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Employment Tax Incentive

Employment Tax Incentive (ETI) All you need to know….

The Employment Tax Incentive (ETI) is a tax incentive aimed at encouraging employers to hire young work seekers, the aim of which is two-fold. Firstly, it is a means of cost-sharing between Employers and Government to help motivate employers to employ young people in their work places. South Africa has a particularly high rate of youth unemployment due to the large gap in skills between what the learners are taught in schools and tertiary education arenas and the actual needs required to work effectively within the workplace. As a result employers are hesitant to employ a young person with little or no actual work experience which in term means that young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills can have long-term adverse effects on the economy.

Employment Tax Incentive

Have you experienced Employment Tax Incentive Validation Errors?

Have you experienced ETI Validation Rule Errors?

The Pay-As-You-Earn (PAYE) interim reconciliation closed on 31 October 2016. Some employers may have experienced Employment Tax Incentive (ETI) validation errors when submitting their Employer Reconciliation Declaration (EMP501) to SARS. We have provided guidance further down on how to resolve the recently encountered validation errors.

Employment Tax Incentive

Were your ETI certificates rejected?

A number of employers were previously advised when submitting their Interim Employer Reconciliation Declaration (EMP501) for the reconciliation period 201608 that they had failed ETI validations and were requested to amend and resubmit the reconciliations.

PAYE Employees' Tax

Employment and Learnership Tax Incentives

“Hot off the Press” is a recent Media Statement issued by The Department of National Treasury

MEDIA STATEMENT
2016 Draft Taxation Laws Amendment Bill (Second Batch):
Request for Public Comments on draft bill including Employment and Learnership Tax Incentives

National Treasury and the South African Revenue Service (SARS) today publish a second batch of the
2016 Draft Taxation Laws Amendment Bill (TLAB) for public comment, following the first batch TLAB
published on 8 July 2016.

Employee Tax Incentive

EMPLOYMENT TAX INCENTIVE (ETI)

EMPLOYMENT TAX INCENTIVE (ETI) EXPLAINED

SARS Online SARS AT YOUR SERVICE

Qualifying employers will have to calculate and claim the incentive on a monthly basis. This amount must be completed on the Monthly Employer Declaration (EMP201), which was amended.
Remember you may only claim the EMPLOYMENT TAX INCENTIVE from the month of January 2014 for all qualifying employees employed from 1 October 2013. The amount which may be claimed must not be back-dated to October 2013. The ETI became effective 1 January 2014, and an employer is only eligible to receive the ETI from this date.
THE EXAMPLE BELOW HAS BEEN SET OUT TO EXPLAIN HOW EMPLOYMENT TAX INCENTIVE IS CALCULATED
Monthly RemunerationMin SIC Wage or R2000.00 First 12 months of EE’s employment Second 12 months of EE’s employment