Employment Tax Incentive (ETI) refund process

SARS has now finalised the refund process so that compliant employers can obtain a refund for any ETI’s which were not applied/used to reduce the Employee’s Tax payable at the end of each 6-month cycle (1 March to 31 August and then again 1 September to 28/29 February). This only applies to compliant employers – all SARS required returns/reconciliations have been submitted and outstanding debts paid to SARS in full.

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.

Example of how to calculate the ETI Refund

An eligible employer has an excess ETI amount available at the end of the six month reconciliation period and is fully compliant. The employer decided not to use the full ETI amount available to offset against the PAYE liability amount.

ETI

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