Overview

Keeping you informed about relevant legislation

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Our skilled consultants can help you obtain a SARS compliant payroll software solution, ensuring you stay on the right side of the law and could be eligible for an ETI rebate.

Payroll and PAYE Rebates | Employment Tax Incentive

The Employment Tax Incentive Act was implemented with effect on 1 January 2014 and will be in effect for three years, until 31 December 2016.

The Act allows companies to claim back some tax for employing young workers that adhere to certain requirements. The aim of this is to increase youth employment levels in the private sector.

We understand the impact of the Act on your business and have made the required amendments to the EMP201 return in our SARS compliant payroll software.

What is the Employment Tax Incentive (ETI)?

The Employment Tax Incentive (ETI) encourages employers to hire employees within a specific age range, by allowing companies to claim a PAYE rebate and save. This reduces the cost of employment to the employer, while leaving the employee’s earnings unaffected.

Can my company qualify for a rebate?

Employers who are registered for PAYE and who comply with specific requirements determined by SARS may qualify.

Excluded employers:

  • A Local, Provincial or National Government
  • Public Entity (listed in Schedule 2 or 3 to the Public Finance Management Act) – click here for details.
  • Municipal Entity

Which employees qualify?

An employee will qualify if:

  • The employees are between the ages of 18 and 29
  • The employee has a valid South African ID (13 digits) or an asylum seeker permit
  • The employee should only be employed on or after 1 October 2013
  • The remuneration of the employee is at least the industry prescribed minimum wage or R2 000 per month
  • Employment is in the Special Economic Zone
  • Employment is within a specific industry (based on Standard Industry Codes)
  • The employee is a refugee in possession of an identity document in terms of section 30 of the Refugees Act (Act no. 130 of 1998)
The employee will not qualify if:

  • The employee is related to the employer
  • The employee is a domestic worker

Employers can claim if:

They are registered for PAYE Tax (no voluntary registration allowed) and Income Tax

They are part of a Trade Classification (SIC Codes).

Yes, there are. For non-compliance in terms of wage regulating measures, the claimed sums must be remitted to SARS as a penalty.

Displacement includes:

A R30 000 penalty per displaced employee
Possible disqualification from further tax incentives.