The Employment Tax Incentive [ETI] Act was signed into law and took effect on 1 January 2014 and will end on 28 February 2029.
The incentive, which is aimed at encouraging employers to hire young and less experienced work seekers, sets out to apportion the cost of employment between government and employers by decreasing the amount of PAYE that is payable to SARS for every qualifying employee who is hired by the qualifying employer.
A qualifying employer is eligible to participate in the ETI if the employer–
- Is registered with SARS for PAYE
- Is eligible to register for PAYE
- Is not part of national, provincial or local government
A qualifying employee is someone who, amongst others –
- has a valid South African ID
- Is 18 to 29 years of age
- Is not a domestic employee
- Is not a connected person to the employer (definition of “connected person” provided)
- Was employed by the employer on or after 1 October 2013
- Is paid the minimum wage applicable to that employer or, if a minimum wage doesn’t apply, is paid the amount contemplated in the Minimum Wage Act
- Is paid a monthly salary of less than R6 000
For a comprehensive guide to the SARS Employment Tax Incentive – https://www.sars.gov.za/wp-content/uploads/Ops/Guides/PAYE-GEN-01-G05-Guide-for-Employers-in-respect-of-Employment-Tax-Incentive-External-Guide.pdf
In addition a very useful Q&A is available on the SARS website at – https://www.sars.gov.za/types-of-tax/pay-as-you-earn/employment-tax-incentive-eti/
See table of contents on the right hand side of the page.
