How to Use the New VAT Tools in payPod (coming soon)

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Important note

The functionality documented in this page is not yet available, but will be released in the coming weeks. See the this announcement on our blog..

payPod’s new VAT system gives you everything you need to stay compliant with SARS and generate accurate VAT201 reports based on the accrual method.

This guide walks you through how to use the new VAT tools, from setting up tax codes to generating your VAT return.

1. Set Up Your Tax Codes

Every invoice and bill line must now be assigned the correct tax code.

Default tax codes include:

  • 15% VAT on Sales – For standard-rated income
  • 15% VAT on Expenses – For most local purchases
  • Zero-Rated Sales – For local 0% VAT items (e.g. fuel, exports of services)
  • Exported Goods (Zero-Rated) – For goods physically exported
  • Exempt Income – For financial services, residential rent, etc.
  • Exempt Expense – For items like salaries, interest, insurance
  • Imported Services (15%) – For services bought from overseas (e.g. Google Workspace)
  • Second-Hand Goods – When acquiring qualifying second-hand goods
  • Change in Use Adjustment – When repurposing assets from taxable to non-taxable use
  • Bad Debt Adjustment – When writing off a previously invoiced amount

💡 You’ll see these tax codes in a dropdown when editing invoice or bill line items.

2. Create Invoices and Bills Using Tax Codes

When creating or editing invoices and bills:

  • Each line item now requires a tax code.
  • The system automatically calculates VAT based on the tax code’s rate and type.
  • The VAT201 report will categorize amounts into the correct SARS fields (e.g. Field 4, Field 15, Field 12).

❗️You should not mix taxable and exempt items on a single line. Use separate lines for different types of VAT treatment.

3. Review Your VAT201 Report

Go to Accounting > Reports > VAT201 Report to generate your return.

The report includes:

  • All required SARS fields (Field 1 through Field 20)
  • Output VAT (sales VAT and reverse charge on imports)
  • Input VAT (from qualifying expenses)
  • Totals calculated using the accrual method (based on invoice and bill dates)

📌 You can generate the report for any date range, but we recommend using your official SARS VAT periods.

4. Lock VAT Periods (Optional)

Once a VAT period has been filed:

  • You can mark it as filed to lock the data.
  • Invoices and bills in that period will no longer be editable unless unlocked by an admin.

This prevents accidental changes after submission to SARS.

5. Export for Filing

Click Dowload CSV or Download PDF to get a file with fields that match the VAT201 layout.

  • The file includes all field numbers and totals
  • You can use this for eFiling or to send to your accountant

Tips to Stay Compliant

  • Use the correct tax code for each type of transaction
  • Don’t claim VAT on exempt or personal expenses
  • If you import services, always apply the Imported Services code
  • If an invoice goes unpaid and is written off, apply the Bad Debt Adjustment
  • Only use Second-Hand Goods codes if all SARS rules are met