SARS has extended the (Employee Tax Incentive) ETI scheme for another 10 years to 28 February 2029
- Jan
- 31
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
Hi there
If the company employ learners thorough the SETA’S does the company qualify to claim ETI for the learners.
If the ETI value is higher than your monthly PAYE what happens with the difference
The same with TVET graduates we employ on a internship.
Hi
Thank you for your message.
Please refer to SARS website https://www.sars.gov.za/TaxTypes/PAYE/ETI/Pages/default.aspx for queries on ETI as it is explained in more detail.
Should you have any further queries in this regard, you are welcome to arrange for a consultation – please email mdacc@mdacc.co.za for more information.
Regards
Juanita
Does the employee qualify for ETI if he is working for more than 2 years and you have not claimed ETI previously? Or does he only qualify in his first 2 years of emplyment?
Hi
During the period 1/4/2020 – 31/7/2020, the 2 year maximum period requirement is lifted; outside of this special exemption period, the maximum claim period of 2 years would apply as per normal ETI rules as stipulated by SARS.
@MDACC
Hi
In the Special period of COVID, where the two year period is lifted are we applying 13-24 calculations if we have claimed for the 24 months already?
Thanks in advance
Hi
For the period 1/4/2020 – 31/7/2020 SARS is allowing monthly ETI claims during this four-month period for employees from the ages of 18 to 29 who are no longer eligible for the ETI, as the employer has already claimed ETI in respect of those employees for 24 months.