Failure to be 100% ready for the PAYE reconciliation period at the end of May and the first bi-annual reconciliation in August 2010 could result in a penalty of as much as 10% of the company's total payroll, says Marty Santana, an associate tax director at auditing and accounting firm BDO.

The new version of SARS e@syFile will make employers' tax-filing process easier in future, but at present many companies are battling with the practicalities.

Marty's hints and tips for employers are:

• Uploading e@syFile program will overwrite all current data

Before uploading the new e@syFile, back up the previous e@syFile and data file. When you have uploaded current data, the demographic details of employees will be available and you may need only to update current information and financial information.

• A change in the administrator's password will result in all historical data being lost

The administrator's password is one of three passwords required when using e@syFile for the first time. If the administrator's password is misplaced or if the administrator leaves the company without passing it on to the new administrator, all historical data will need to be reloaded and current data will be lost. Therefore, ensure that passwords are kept in a safe place, such as the company's safe, and that a senior employee is tasked with its safekeeping.

• Log-on failures

Downloads from the payroll onto e@syFile may generate a log-on failure message, which means that there is something wrong with the CSV file being transferred from payroll to e@syFile. To establish the error, review your business requirements specification document on the SARS website/ tax types section/PAYE. Proceed only once the error has been established.

• Error messages and validation problems should be printed and addressed well before the end of the PAYE reconciliation period

It is important that validation error messages are printed so that administrators can go back into their payroll between May and August to correct errors and do PAYE reconciliations in August without delay. Error messages are an indication of a problem that needs to be addressed.

• Don't cancel warning messages

When a warning message is reflected, with the option to accept or reject, don't select cancel. If the cancel option is selected, it may throw out the IRP5 form and will not include the PAYE in the final PAYE reconciliation. Marty advises payroll administrators to read the instructions carefully, take time to fill in the data and follow the instructions carefully before accepting or cancelling data. If in doubt, refer to the business requirements specification document or phone your tax adviser or payroll administrator. All validation requirements can be found in the SARS document.

• Read the Business Requirements Specification document on the SARS website

It is important that the business requirements specification document is carefully read, as it gives employers a detailed outline of what information is required on the payroll before transferring from the payroll onto e@syFile.