, controls and risk.
- Payroll compliance →
PAYE, UIF, SDL, EMP201, EMP501 and IRP5 compliance managed end to end for SARS.
- EMP201 & EMP501 reconciliation →
Monthly EMP201 declarations reconciled to bi-annual EMP501 submissions and IRP5 certificates.
Related topics
Related insights
- Payroll reconciliation explained →
What payroll reconciliation means, what it proves and how to run it every month.
- Lawful payroll deductions →
What an employer may and may not deduct from an employee's pay.