A South African employer preparing a lump-sum payment needs a clear route from the approved payment decision to the SARS tax instruction and employee certificate. This guide focuses on that payroll handoff: preparing an IRP3(a) request, checking access, following its outcome and reconciling the final payment.
1. Identify the payment and the responsible applicant
SARS's tax and retrenchment explanation says the employer applies for a directive before paying a qualifying severance lump sum. SARS determines the withholding, and the employer pays the benefit after that deduction. A signed settlement or estimated net amount therefore should not be treated as the tax instruction.
Use the payslip generator to organise a separate employee-facing payment record once the figures have been checked. It cannot obtain a SARS directive or produce proof of official filing. The South Africa EMP501 reconciliation guide explains the broader employer reporting workflow, while the payslip explanation guide helps communicate gross amounts, deductions and net pay.
Write a short scope note before entering anything into eFiling. Identify the paying entity, the employee, the approved gross components and the person accountable for classification. Keep a payroll payment distinct from any separate retirement-fund payment. That practical distinction prevents a file from being handed to the wrong team simply because both payments arise when employment ends.
2. Separate the payment components before estimating tax
The SARS employer guide for 2027 distinguishes normal termination payments from qualifying severance benefits. It describes normal termination lump sums as annual payments for employees' tax purposes. A payment's label in a settlement is not enough to choose its payroll treatment.
Prepare a component schedule using the employer's actual approved documents. Give each component its own description, gross value, authority for payment and classification decision. A reviewer should be able to trace the total to the signed approval without assuming that everything belongs in the same tax category.
The current IRP3(a) completion PDF instructs employers to keep leave and notice payments separate from the specified severance-benefit applications. It also distinguishes voluntary and involuntary retrenchment reasons. Confirm the reason against the underlying facts and the current guide with the responsible tax adviser. Do not select a reason merely because it appears to produce a preferable estimate.
Use the component schedule as an approval document as well as a calculation aid. Record unresolved questions against individual lines. A disputed classification should remain visible until the authorised reviewer resolves it, rather than being hidden inside one combined figure.
3. Treat prior lump sums as a separate tax-history question
SARS's retirement lump-sum rates page explains that severance taxation uses aggregation with relevant earlier benefits. It lists different historical starting dates for retirement benefits, withdrawals and severance benefits. The current payment cannot safely be assessed as though the employee's previous benefit history were always empty.
Ask the employee to provide relevant information through the employer's approved secure channel, and have the adviser reconcile uncertainties. Avoid promising a fresh tax-free allowance from a headline or calculator. The official determination and the facts of the payment remain the basis for withholding.
Keep any preliminary calculation clearly marked as an estimate. Record which information was available, who prepared it and what remains to be checked. An estimate used during discussions should not silently become the amount loaded into payroll after a directive arrives.
4. Confirm eFiling access before the payment deadline
The current eFiling functionality guide separates the organisation portfolio from individual and practitioner portfolios. It also distinguishes current directive transactions from historical transactions before April 17, 2026. Check that the authorised operator can reach the correct organisation and request the required form before the payment is approved for processing.
Make access readiness part of the handoff between HR and payroll. Name the operator and a backup contact. Confirm the paying organisation and the relevant payroll reference together. Keep access administration with authorised people, and resolve missing roles through the official process instead of sharing another person's login.
An access check is different from submitting an application. Record it as such in the working paper. If the form cannot be requested, give the issue an owner and next review date. Tell the payment approver which step is blocked and what evidence will show that it has been resolved.
5. Prepare a compact, private application packet
SARS's IRP3(a) completion webpage explains the taxpayer and employer particulars, payment reason, accrual date and remuneration fields. Use the current form and its instructions for the actual mandatory fields. The following packet is an internal preparation checklist, not an official list of attachments required in every case.
- The approved payment decision and component schedule.
- The employee details checked against the employer's verified records.
- The correct paying-entity and payroll references.
- The documented classification and reason for the request.
- The accrual-date decision and supporting explanation.
- The remuneration working paper used for the requested field.
- The preparer, reviewer and secure location of supporting records.
Resolve a disagreement between records before capture. Keep a brief correction note explaining the discrepancy and the verified replacement. Do not invent a tax number, use an unconfirmed spelling or change a date simply to pass validation. SARS's income-tax registration guidance provides the official route where registration is required.
These records contain personal and financial information. Keep them in access-controlled employer storage. Share only what the authorised recipient needs through the approved channel. Avoid putting identity numbers, salary details or complete documents into public links, open chat groups or a general-purpose content tool.
6. Review the captured request against the approved packet
Use a second review before submission as a business control. Compare the captured gross amount and component treatment to the signed schedule, rather than checking only whether every field is populated. Then compare the paying entity, employee reference, reason and accrual date to the working papers.
