SARS penalties: where they come from, how to check them, and when to ask for remission

SARS charges a business three kinds of penalty: a fixed monthly amount for the returns it has listed, which today means late income tax returns; 10% of any tax paid late; and an understatement penalty when a return gets the tax wrong. Interest runs on top of tax paid late. You can ask SARS to remit a penalty, but the request has to reach it by the payment date on the penalty notice.

This guide covers where each penalty comes from, how to find the ones on your account, and how remission and objection work. The amounts and rules are from the Tax Administration Act and SARS’s own penalty pages.

What penalties can SARS charge a business?

When does SARS charge the fixed monthly penalty?

Only for the failures the Commissioner has listed in a public notice. For most businesses that currently means not submitting an income tax return (SARS also lists a few specialised returns, such as third-party data returns): a company after SARS has sent a final demand and 21 business days have passed, an individual (a sole proprietor included) with a return outstanding, and, since a notice of 27 March 2026, a trust after a final demand. A late VAT return draws no submission penalty at present, and a late EMP501 has a penalty of its own, covered in the EMP501 guide.

The amount depends on the previous year’s taxable income:

A listed company, or one with gross receipts above R500 million, pays at least R8,000. The penalty is charged again for every month the return stays outstanding, for up to 35 months, and it bears interest of its own.

What does SARS charge for paying tax late?

10% of the tax paid late, for VAT, PAYE and provisional tax alike, plus interest at the prescribed rate: 10.50% a year as of October 2026, in force since 1 September after 10.25% from March to August. It follows the rate set under the PFMA, with a lag, so check SARS’s interest table before you work out a figure. A payment counts only when it reaches SARS’s bank account, and a due date that falls on a weekend or public holiday moves to the business day before, not after.

What is an understatement penalty?

A penalty on tax a return left out or got wrong. Since 1 April 2026 it applies only where the understatement involves one of the behaviours the Act lists, and the rate depends on which:

A substantial understatement is one above the greater of 5% of the correct tax or R1 million. A repeat case within five years, or obstruction, pushes the rates up to 200%; a voluntary disclosure brings them down. Since April 2026 SARS must also remit a substantial-understatement penalty caused by a genuine, inadvertent error. SARS has to prove the behaviour, and an understatement penalty is disputed by objection, not by asking for remission.

How do I check if I have a SARS penalty?

Every penalty comes with a notice that states what it’s for, the amount and the date to pay: the AP34 for income tax, and the EMP301 for the penalty on a late EMP501, both under SARS Correspondence on eFiling. A company gets a final demand first, and the later monthly penalties are flagged by email or SMS rather than a fresh notice. To see them all:

• Request the penalty statement. It no longer comes with the notice; ask for it on eFiling (SARS Correspondence, Request Admin Penalty SOA), at the contact centre or at a branch. The administrative penalty has to be activated as a tax type on your eFiling profile first.
• Read the statements of account. eFiling has statements for VAT and for assessed tax, and the income tax statement shows penalties and interest with the balance. An employer on e@syFile can request its PAYE statement there.

Can I get a SARS penalty waived?

You can ask SARS to remit it with a Request for Remission (the RFR01) on eFiling or at a branch, explaining what stopped you complying, with supporting documents. Two rules matter most: the request is due by the payment date on the penalty notice, and SARS can’t collect the penalty while it’s being decided or for 21 business days after. SARS’s remission page sets out the grounds:

• First incidence, meaning no penalty assessment in the previous 36 months. SARS may remit up to R2,000 of a fixed penalty for a first incidence, or where you were less than five business days late, if you had reasonable grounds and have since fixed it. A late-payment penalty can be remitted for a first incidence or where it is under R2,000, if you had reasonable grounds and have paid the tax.
• Exceptional circumstances. SARS must remit where something listed in the Act made compliance impossible: a disaster, a civil disturbance or service disruption, serious illness or accident, serious emotional or mental distress, certain errors or delays by SARS, serious financial hardship, or anything of similar seriousness.

File the outstanding return or pay the tax either way: remission doesn’t stop the next month’s penalty. Interest is remitted only in narrower circumstances.

What if SARS refuses to remit the penalty?

Object to the refusal within 80 business days, then appeal within 30 business days of the objection outcome if you need to. The request for remission has to come first: on eFiling the objection opens only once SARS has decided it. A dispute about interest on late VAT or PAYE goes no further than the remission request, and interest on late UIF and SDL can’t be disputed at all. A penalty dispute isn’t something the Tax Ombud can review, though it can look at how SARS handled your case once SARS’s own complaints process has run.

How Komply shows your penalty exposure

Komply works out what a late return is costing you before SARS’s notice arrives, on every plan:

1. A late VAT201, EMP201 or IRP6 shows its 10% late-payment penalty and the interest so far at the rate in force on the day. For an EMP201 or IRP6 the interest is an estimate.
2. A late annual EMP501 shows 1% of the year’s PAYE for each month it’s outstanding, up to 10%. An interim EMP501 or an ITR14 shows the penalty as a dash, with the reason, rather than a guess.
3. The overview adds up the penalty exposure across your overdue returns, so the cost of leaving them is in one line.

What Komply doesn’t do: it doesn’t model the fixed monthly penalty or understatement penalties, it can’t see the penalties SARS has actually charged, and it doesn’t file remission requests or objections. The SARS guide covers each return and its due date, and the free cost of non-compliance calculator puts a rand figure on tax paid late.

Frequently asked questions

Is there a penalty for a late VAT return?

Not for submitting it late, at present. Paying VAT late costs 10% of the late amount, plus interest.

How much is the SARS late filing penalty for a company?

R250 to R16,000 a month, depending on the previous year’s taxable income, after a final demand and 21 business days. A listed company, or one with receipts above R500 million, pays at least R8,000.

How long do I have to ask for remission?

Until the payment date on the penalty notice.

Can I object to a penalty straight away?

Not to an administrative penalty: ask for remission first, then object to the refusal. An understatement penalty is disputed by objection directly.