Merritt became the first Souths player to score five tries as the Rabbitohs chalked up their biggest win over a Parramatta team which is in danger of claiming the wooden spoon for the first time in 39 years.
John Lang's men were also boosted by barnstorming performances from Queensland State of Origin pair David Taylor, back from a five-game suspension, and Greg Inglis, who scored twice, as the Rabbitohs outscored the sorry Eels by 10 tries to one.
Souths are now just four points off a top-eight spot, but must play high-flying North Queensland in addition to visiting Brisbane and Newcastle in three of their last four matches.
However, they will head into Sunday's clash with Canberra full of confidence after following up last week's comeback victory over St George Illawarra with a blistering display.
Inglis opened the scoring after three minutes, brushing aside feeble challenges from Casey McGuire and Luke Burt to breeze his way to the line.
Merritt then ran in two tries in three minutes, before Inglis hauled in a Chris Sandow chip-kick to effectively end the game as a contest in the 28th minute as the Queensland centre and Taylor continued to destroy the Eels' left side.
Merritt completed his hat-trick on the half-hour mark following some terrible defending from the Eels, and matters got worse for Stephen Kearney's side five minutes before the break when Sandow added a sixth try.
Sandow, who will join the Eels next season, gave their long-suffering fans some encouragement for 2012, with a 40-metre burst, sidestepping Burt to score, before kicking his fifth goal of the half to open up a 34-0 interval lead.
Second-bottom Parramatta are now just a single point in front of Gold Coast and their clash with the Titans in round 26 is shaping up as a battle to avoid finishing last.
The start of the second half followed on from the first when Dylan Farrell scored his seventh try in four games, when once again the Rabbitohs were able to throw the ball wide with ease.
The Eels finally troubled the scorers in the 56th minute when Burt dived on a Hayne kick that clipped the crossbar.
However, it proved to be the only positive moment for the visitors, when Merritt raced through for his fourth after another powerful run from Taylor 15 minutes from time.
Chris McQueen rounded off a strong performance with another four-pointer three minutes from time, before Merritt wrote his name in the history books on the siren.