Give dates their own review. Record the decision behind the accrual date and ask the adviser to resolve it where the facts are uncertain. A payment date, approval date and date on which an entitlement arises can serve different purposes. Do not overwrite one with another simply because payroll has a convenient date available.
Preserve the version that was actually submitted and its reference. If the proposed payment changes after review, assess whether the request is still accurate before proceeding. Keep the previous approval and the change decision together so the reviewer can reconstruct what happened.
7. Track the outcome without confusing it with submission
Maintain a small status register for the request. Useful internal stages are prepared, reviewed, submitted, awaiting outcome, correction required, final instruction checked and payroll reconciled. These are suggested employer tracking labels; use the actual SARS status when recording the official outcome.
A submission reference proves a submission. It does not prove that the final withholding instruction was received or that the payment was processed correctly. Keep those evidence fields separate. Where the operator sees a rejection or a request for information, preserve the exact public-system message in the private case file and assign the follow-up.
Before submitting another request, establish what happened to the first one. Escalate uncertainty with its reference and supporting records. Repeated submissions without a clear record make it harder to identify which outcome payroll should use.
8. Reconcile the final instruction to payroll and payment
When the final instruction is available, compare it with the approved payment packet. Check the employee, paying entity, payment amount and relevant instruction details. Resolve a mismatch before treating the file as ready for payroll. Keep the final document linked to the request reference and the review decision.
For the payment working paper, use the straightforward relationship net amount = approved gross amount minus the instructed tax and any separately verified deductions. This is a reconciliation identity, not a substitute tax formula. Other deductions need their own authority and treatment; they should not be blended into the directive's tax amount.
After processing, compare the payroll result with the payment approval and actual payment record. Investigate a difference rather than changing the working paper to make it agree. Keep any unrelated ordinary-payroll components clearly identifiable in the employee explanation.
9. Carry the evidence into the employee certificate review
The 2027 employer guide identifies source code 3901 for qualifying severance benefits and code 4115 for the associated tax. Treat those as a factual example of the relationship between a payment category and its reporting codes, not a universal mapping for every termination payment. Check the exact certificate treatment against the directive and current payroll reporting specifications.
Give the certificate reviewer the approved schedule, final instruction and processed payroll result together. Ask them to reconcile the reported amounts and references before issuing the employee's certificate. Keep the resulting certificate and its delivery record with the private case evidence.
At employer reconciliation, trace the payment into the relevant payroll totals and reporting records. The SARS PAYE page links the official employer submission and reconciliation guidance. The local payslip record is useful communication, but it is not evidence that the official employer obligation was completed.
10. Close the file only when another reviewer can follow it
Use a short closeout check covering the approval, submitted request, final instruction, payroll, payment and certificate. Record any open issue separately with its owner. A file is easier to review when each stage points to a specific record rather than relying on a general note saying it was handled.
If a correction is required after the final instruction, preserve the original and seek the appropriate official correction or cancellation route. Keep evidence of the request and its outcome. Do not edit the downloaded instruction or assume that changing payroll also changes the SARS record.
Leave the employee with a clear explanation of gross payment, tax and net payment, plus the correct contact for questions. Keep internal uncertainty visible to the responsible reviewer. These controls help the employer complete a coherent payment record without pretending that a checklist determines legal classification.
Frequently asked questions
Can the employee apply for the employer's IRP3(a)?
For the ordinary South African employer workflow covered here, the employer submits the request. Special non-resident employer arrangements have their own SARS guidance and need separate review.
Can a normal PAYE estimate replace the directive?
No. Keep estimates for planning and use the applicable official instruction for the payment. Prior benefit history and classification can affect the result.
Does the payslip generator submit to SARS?
No. It helps organise a payment record. Directive requests, employer reporting and official certificates require the appropriate separate workflow.
Does this guide cover retirement-fund withdrawals or share awards?
No. Those payments have separate forms and rules. This guide focuses on the employer's IRP3(a) preparation and reconciliation process.
Sources, verification dates and limits
The following public primary sources were reviewed on October 4, 2026. No private taxpayer account was accessed and no SARS application was submitted. Portal access and individual eligibility were not tested. Confirm changed instructions and case-specific treatment with SARS or the responsible adviser.
- IRP3(a) and IRP3(s) completion webpage, current form guidance.
- IT-AE-41-G01 completion PDF, revision 11, effective April 17, 2026. SARS says the PDF prevails if it conflicts with its webpage.
- Tax directive functionality on eFiling, including the current organisation and historical-menu arrangements.
- Employer guide for the 2027 tax year, classification and certificate context.
- Retirement lump-sum benefits rates, including the 2027 year and aggregation explanation.
- Tax and retrenchment, employer application and withholding explanation.
- PAYE, official employer reporting links.
- Income-tax registration, official registration channels.