Monthly payroll tax return

What it means

The monthly payroll tax return reports the income tax advances withheld from employees. It carries aggregate totals for all staff rather than data by name.

It is filed electronically by the end of the month following payment. The withheld advance is remitted to the tax administration within the same period.

The return should not be confused with the annual employer tax report. The return is monthly and aggregate, the report annual and broken down by employee. The annual figures in the report should therefore add up from the monthly returns, and when they do not, a correction went missing somewhere along the way.

How it works in practice

The return also shows the child tax bonus paid out, which the employer offsets against advances due. Where the bonus exceeds the advances, a refund claim arises.

Payroll sheets for the month are the source. If payroll is corrected later, the return is corrected too, normally by an amended or supplementary filing.

In payroll we file the return on the same day the advance payment leaves, and check its total against the payment and against the balance on the taxpayer’s personal account. Otherwise a gap between filing and payment shows up as arrears or an overpayment that nobody can explain a few months later.

What to watch out for

The return is due even in a month with no wages paid, then with nil values. Failing to file is a breach carrying a penalty although there was nothing to remit.

The outcome of the annual tax reconciliation goes into the return for the month in which the overpayment was refunded or the shortfall withheld. Forget it and the amount remitted no longer matches the return, and the mismatch surfaces only with the annual report, when several months have to be corrected at once.