Eligible employers will be able to continue claiming the Employment Tax Incentive (ETI) in respect of qualifying employees until 28 February 2029. The ETI came into effect on 1 January 2014 and was initially intended to be available for a limited period only.
The period until when the ETI will be available to employers was extended with a period of ten years to encourage employers to hire young workers through this cost sharing mechanism with government. The ETI allows employers to reduce the amount of Pay-As-You-Earn (PAYE) being paid to SARS. Where the amount of PAYE payable is less than the allowable ETI, the excess will become refundable to compliant employers.
Please note that from 1 March 2019 revised Monthly Remuneration amounts/categories came into effect. These new amounts/categories must be used to determine the amount of ETI claimable in respect of each qualifying employee. The employer needs to calculate the ETI amount for each employee and claim the total incentive and the amount to be utilised to reduce the monthly PAYE by completing the amounts on the Monthly Employer Declaration (EMP201). Excess ETI claims (calculated ETI – PAYE) are processed on a six monthly basis upon the successful submission of the Interim (March to August) and Final (March to February) Employer Reconciliations, provided that the Employer’s Tax Compliance Status is reflected as “Compliant.”
For more information on whether an employer is eligible to claim the ETI in respect of qualifying employees and how to calculate ETI, please visit the SARS website on www.sars.gov.za, or call the SARS Contact Centre on 0800 00 7277.
THE SOUTH AFRICAN REVENUE SERVICE