The ETI scheme was implemented from 01 January 2014 and allows qualifying employers to deduct an incentive for each qualifying employee from the total PAYE payable for the month.
A qualifying employer is an employer who is registered for PAYE and is tax compliant with SARS.
An individual will qualify if he or she:
- Has a valid South African ID, Asylum Seeker permit or an ID issued in terms of the Refugee Act
- Is between 18 – 29 years (note that the age limit is not applicable to a Special Economic Zone as gazetted)
- Is not a domestic worker
- Is not a connected person to the employer
- Was employed by the employer or an associate to the employer on or after 01 October 2013
- Is paid the minimum wage applicable to that employer or if a minimum wage doesn’t apply, is paid a wage of at least R2 000 (where the qualifying employee was employed for 160 hours in a month) and not more than R6 000.
The ETI is calculated per employee per month using a SARS formula and can be claimed for a maximum of 24 months for any one employee. It is calculated based on the number of qualifying employees in employment in any month up to a maximum of R1 000 per employee per month.
SARS has finalised the refund process so that compliant employers can obtain a cash refund for any ETI’s not applied/used to reduce the Employee’s Tax payable at the end of each 6-month cycle (1 March to 31 August and 1 September to 28/29 February).
Employers have 6 months to rectify any compliance issues and claim the accumulated ETI for the tax year. However, if an employer is still not compliant by the end of the next 6-month cycle, any ETI refunds due will be forfeited.
DON’T MISS OUT!!!
Contact Juanita Roman or Fatima Bapukee for a fast and professional evaluation of your current ETI status and benefits.
MD Tel: + 27 (0) 21 683 4834
SARS website – click here